TrustWorks On Call: Site (Neutral) Unseen

Behind the Headlines

Unpacking the forces driving healthcare's biggest stories.

1. Congress to end shutdown without ACA subsidy extension.

On Monday night, eight senators in the Democratic caucus voted for a Republican plan to reopen the government with a continuing resolution that funds all federal agencies through at least January 30, 2026, but does not address the expiring Affordable Care Act (ACA) enhanced subsidies.
As concessions for their support, Senate Democrats were promised a Senate floor vote to extend the ACA subsidies for another year, and federal workers laid off during the shutdown will be rehired.
The House will take the final vote to fund the government as soon as Wednesday, which would end the longest shutdown in US history after 42 days.

TrustWorks Take: The shutdown began with Senate Democrats taking a stand on preserving affordable healthcare, but for the aisle-crossing Senators, the mounting consequences on air travel, nutritional aid, and the federal workforce ultimately proved more pressing. Even if a one-year extension of the ACA subsidies passes in the Senate, the measure would have low prospects for success in the Republican-controlled House.

Meanwhile, Republican Senators have resurrected talks of the ACA being a “broken system” that may need replacing, and President Trump is calling for insurance subsidies instead to be sent “directly to the people” to purchase their own healthcare, neither of which amount to serious or actionable policy proposals. Republicans have also expressed interest in more marginal policy tweaks, like restoring ACA cost-sharing reductions, and expanding the use of health savings accounts and individual coverage health reimbursement arrangements (ICHRAs). By the time Congress is ready to legislate on healthcare coverage again next year, an estimated 4.8M people will have become uninsured, while costs will have soared for millions more.

2. White House strikes GLP-1 deals with Eli Lilly, Novo Nordisk.

Last Thursday, the White House announced that Eli Lilly and Novo Nordisk have committed to selling their GLP-1 treatments to all Americans in direct-to-consumer (D2C) channels for $350 per month, to Medicaid programs for $245 per month, and to qualifying Medicare beneficiaries, via a pilot program, for a $50 monthly copay; these deals do not apply to commercial drug plans.
The drugmakers also agreed that, if their oral GLP-1 medications receive regulatory approval, the lowest doses of these drugs will be sold D2C for $149 per month.
In exchange, Eli Lilly and Novo Nordisk have been granted three years of tariff relief, and Novo’s oral formulation of Wegovy and Lilly’s orforglipron, which could become the first approved GLP-1 pills, received National Priority Vouchers that fast track regulatory review time.

TrustWorks Take: This seems to be the Trump White House’s most impactful healthcare deal to date. For their products already on the market, Lilly and Novo lowered their D2C prices by between $50 and $150 per month, good for cash-price discounts of 15 to 30 percent. Compared to Wegovy's list price of $1350, Medicare paying $245 for the drug amounts to an 82 percent discount. For reference, that’s a larger discount than any obtained by the first round of the Medicare Drug Price Negotiation Program, which ranged from 38 to 79 percent off list price. It’s not clear how the discounts under this deal will interact with the statutory Medicare drug negotiations, which are taking place for Ozempic and Wegovy this year.

More impactful yet will be the introduction of oral GLP-1 medications at affordable prices. As of May 2025, about 12 percent of Americans had ever taken a GLP-1 drug, and another 14 percent were interested but had yet to, because of issues like cost and coverage. Even if it’s just for the starter dose and paid out-of-pocket, $150 per month for a daily supply of pills to achieve weight-loss results in line with weekly injections should prove incredibly popular with consumers and greatly expand the market of regular users. And we won’t have to wait long to see, as Eli Lilly’s orforglipron is expected to receive regulatory approval by the end of this year.

3. Investigation connects C-section overutilization to fetal heartbeat monitoring.

A New York Times investigation into why the US rate of C-sections is so high identified continuous, electronic fetal-heartbeat monitoring during labor and delivery as a key driver of potentially unnecessary C-sections, as using it increases the likelihood of Cesarean delivery by 63 percent.
Despite a large body of evidence attesting that electronic monitoring does a poor job of detecting fetal distress, a combination of factors have preserved the practice as a mainstay in American hospitals: risk-averse and change-resistant clinical standards, health system investments in remote patient monitoring (RPM), patient expectations for their care, liability protections from malpractice suits, and the allure of cutting-edge healthcare technology, including unproven AI software that analyzes fetal heartbeats.

