State legislators roll back Indiana hospital bill that could have cut payments to hospitals

• Indiana lawmakers on March 3 rolled back a proposal that could cut how much insurance companies pay for medical services performed at offices located away from a hospital’s main campus, reported Modern Healthcare.
• The proposal would have forced hospitals to charge for procedures based on where they are performed, meaning the hospital would be paid less for medical services performed at clinics not on its main campus, according to the Modern Healthcare article.
• Health plans in Indiana, led by Anthem, proposed the legislation that would have required any service provided in a provider-based setting be billed on a CMS-1500 instead of a UB-04 and paid based on a physician fee schedule, according to HFMA’s Chad Mulvany.

Modern Healthcare reported, “Indiana lawmakers on [March 3] rolled back a proposal that could cut how much insurance companies pay for medical services performed at offices located away from a hospital’s main campus. The proposal would have forced hospitals to charge for procedures based on where they are performed, meaning the hospital would be paid less for medical services performed at a cancer center or other clinics not on its main campus. The state Senate voted unanimously in a voice vote Monday afternoon to remove those provision[s] as lawmakers faced a deadline next week to adjourn the legislative session. An amendment adopted would require hospitals to report to insurance companies details about the locations were procedures were performed. Sen. Ed Charbonneau, a Valparaiso Republican, said lawmakers were taking the first steps in a long process in addressing health care costs. A Senate committee advanced the hospital billing proposal last week, even as legislators said they were struggling to specify what should be considered a hospital service and some senators said the possible impact on hospitals hadn’t been sufficiently reviewed.”

Takeaway

Health plans in Indiana, led by Anthem, proposed the legislation that would have required any service provided in a provider-based setting be billed on a CMS-1500 instead of a UB-04 and paid based on a physician fee schedule. This would have legislatively expanded an off-campus provider-based clinic site-neutral payment policy that Anthem introduced in many of its markets in 2018 to all health plans in the state.

Given the considerable focus on payment variation between providers and settings, it’s likely that we will continue to see plans attempt legislative strategies to implement site-neutral payments. They will likely find sympathetic allies among employers who are increasingly frustrated with healthcare costs.