Johns Hopkins Researchers Evaluated Medicare Payment Models
A study compared current hospital outpatient pricing strategies against potential site-neutral payment alignments.
Updated on Oct. 14, 2026 in Healthcare
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Johns Hopkins researchers have published a study comparing current Medicare site-neutral payment methods to an alternative model based on the Medicare Physician Fee Schedule. The analysis evaluated 57 procedure groups to determine the financial impact of aligning hospital and physician rates.
Why it matters
Medicare is attempting to lower healthcare costs by reducing payments for services that can be safely performed in doctor offices. The study aims to help reconcile significant rate variations across different service levels.
The study analyzed 57 procedure groups, revealing that aligning hospital payments with physician rates would result in lower payments for 13 of 23 categories. Medicare currently pays hospitals about 40% of standard outpatient prices for covered services.
The players
Johns Hopkins
This private research university is a major institution that conducts extensive studies on healthcare policy and public health metrics.
Centers for Medicare & Medicaid Services
This federal agency administers the Medicare program and is responsible for establishing fee schedules for medical care.
The details
Researchers utilized 2024 Medicare claims data and 2026 payment rates to model how different site-neutral configurations influence federal savings. While the current method generates $6.6 billion in savings, a fully aligned site-neutral policy could generate $6.5 billion.
Timeline
Site-neutrality policies were first implemented in 2015.
Researchers utilized Medicare claims data from 2024.
The model incorporated Medicare payment rates from 2026.
CMS plans to extend reduced rates to imaging services next year.
Market Landscape
This research follows the ongoing industry trajectory of prioritizing cost-efficiency through site-neutrality policies first implemented in 2015. It aligns with broader legislative efforts, such as the Same Care, Lower Cost Act (S. 1629), to standardize payments for identical procedures across care settings.
These potential changes to payment schedules could impact the overall cost of medical procedures for patients enrolled in Medicare. Continued implementation of site-neutrality policies aims to standardize service costs, potentially reducing out-of-pocket expenses for certain outpatient services.
The takeaway
Transitioning to a fully site-neutral payment model remains a complex fiscal challenge due to the variation between hospital and physician rate structures. Patients should stay informed about how changes to federal fee schedules might affect the availability and pricing of outpatient care services.
What happens next
CMS will expand site-neutral payment reductions to include imaging without contrast next year.
Further reading
For more information on payment reform, visit the Healthcare section.
Source note: This article includes information reported by TechTarget.
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