HOPDs treat sicker patients than physician offices: AHA study

A new study commissioned by the American Hospital Association has found patients treated in hospital outpatient departments typically are sicker and require more medically complex treatment than those seen in independent physician offices. 

The study, published in September and conducted by KNG Health Consulting, is based on Medicare data for patients with at least one HOPD or independent physician office visit between 2019 and June 2024. The report includes focused comparisons among cancer patients, who often present with more complex clinical needs.

The study found patients seen in HOPDs were more likely to live in rural or medically underserved communities and more likely to be living with severe chronic conditions. They were also more likely to have at least one complication or major complication tied to chronic illness. 

Among beneficiaries with cancer, those treated in HOPDs were 54% more likely to be 65 or younger and disabled, and 61% more likely to be dually eligible for Medicare and Medicaid. They also more often lived in lower-income areas and were 60% more likely to reside in rural counties.

“Hospitals play a unique and irreplaceable role in caring for patients in all communities but especially in rural and other medically underserved areas,” Rick Pollack, AHA President and CEO, said in a Sept. 3 statement. “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. 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.”

The findings come as efforts to broaden site-neutral payment policies gain momentum in rulemaking and legislative arenas. As part of its proposed 2026 outpatient payment rule, CMS outlined plans to expand site-neutral payments for drug administration services and begin phasing out the inpatient-only list, starting with 285 musculoskeletal procedures in 2026.

The agency is also seeking input on extending site-neutrality to clinic visits and imaging services. Hospitals have long argued such policies fail to account for the higher complexity of patients seen in hospital outpatient settings.

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