Site-neutral payments that base the payment rate on the less costly sector can save money for Medicare, reduce cost sharing for beneficiaries, and reduce the incentive to provide services in the higher paid sector, without compromising beneficiary access to care or health outcomes.

AARP has long advocated for responsible solutions for slowing Medicare spending growth and improving the long-term fiscal health of the program, including delivery system reforms and program integrity efforts. AARP supports equalizing Medicare payments for physician services between hospital outpatient and office settings.

Medicare should adopt site-neutral payment proposals for physician and other ambulatory services performed at the facility level—thereby reducing costs and improving payment efficiency and equity for Medicare-covered services.

A site-neutral payment system would focus on the patient and their needs, regardless of setting, and encourage all settings to provide efficient, high-quality care.

Large price gaps offer an opportunity for purchasers and health plans to reduce spending by steering patients to lower-price, community-based providers through changes in network and benefit design.