People photo created by freepik -

Medicare released a new rule this year to reduce reimbursements for off-campus hospital outpatient clinics. These off-campus clinics will now essentially be paid the same as an independent physician clinic. Individual physicians & patients will benefit from the change, while hospitals balk. These are some of the benefits & costs that will result from this new rule.

The Benefits

There are several benefits to this new rule. CMS estimates that it will save the federal government $380 million this year alone. It’s not just the government that benefits – patients will be happy too. The new rule saves patients an average of $7 for every visit to a hospital-owned clinic.

Another side-effect of this change is that it could cut down on the consolidation trend. Hospitals have been buying independent clinics and making a profit by offering the same services at a higher rate. This is no longer possible under the new rule, which should curb consolidation efforts for now.

The Costs

Hospitals say this rule will hurt patients who live out in rural areas. Many used these facility fees to be able to afford to build clinics in areas that would otherwise not have access to care. Aside from this, the rule will cost hospitals profit. Anytime there is healthcare savings, someone is losing profit, and in this situation, it’s hospitals.

For weekly industry updates & insights, follow our blog.