How Medicare Could Pay the Same for Care Anywhere

Medicare gives extra money when a test or treatment is done in a hospital outpatient department compared to a doctor’s office. That extra money is called a facility fee. Lately, Medicare has trimmed those fees for some services and certain hospital sites. The goal is to make the payment the same no matter where the care happens, to keep spending down and to stop doctors from moving work just to get the higher fee.

Researchers looked at claims from 2024 and the payment rates set for 2026. They tested two ways to make the payment equal. One way cuts the hospital rate to just forty percent of what it is now. The other way uses the doctor’s office fee schedule, which already includes the costs of supplies and support staff. They applied both methods to fifty‑seven groups of services that are sorted into twenty‑three broader categories.

When they added up the savings, the doctor’s office method would cut Medicare spending by about fifty‑nine percent compared to today’s rates, while the forty percent cut would save about sixty percent. Looking at the twenty‑three categories, thirteen showed bigger savings with the doctor’s office method, and ten showed bigger savings with the forty percent cut.

These numbers suggest that both approaches could lower costs a lot. Policy makers can weigh which method fits better with other goals, like keeping patient access simple or encouraging care in the community. The study gives a clear picture of how changing the payment rule might reshape where services are delivered.