Under current law, Medicare pays off-campus outpatient departments a higher rate for drug administration services than it pays physician offices not associated with a hospital. This creates several problems for patients and consumers. Medicare’s cock-eyed reimbursement policy gives hospital-owned providers and facilities an unfair edge over independent competitors. Since Medicare is so large, the higher rate becomes the standard, which increases costs for everyone. It also provides another incentive for hospitals to continue acquiring independent practices, which limits competition and access for patients.
The Lower Costs, More Transparency Act – H.R. 5378 – would force Medicare to pay all providers the same lower rate for drug administration services rather than the higher hospital rate. These rates will be phased in over four years starting in 2025 (2026 for rural facilities). The Congressional Budget Office estimates that these provisions would save about $3.7 billion over the next decade. By equalizing reimbursement payments for drug administration at all outpatient facilities, the Lower Costs, More Transparency Act is a good first step toward making Medicare reimbursements fairer and giving patients more affordable options.