Site-neutral policies sound like a simple idea: Health insurers and government programs would pay the same amount for a service no matter where it is delivered.
The problem is that care isn’t the same everywhere. Children’s hospital outpatient clinics provide highly specialized, resource-intensive care for children whose needs often cannot be met elsewhere.
In other words, sites aren’t neutral.
What are site-neutral policies?
Children's hospitals often serve as regional referral centers for large geographic areas. Unlike adults, children with complex, chronic, or rare conditions frequently have far fewer options for specialized care. Many families already travel hours and cross state lines to reach pediatric specialists.
Children's hospitals bring that expertise closer to home through outpatient departments, which include primary and specialty care clinics, same-day surgery centers, imaging units, and emergency rooms.
These significantly improve access to care for kids who require specialized pediatric care.
As extensions of the children’s hospital, these sites have a different payment structure than independent physician offices and other outpatient care settings. These differences account for the additional overhead, team-centered care, specialized staff, and advanced infrastructure required for children’s hospital outpatient departments to care for unique and complex patient populations.
Site-neutral policies seek to eliminate the differences in pay among outpatient sites, substantially reducing payments for pediatric hospital outpatient clinics.
These reductions would threaten the sustainability of these essential pediatric clinics, which would leave many children with no access to the specialized health care they need.
The fight over fees
When a child is seen in a hospital outpatient department, the hospital receives two fees: a professional fee and a facility fee.
Professional fees pay for the clinician providing care, such as a physician or nurse practitioner who bills directly for services, regardless of whether the clinician saw the patient in a hospital or an outpatient clinic.
Facility fees help cover all the other costs of running the pediatric outpatient department, including the infrastructure, medical equipment, and additional staff like nurses, nursing assistants, behavioral health therapists, social workers, care coordinators, security, and others to support an integrated team-based approach essential to caring for children.
Among other site-neutral policies, Congress is considering various proposals that would reduce or eliminate facility fees for hospital outpatient departments and threaten access to specialized pediatric care.
Why sites aren’t neutral for kids
Children’s hospital outpatient departments are built around the unique needs of children.
Their patients often require multidisciplinary care, individualized medications, specialized medical devices, and equipment designed specifically for children. They rely on specialized pediatric staff, advanced infrastructure, and integrated care coordination not typically available in independent physician offices or ambulatory centers.
A toddler who needs an MRI, for example, may require sedation and support from a child life specialist. A child with asthma needs medication tailored to their age and weight, along with education for parents and caregivers. A baby with cardiac issues needs echocardiography equipment that can view activity in a heart as small as a walnut.
Children’s hospital clinics also provide care for medically complex and vulnerable patients, who require even more resources and coordination.
For example, a single outpatient visit with a pediatric patient with cerebral palsy may involve a rehabilitation physician, physical therapist, nutrition specialist, social worker, care coordinator, and nurses trained in complex pediatric care. The visit may also require wheelchair-accessible exam rooms, specialized lifts and positioning equipment, feeding and nutrition support, imaging services, and coordination with home health providers, schools, therapists, and community programs.
Children’s hospital outpatient departments also provide critical triage support during public health and other emergencies by supporting children who can be cared for effectively in an outpatient site rather than taking scarce inpatient beds.
All of this translates to higher costs for children’s hospital outpatient departments that are not covered by professional fees.
Payment policies that treat all sites the same ignore these realities.
Site-neutral policies will reduce children’s health care access
Site-neutral policies would limit the ability of children’s hospitals to sustain and expand pediatric outpatient services in communities that need them most.
This would lead to:
- Delayed care for children with complex needs: Access to timely care could be delayed or deferred, especially among children with medically complex conditions.
- Reduced access for rural children: Rural communities already face provider shortages and limited access to outpatient care centers. Site-neutral policies could exacerbate these barriers and could place critical pediatric services further out of reach for children who may not live close to a children’s hospital.
- Fewer outpatient specialty services: Site-neutral policies would restrict children’s hospitals’ ability to sustain and expand community-based outpatient sites, putting existing facilities at risk of closure and limiting access to specialty care closer to home.
The bottom line
When developing health care policy, legislators must consider the unique realities of children’s hospitals and the children they care for.
The site of a child’s medical care is not neutral.
Supporters believe site-neutral policies will reduce health care spending, but in reality they will reduce health care access for kids.
