MedTech Terms
    The authoritative reference
    All terms
    ReimbursementHospital Buyer & Reimbursement

    Site-Neutral Payment

    Medicare payment policy that pays the same amount for a service regardless of whether it is delivered in a hospital outpatient department, ASC, or physician office.

    Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 9, 2026

    Definition

    Site-neutral payment is the policy principle, partially implemented by Medicare since the Bipartisan Budget Act of 2015 (Section 603), that the same outpatient service should be reimbursed at the same rate regardless of setting. Section 603 made off-campus hospital outpatient departments established after November 2, 2015 paid at the lower Medicare Physician Fee Schedule equivalent rate, not the higher OPPS rate. Multiple subsequent legislative proposals would extend site-neutral payment more broadly.
    What the regulation says
    Statutory: Section 603 of the BBA 2015 (codified at 42 USC 1395l(t)(21)). CMS implements through annual OPPS rulemaking.

    What this means in practice

    Site-neutral expansion is one of the largest swing factors for hospital outpatient economics and for the ASC migration trend; MedTech teams must model both scenarios in their reimbursement analysis.

    Examples

    • A knee arthroscopy performed in a hospital outpatient department would receive the same Medicare reimbursement as one performed in an Ambulatory Surgery Center (ASC) under a fully site-neutral payment system.
    • If site-neutral payments were fully expanded, a cataract removal procedure would be paid identically by Medicare whether it takes place in a physician's office or a hospital's outpatient facility.
    • A diagnostic colonoscopy would be reimbursed at the same Medicare rate across all outpatient settings, preventing financial incentives for hospitals to provide services that could be delivered in lower-cost facilities.
    Common pitfalls
    • •Building a launch case on HOPD rates without modeling site-neutral expansion risk.

    Frequently asked questions

    Section 603, codified at 42 USC 1395l(t)(21), required that off-campus hospital outpatient departments established after November 2, 2015 be paid at rates closer to the Medicare Physician Fee Schedule rather than the generally higher OPPS rate, applying the site-neutral principle to a defined subset of new outpatient locations. It did not eliminate the payment differential between hospital outpatient and physician office settings across the board; it applies specifically to newly established off-campus departments meeting the statute's criteria.

    Related terms

    Grouped by theme
    Cited by

    Where this term appears across MedTech Terms.

    Latest in MedTech

    Sources

    3 sources

    Sources support the definition or relevant regulatory context, not necessarily every claim on this page. Each is graded against our source-tier hierarchy so you can see what rests on binding law versus commentary.

    Official citation replacements checked: . Medicare documents support Medicare coding, coverage or payment context, not every payer policy or CPT editorial procedure. Citation replacement does not change the full term review date.

    Tier 1Binding law and standards· 2Tier 2Regulator guidance and consensus· 1
    Link health: 2 verified 1 unchecked· last checked 2026-06-20
    CMS·1Cornell LII·1eCFR·1
    1. 1
      CMS, Site-Neutral Payments
      Tier 2 Verified
      CMScms.gov
    2. 2
      42 USC 1395l, Payment for outpatient hospital services
      Tier 1 Verified
      Cornell LIIlaw.cornell.edu
    3. 3
      42 CFR 419.48: Excepted items and services; nonexcepted department payment
      Tier 1 Unchecked
      eCFRecfr.gov

    Inline markers like [1] jump to the matching reference above.