Medicare often pays dramatically different rates for the exact same service depending on where it’s delivered. That difference has helped fuel hospital acquisition of physician practices and reshaped the structure of U.S. health care.

Medical Economics Senior Editor Richard Payerchin sat down with Christopher Whaley, Ph.D., associate professor in the Department of Health Services, Policy and Practice at the Brown University School of Public Health, to learn more.

Whaley breaks down site-neutral payment policy, why Medicare’s 2026 rule takes what he calls a "meaningful step forward" and whether reform could help level the playing field for independent physicians.

Register now for Physicians Practice's Practice Academy event: Practice Management Track, on March 19, 2026, from 1:00 PM-5:00 PM EDT: https://registration.physicianspractice.com

Music Credits:
Empty Spaces by Cephas - stock.adobe.com
A Textbook Example by Skip Peck - stock.adobe.com

Editor's note: Episode timestamps and transcript produced using AI tools.

0:00 — Cold open
Is the genie out of the bottle for independent practice?

0:20 — Intro

1:46 — What the 2026 OPPS and ASC rule gets right
Why CMS is taking incremental but meaningful steps toward site-neutral payment.

2:03 — Why Medicare pays more for the same service in hospital settings
How site-of-care differentials incentivized consolidation.

4:46 — The inpatient-only list explained
How advances in surgical safety changed where procedures can be performed.

6:18 — Is 2026 a breakthrough year for site neutrality?
Whether CMS is signaling broader reform.

7:00 — Too little, too late for independent practice?
Can payment reform meaningfully reverse consolidation trends?

8:41 — Off-campus hospital outpatient departments
How billing classifications affect Medicare spending.

9:43 — Do hospitals deserve higher reimbursement?
Arguments for and against differential payment rates.

11:09 — P2 Management Minute

12:01 — Rural hospitals and payment fairness
Balancing access concerns with cost control.

15:12 — When “rural” isn’t rural
How geographic classifications can distort payment policy.

16:27 — If you could change one thing in U.S. healthcare
Whaley’s view on the most impactful reform lever.

17:03 — Reaction to the administration’s broader health policy agenda
Where site-neutral payment fits into the larger strategy.

18:05 — Why price transparency hasn’t worked as intended
Behavioral economics and the limits of consumer-driven reform.

19:28 — Could transparency help independent practices compete?
Where leveling the payment field intersects with pricing visibility.

20:40 — What happens next with site-neutral payment policy
Political feasibility and stakeholder resistance.

22:04 — Who stands to gain — and who loses — under site neutrality
Hospitals, physicians and Medicare beneficiaries.

23:17 — What primary care physicians should be watching now
Practical implications for referral patterns and reimbursement.

24:20 — Outro

S1 Ep125: Site-neutral payment and independent practice, with Christopher M. Whaley, Ph.D.

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