What is "site neutrality" in CMS reimbursement?

Site neutrality in CMS reimbursement refers to a strategy that focuses on eliminating additional payments for certain healthcare services based on the provider's location. This concept is particularly relevant in the context of outpatient services, where providers such as hospitals and private practices could be reimbursed at different rates for the same services simply because of where the service was provided. By adopting a site-neutral policy, CMS aims to create a more equitable approach to reimbursement, ensuring that the payment rates do not incentivize providers to make decisions based on reimbursement differences rather than patient care considerations.

This approach seeks to reduce the potential for higher costs associated with services provided in hospital settings compared to those delivered in private practice settings when the services themselves are clinically identical. As a result, site neutrality reflects a movement towards consistency in reimbursement for similar services, irrespective of the location where those services are rendered.