\n\tPhil Galewitz, KFF Health News and Colleen DeGuzman<\/span><\/p>\n

In the battle to control health care costs, hospitals are deploying their political power to protect their bottom lines.<\/p>\n

The point of contention: For decades, Medicare has paid hospitals \u2014 including hospital-owned physician practices that may not be physically located in a hospital building \u2014 about double the rates it pays other doctors and facilities for the same services, such as mammograms, colonoscopies, and blood tests.<\/p>\n

The rationale has been that hospitals have higher fixed costs, such as 24\/7 emergency rooms and uncompensated care for uninsured people.<\/p>\n

Insurers, doctors, and consumer advocates<\/a> have long complained it\u2019s an unequal and unfair arrangement that results in higher costs for patients and taxpayers. It\u2019s also a profit incentive for hospitals to buy up physician practices, which health economists say can lead to hospital consolidation and higher prices.<\/p>\n

In December, the House passed a bill<\/a> that included a provision requiring Medicare to pay the same rates for medical infusions<\/a>, like chemotherapy and many treatments for autoimmune conditions, regardless of whether they\u2019re done in a doctor\u2019s office or clinic owned by a hospital or by a different entity. The policy, known as site-neutral payment, has sparked a ferocious lobbying battle in the Senate, not the first of its kind, with hospitals determined to kill such legislation.<\/p>\n

Don\u2019t bet against them. The House legislation would save Medicare an estimated $3.7 billion<\/a> over a decade, according to the Congressional Budget Office. To put this in perspective, the program is projected to pay hospitals upward of $2 trillion during that same period. But hospitals have long argued that any adoption of site-neutral payments would force them to cut jobs or services, or close facilities altogether \u2014 particularly in rural areas. And senators are listening.<\/p>\n

\u201cThe Senate is very much attuned to rural concerns,\u201d Sen. Ron Wyden (D-Ore.)<\/a>, who chairs the Finance Committee, told KFF Health News. His panel has jurisdiction over Medicare, the health program for seniors and people with disabilities.<\/p>\n

\u201cI have heard lots of questions about how these proposals would affect rural communities and rural facilities,\u201d he said. \u201cSo we\u2019re taking a look at it.\u201d<\/p>\n

Outpatient departments at rural hospitals can have outsize importance to their communities. Taking any funding away from stand-alone rural hospitals is seen as risky. Scores have closed<\/a> in the past decade due to financial problems. With fewer patients, rural hospitals often struggle to attract doctors and update technology amid rising costs.<\/p>\n

Sen. Bill Cassidy (R-La.)<\/a>, a physician who also serves on the Finance Committee, indicated he was apprehensive about the legislation.<\/p>\n

\u201cIn some cases,\u201d he said, higher Medicare payments for hospitals are \u201cjustified.\u201d<\/p>\n

\u201cIn some cases, it doesn\u2019t seem to be,\u201d he said. He told KFF Health News he was planning to introduce legislation on the issue but didn\u2019t provide details, and his office didn\u2019t respond to inquiries.<\/p>\n

As the two senators show, the issue doesn\u2019t break cleanly along partisan lines. In December, the House easily passed the Lower Costs, More Transparency Act<\/a>, the broader bill that included this Medicare payment change, with 166 Republicans and 154 Democrats voting in favor.<\/p>\n

\u201cIt\u2019s more about how close different members are to the hospital industry,\u201d said Matthew Fiedler<\/a>, a former White House health economist under President Barack Obama and now a senior fellow at the Brookings Institution.<\/p>\n