May 4, 2026
Medicare and other payers continue to pay several times more for identical services performed in hospital outpatient departments (HOPDs) than physician offices.
To highlight the degree to which these site-of-service payment differences are associated with higher HOPD use, we use Maryland as a comparison for all other states. Maryland uniquely operates under hospital global budgets, which remove the incentives created by site-of-service payment differentials. This study builds on our recent analysis of hospital utilization in Maryland, treating the state as a counterfactual which highlights the extent to which service mix can safely shift toward lower-cost settings.
Across services MedPAC has suggested for site neutral payment reform, the share provided in HOPDs was 10 percentage points higher nationwide than in Maryland in 2024, a gap that has been growing.
This brief also discusses and estimates the impact of the recent CMS expansion of site neutral payment policy to off-campus drug administration services, and provides estimates of additional expansions that could reduce federal spending by over $200 billion over 10 years.
Read the full research brief here.
Read Arnold Ventures’ summary of our findings here.