Off-campus outpatient billing rules could extend to commercial claims

Hospitals preparing for new off-campus outpatient department (OPD) billing requirements in Medicare may soon face a parallel mandate for commercial claims.

The House Education and Workforce Committee on May 21 unanimously passed the Transparency in Billing Act, which would prohibit commercial health plans from paying claims that do not include a unique identifier for the off-campus OPD that provided the service. Hospitals also could not bill patients without including a unique identifier for the facility.

The core provisions largely mirror new obligations pertaining to Medicare billing, as finalized in the Consolidated Appropriations Act (CAA) of 2026.

“This will ensure this reform to the Medicare program will also extend to individuals covered by private health plans,” Rep. Bobby Scott (D-Va.), ranking member of the Education and Workforce Committee and a cosponsor of the bill, said during a May 21 vote on several healthcare bills.

Whereas hospitals have until 2028 to comply with the Medicare billing requirements, the Education and Workforce bill would take effect with health plan years starting Jan. 1, 2027, a timeline that hospitals might find unrealistic. The administrative burden of obtaining and using a unique NPI for all off-campus OPDs is described as substantial, as is the mandatory attestation process.

Bipartisan support does not mean a clear path to enactment

The bipartisan backing for the Transparency in Billing Act was seen in the 34-0 committee vote. Nonetheless, the same committee voted unanimously to pass a bill by the same name in 2023, and that measure never gained traction in the full House.

Proponents think the new bill has a better chance because concerns about site-based payment differentials are being more widely acknowledged and because hospitals now will have to obtain unique identifiers for off-campus OPDs to bill Medicare regardless.

Preceding last week’s vote, Rep. Virginia Foxx (R-N.C.), a cosponsor of the bill, called the legislation “one of the most important things we have done, and we’re moving closer and closer and closer to true billing.”

As with many healthcare bills, the likeliest vehicles for passage into law are fiscal-year spending packages (e.g., the aforementioned CAA 2026) or a wide-ranging reconciliation bill if Republicans opt to pursue one this summer.

Large employers, not surprisingly, are throwing their weight behind the bill, as seen in comments submitted by the ERISA Industry Committee before the vote. Hospital advocates have not yet reacted to the new bill.

Facility fee scrutiny is driving the push for billing transparency

The 2028 Medicare requirements and the language in the new legislation stem from efforts by policymakers to gain greater transparency into the billing patterns of hospitals that acquire physician practices and convert them to OPDs, which bill at higher rates than freestanding practices.

“While it may be appropriate and necessary for care provided in certain settings to receive higher reimbursement rates based on a variety of factors, this is not true across the board,” Scott said.

The sponsors framed the bill as a form of consumer protection, saying the fees often charged by OPDs are opaque and affect premiums and out-of-pocket costs.

Hospital advocates say the additional fees, commonly known as facility fees, are necessary instruments to fund the cost of running a hospital system.

“Facility fees provide hospitals with the resources necessary to make available the high-acuity services only they can provide on a 24/7 basis, such as emergency and trauma care,” the American Hospital Association (AHA) wrote in a fact sheet. “This includes around-the-clock nursing and physician services, medical equipment, drug therapies and maintaining critical building and community infrastructure.”

The fees also accommodate financial and operational stresses facing hospital OPDs and affiliated physician offices, compared with other outpatient settings, in aspects such as uncompensated care and regulatory mandates, the AHA wrote.

Unique identifiers could set the stage for broader site-neutral payment policy

The requirement for off-campus OPDs to use unique identifiers in Medicare and potentially commercial insurance could be a precursor to expanded site-neutral payment or crackdowns on facility fees as the resulting billing data is assessed.

CMS expanded site neutrality to drug administration services for 2026, leading Medicare payments for those services at off-campus OPDs to drop by roughly 60% to correspond to the physician payment rate. Site-neutral payment also has been in place since 2015 at the relatively few non-grandfathered off-campus OPDs and since 2019 for clinic visits at all off-campus OPDs. A bill drafted in the Senate would extend payment parity to numerous services.

In a policy move with links to site-neutral payment, CMS in 2026 began a three-year phase-out of the Medicare inpatient-only (IPO) list. Elimination of the IPO list renders roughly 1,700 procedure codes eligible to take place in outpatient settings, including on- and off-campus OPDs.

Most of the codes removed from the IPO list to date also are newly covered by Medicare when performed in ambulatory surgical centers (ASCs), allowing for cost comparisons of ambulatory payment classifications as applied in ASCs relative to OPDs.

Among the 285 services removed from the IPO list this year, migration to any outpatient setting is projected to reduce Medicare payment by $1.1 billion for every 20% shift in volume, according to an analysis. If site-neutral payment ever applies to some of those services, the revenue impact on health systems would stand to be bigger.