May 19, 2025
Today, ARC published a new policy brief on site-neutral payment reform. This brief updates beneficiary and federal savings estimates across various site neutrality scenarios and provides an analysis of the legislative framework recently released by Senators Bill Cassidy (R-LA) and Maggie Hassan (D-NH). Key findings include:
- With a comprehensive expansion of site neutrality, Medicare beneficiaries would save $80 billion over ten years through lower Part B premiums and cost sharing.
- Beneficiaries would average savings of $114 per year. Millions of high-utilizing beneficiaries, such as those receiving chemotherapy, would save several hundred dollars annually.
- Comprehensive site neutrality would reduce federal spending by $148 billion over ten years. Additionally, tax revenue spillover effects from lower employer-sponsored insurance costs would increase federal revenue by $30 billion. A narrower policy focused solely on off-campus HOPDs would reduce spending by $28 billion over the same period.
- The Cassidy-Hassan framework proposes expansion of site neutrality while reinvesting in rural and high-needs hospitals. We estimate 29% of facilities (14% of beds) may qualify for reinvestment. For these hospitals, reinvestment can fully offset revenue losses from site neutrality, though results are sensitive to specific details in how the framework is ultimately implemented.
This work was supported by Arnold Ventures. You can read Arnold Ventures’ news story about the analysis here, and access the full policy brief here. A supplemental table with state-level impacts is available here.