What is one potential consequence of the site of service differential?

The site of service differential refers to the variations in reimbursement rates for services provided in different settings, such as hospitals versus outpatient facilities. When there is a significant disparity in payment levels, it may discourage healthcare providers from offering services in lower-cost outpatient settings due to the lower reimbursement rates. This can lead to a concentration of services in higher-cost facilities, such as hospitals, where reimbursement rates are more favorable.

As a result, the disincentive for providers to offer services in outpatient settings can negatively impact the availability of care in those settings. This may also lead to higher overall healthcare costs, as services shift away from more cost-effective outpatient options to more expensive hospital settings, ultimately affecting patient access and the efficiency of care delivery.