In 2016, an analysis by Avalere Health revealed significant disparities in Medicare payments for identical cardiovascular services based on care settings.
The study found that Medicare expenditures for episodes initiated in hospital outpatient departments (HOPDs) were significantly higher than those in physician offices. Specifically, Medicare payments were 70% lower for three-day episodes and approximately 50% lower for more complex 22-day episodes when services were delivered in physician offices. Savings in ambulatory settings ranged from 20% to 63% for common cardiovascular procedures—offering clear cost advantages for both payors and patients.
This payment imbalance has long-term implications for cardiovascular physicians and the healthcare system. Higher reimbursement rates in HOPDs incentivize hospital acquisitions of independent practices, limiting physician autonomy while increasing healthcare costs for patients. Moreover, patients treated in HOPDs often face higher out-of-pocket expenses, impacting their financial burden and influencing their decisions about where to receive care—a concern highlighted by the American College of Cardiology.
For physicians, this trend reinforces the growing challenge of maintaining financial sustainability in independent practice. Unequal payment structures discourage site-neutral care, despite the demonstrated efficiency and cost-effectiveness of physician-led outpatient settings.
As 2025 approaches, the Centers for Medicare & Medicaid Services (CMS) continues to refine reimbursement policies. Under the Calendar Year (CY) 2025 Medicare Physician Fee Schedule (PFS), the PFS conversion factor will be reduced by 2.83% to $32.3465. However, cardiovascular services are expected to see relatively stable reimbursement levels compared to 2024, as policy adjustments help mitigate the broader rate reduction.
Additionally, CMS has extended the hospital market basket update to Ambulatory Surgical Center (ASC) payment rates through CY 2025. ASCs that meet quality reporting requirements will receive a 2.9% payment update, gradually closing the gap between HOPD and outpatient settings.
These policy changes represent incremental progress toward fairer reimbursement structures, but significant disparities remain. For independent cardiologists, staying informed about evolving policies is critical. Advocating for site-neutral payment models that accurately reflect the value of cardiovascular services—regardless of care setting—is key to leveling the playing field.
Shifting toward equitable payment structures would not only reduce financial strain on patients but also support the long-term viability of independent cardiology practices. Ambulatory Surgical Centers (ASCs) and other outpatient care models offer a viable path forward, allowing physicians to deliver high-quality care in cost-effective settings while maintaining control over their practice.
At Atria Health, we believe that physician autonomy is essential to advancing cardiovascular care. Our model is designed to provide independent cardiologists with the resources, expertise, and financial support needed to sustain and grow their practices. By empowering physicians with the tools to navigate an increasingly complex reimbursement landscape, we help ensure that independent cardiology remains a viable and thriving option for patient-centered care.
Explore how Atria Health supports independent cardiologists in building sustainable, physician-led practices.
