Medicare reform has long been the “third rail” of American politics—but the math is getting harder to ignore. Without action, Medicare will consume 5.3% of GDP by 2053 and require over $2 trillion in new federal revenue over the next decade.
In RealClear Markets, Market Institute Senior Fellow Norm Singleton highlights a commonsense reform that deserves serious attention: site neutral billing. And one senator—Senator John Kennedy of Louisiana—is leading the charge with his Same Care, Lower Cost Act.
“Reforming Medicare resembles the old cliché about the weather: everyone (at least in DC) talks about it—but no one does anything about it.”
Medicare currently pays more for procedures done in hospitals than for the same procedures performed in doctors’ offices. This irrational policy creates perverse incentives that raise costs, hurt patients, and drive independent physicians out of private practice.
“Hard as it to believe, Medicare pays more for certain procedures if they are done at a hospital rather than in a doctor’s office!”
Kennedy’s bill would extend site neutral billing to 66 commonly used Medicare billing codes and empower the Secretary of Health and Human Services to expand it further. According to the Congressional Budget Office, this simple reform could save taxpayers $157 billion over ten years. Medicare patients could save between $94 billion and $134 billion in premiums and cost-sharing.
“Site neutral billing also removes the profit incentive for hospitals to acquire private practices… one of the leading threats to the private practice of medicine.”
Predictably, hospital lobbyists are opposing the bill—claiming it will lead to long wait times. But Singleton points out that this is disinformation. Site neutral billing does not affect procedures that must be performed in hospitals and will actually make care more affordable and accessible.
“Site neutral payments will make it easier for patients and providers to determine where the best place is for the patient to receive care without being pressured by profit-hungry administrators.”
Singleton concludes:
“Congress should take the first step toward putting Medicare on a sustainable path… by sending the Same Care, Lower Cost Act to President Trump’s desk by Labor Day.”
