Estimated Impact Analysis of Site-neutral Provisions in the Lower Costs, More Transparency Act (H.R. 5378)

The Lower Costs, More Transparency Act (H.R. 5378): Starting in 2025, and phased in over four years, drug administration services furnished in off-campus provider-based departments would be paid at a site-neutral rate.

Notes:

1. H.R. 5378 calls for off-campus grandfathered drug administration services to be cut starting in 2025. It defines them as those that are assigned to designated ambulatory payment classification (APC) groups. While it does not explicitly list the APCs, an AHA coding expert identified four drug administration APCs: 5691-5694. Hence, we used these APCs in our modeling.
    
2.  We estimated the site‐neutral payment rate to be 40 percent of the OPPS payment rate i.e., a reduction of 60 percent.
    
3. Since H.R. 5378 calls for a 4-year transition period, we assumed that cuts would result in 25% of the full impact in 2025, 50% in 2026, 75% in 2027 and 100% (full implementation) in 2028 and beyond. It is possible that CMS could adopt a different schedule for the transition period. The impacts shown above do not include a one year delay in implementation for certain rural and cancer hospitals.
    
4. Wyoming and Puerto Rico did not report any lines for off-campus grandfathered drug administration services in the claims data and are not shown in the table. States with very low impacts are shown in the table but have very few reported off-campus grandfathered drug administration services.
    
5. We modeled OPPS payments using CY 2021 data files and CY 2023 final rule policies. Payments were inflated to 2025 and through 2034 using CBO’s projections of payments for hospital outpatient services contained in their May 2022 Medicare baseline.