TrustWorks Take: Our healthcare system’s stubborn commitment to electronic fetal monitoring, which stands in contrast to peer nations, is a telling example of how and why our healthcare system so often fails to achieve value. Obstetricians know that electronic monitoring during labor is ineffective, but its costs are abstracted and externalized to payers and patients, who associate closer monitoring with better care despite its hidden risks to their health and life. Payers’ tools to change provider behavior are also imperfect. In the case of labor and delivery, the RPM may not even be separately billed, leaving payers nothing to deny. Meanwhile, UnitedHealthcare just announced a sweeping and controversial policy to deny coverage for most uses of RPM, not just the lowest-value use cases like fetal monitoring.

Given health systems’ growing interest in scaling care by extending their labor supply, the significant investments they’ve made in RPM, the returns they’re seeing from RPM in its other applications, and the rise of AI algorithms meant to detect important patterns in patient data, the incentives for fetal monitoring may continue to outweigh the evidence against it. Unfortunately, “the worst test in medicine” won’t go away without a fight.

Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Preparing for Site Neutrality

Medicare’s embrace of site-neutral payments could significantly reshape how hospital outpatient services are reimbursed, with major implications for provider revenue, care delivery strategy, and regulatory planning. Between Congress considering site-neutral payment reforms that could reduce Medicare hospital reimbursements by upwards of $150B over a decade, and the Centers for Medicare & Medicaid Services (CMS) proposing to equalize payments for drug administration at hospital outpatient departments (HOPDs) and physician offices, it is clear that momentum toward site neutrality is accelerating.

Our Site-Neutral Payment Calculator simulates payment differentials under one version of site-neutral payment reform, in which Medicare payments to HOPDs would equal the lower of Physician Fee Schedule (PFS) Facility rate and PFS Non-Facility rate, applied to the combined professional and technical payment for each. For a simulated HOPD orthopedic practice, the impact of this reform would be devastating, leading to a potential loss of 86 percent of Medicare revenue. Much of this revenue loss comes from CPT 29881 (Knee Arthroscopy), which would see its reimbursement fall from $3,602 to $518, an 85 percent reduction driven by the removal of the technical payment of $3,084.

Of course, instead of this worst-case scenario, CMS could lower the HOPD technical payment to the ambulatory surgery center (ASC) facility rate, which would still incur a significant revenue hit. No matter which version of site-neutral reform takes hold, high-technical surgical services will face the greatest exposure, as site neutrality would align total reimbursement to a much-lower benchmark than HOPD facility costs.

Dialing In

Sharing insights from our work with clients

Three Questions with Michael Levine, MBA
Senior Advisor, Financial and Data Analytics, TrustWorks Collective

1. Why did you build this site-neutral payment calculator?
We were working with a physician group that was planning to expand its hospital-based outpatient footprint and wanted us to model the potential impact of site-neutral payment reform. The CFO viewed site neutrality as a matter of when, not if, and wanted to understand how their projected revenue would change if all outpatient services were reimbursed at office-based rates instead of higher hospital rates. When we looked for a tool to simulate that scenario, we realized there wasn’t one available.

So, I built one. The result is an interactive calculator that allows providers to quantify the financial implications of site-neutral reform across their own procedures and care settings.

2. What assumptions are built into this tool, and how do they shape interpretation?
The challenge in designing any forward-looking model is that CMS has not yet defined a single permanent framework for site-neutral payment reform. The calculator doesn’t predict the future, but it provides a credible, directional view of how payment equalization could affect providers under the policy patterns CMS has used to date.

The core assumption is that CMS will continue to anchor site-neutral reform to the PFS Facility rate, which represents the physician professional payment when a service is performed in a HOPD. Based on recent rulemaking, CMS typically applies a “lower-of” rule. That means capping total reimbursement at the lower of the PFS Facility or Non-Facility rate, rather than averaging rates or raising office payments. Because the PFS Facility rate is usually the lower of the two, it serves here as the standardized benchmark for site-neutral comparison.

It’s also unclear whether any revenue reductions from site-neutral reform would be redistributed to maintain budget neutrality (as CMS could do administratively) or retained as budgetary savings (which would require legislation). In either case, the calculator provides a realistic, evidence-based illustration of what those shifts would mean for specific services in any locality.

3. How can providers use the insights this tool generates?
Using 2025 Medicare rates, the calculator allows providers to input their actual practice data and see the projected financial impact of site neutrality on their organization. It displays, for each code and setting, how payments would change if CMS applied a site-neutral cap, and it aggregates those differences to quantify the overall effect on Medicare revenue.

We intend for this tool to evolve with the policy environment. When 2026 rates are finalized, I’ll be updating the tool to reflect the latest data. I also plan to incorporate ASC facility rates into the model, to allow for comparison across more settings.

Understanding the financial exposure is only the first step. Our goal is to help health systems and physician groups use this information to inform strategic planning—reassessing site-of-service decisions, operational structures, and physician alignment strategies while there’s still time to adapt.

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