Study: Hospital Outpatient Care Often More Complex

September 10, 2025

Patients on Medicare who are treated at hospital outpatient departments (HOPD) are likely to be more complicated to treat than those seen at independent physician offices (IPO), according to a new study by the American Hospital Association (AHA).

Researchers determined that Medicare patients who receive care at HOPDs are often from geographically isolated and medically underserved communities. They tend to be sicker and have more complex treatment plans than Medicare patients treated in IPOs.

“Hospitals play a unique and irreplaceable role in caring for patients in all communities but especially in rural and other medically underserved areas,” said AHA President and CEO Rick Pollack. 

Here are few key takeaways:

Our most vulnerable:  Specifically, the analysis from KNG Health Consulting LLC found that Medicare patients—including Medicare patients with cancer—who are seen in HOPDs are more likely to be:

• From rural and lower-income areas.
• Living with more severe chronic conditions.
• Dually-eligible for both Medicare and Medicaid.
• Previously hospitalized or cared for in a hospital emergency department.
• Under 65 and eligible for Medicare based on disability.

Why “site-neutral” doesn’t work:  The conclusions from the study reinforce prior findings on this topic and emphasize why reimbursing hospitals and health systems the same as IPOs would put patient care at risk. “Site-neutral payments” proposed by policymakers ignore differences in the types of services hospitals provide—as well as the types of patients and communities hospitals serve—compared to other providers, according to the report.

Always at the ready: Unlike other providers, hospitals maintain standby capacity for natural and man-made disasters, public health emergencies, other unexpected traumatic events, and the delivery of around-the-clock complex and emergency care to all who come through their doors, regardless of ability to pay or insurance status. They also must comply with higher regulatory requirements and safety standards than IPOs.

Misguided math:  Medicare reimbursement continues to lag behind inflation—covering just 83 cents for every dollar spent by hospitals in 2023, resulting in over $100 billion in underpayments, according to an AHA analysis.

Quotable:  “Current Medicare payment rates appropriately recognize the fundamental differences between patient care delivered in hospital outpatient departments compared to other settings, including around-the-clock services and emergency care,” said Pollack. “However, efforts to expand site-neutral payment cuts disregard the realities of our health care system and will result in limiting or eliminating critical hospital-based care. The result will be increased wait times and reduced access to care for all patients.”

Read the report online.