What Medicare’s Move Toward Site-Neutral Payments Means for Employers, Health Plans and Their Members

A National Integrative Health Sponsored Issue Brief

EXECUTIVE SUMMARY

In his July 14, 2026, Drug Channels article, “Medicare Embraces Site-Neutral Payments. Why Haven’t Employers?” Bryce Platt, PharmD, examines Medicare’s expanding use of site-neutral reimbursement and the much larger opportunity available to commercial and employer-sponsored health plans.¹

Platt highlights a problem that National Integrative Health encounters every day: the location where healthcare is delivered can dramatically affect its price—even when the medication, clinical procedure and expected outcome are essentially the same.

Beginning January 1, 2026, the Centers for Medicare & Medicaid Services expanded its site-neutral payment policy to certain drug-administration services performed in previously excepted off-campus hospital provider-based departments. These services are generally reimbursed at an amount comparable to the Medicare Physician Fee Schedule rather than the higher Hospital Outpatient Prospective Payment System rate.²

CMS estimated that the policy would reduce 2026 outpatient spending by approximately $290 million, including an estimated $220 million in Medicare program savings and **$70 million in beneficiary savings through reduced cost sharing.**¹ ²

The scope of this Medicare policy is limited, but its underlying message is significant:

Healthcare reimbursement should reflect the clinical service and resources required—not simply the ownership or address of the facility.

For employers and commercial health plans, the potential opportunity may be substantially larger. A 2024 analysis estimated that commercial and employer-sponsored plans could have saved approximately $58.2 billion in 2022 through broad site-neutral reimbursement. The analysis projected approximately $847 billion in employer-market savings from 2024 through 2033, along with estimated commercial premium reductions of roughly 5% annually over the decade.³

For employers facing rapidly increasing specialty pharmacy and infusion expenses, site-of-care management is becoming an essential component of responsible health-plan stewardship.

THE PROBLEM: IDENTICAL CARE, DRAMATICALLY DIFFERENT PRICES

Consider an employee who needs an infused, injected or physician-administered specialty medication.

The same medication may be administered in:

• A hospital outpatient department
• A physician’s office
• An independent infusion center
• A specialty clinic
• The patient’s home

The medication does not become clinically superior simply because it is administered in a hospital-owned facility. However, the hospital outpatient setting can generate a substantially higher total claim because of facility charges, administration fees, reimbursement differences and hospital ownership structures.

An Oliver Wyman analysis commissioned by AHIP compared specialty medications supplied through specialty pharmacies with the same medications purchased and billed by healthcare providers.

For the specialty medications examined, hospital-facility prices were approximately 50% to 103% higher than specialty-pharmacy prices. Prices billed through professional offices were approximately 2% to 33% higher than specialty-pharmacy prices.⁴

Across all specialty drugs included in the Oliver Wyman analysis, provider buy and bill arrangements produced a weighted-average markup of approximately 42%. The analysis estimated that these markups could add as much as **$13.1 billion to health insurance premiums and premium equivalents in 2024.**⁴

Commercial claims data highlighted by Drug Channels reached a similar conclusion. Infusions delivered in hospital outpatient departments resulted in approximately 42% higher plan costs than infusions delivered through alternative sites of care. The study did not identify measurable improvements in safety or clinical outcomes associated with the higher-cost hospital setting. Average patient out-of-pocket costs were also approximately 21% higher for hospital outpatient infusions.¹ ⁵

In many cases, the employer and employee are paying more for the location and billing arrangement—not for a different medication or a demonstrably better clinical outcome.

HOW BUY AND BILL CAN DRIVE UP THE COST OF SPECIALTY MEDICATIONS

Many infused, injected and physician-administered specialty medications are purchased through a reimbursement model known as buy and bill.

Under this model, a hospital, infusion facility or physician practice:

1. Purchases the medication from a distributor or other supplier.
2. Stores and handles the medication.
3. Administers the treatment to the patient.
4. Submits a medical claim to the health plan for the medication and related services.
5. Receives reimbursement based on its contracted billing arrangement—not necessarily the amount it originally paid for the medication.

This structure gives the provider control over both the acquisition of the drug and the amount billed to the health plan.

Buy and bill is not automatically inappropriate. Providers assume legitimate responsibilities and expenses related to ordering, storing, preparing, handling and administering complex medications.

However, when the provider’s reimbursement is substantially higher than its acquisition cost, buy and bill can create a financial spread that increases costs for the employer and the member.

A Simple Example

Assume a provider purchases an infused specialty medication for $10,000.

Under a buy and bill arrangement, the provider’s claim could include:

• $15,000 for the medication
• $2,500 for infusion or administration
• $3,000 in hospital facility charges
• Additional charges for monitoring, supplies or professional services

The total claim could exceed $20,000, even though the medication was acquired for $10,000.

This is a simplified example intended to explain the mechanics of buy and bill. Actual pricing, contractual terms and claim components vary substantially.

The difference between the provider’s medication-acquisition cost and the amount reimbursed by the health plan is commonly described as a markup or spread.

That markup can become significantly larger when the treatment is delivered through a hospital outpatient department.

Why Hospital Ownership Can Change the Claim

A physician practice or infusion location may become part of a hospital system and begin billing services through a hospital outpatient department.

The physician may still be providing the same treatment. The member may be receiving the same medication, dosage and clinical oversight.

However, the claim may now include:

• A higher reimbursement rate for the medication
• A hospital outpatient facility fee
• Higher administration charges
• Additional hospital-based service charges
• Separate professional and facility components

In other words, the clinical treatment may not have changed—but the ownership and billing structure have.

This can cause the total cost of care to increase substantially.

The Plan May Not See the Provider’s Actual Acquisition Cost

Buy and bill can make it difficult for an employer to determine the provider’s true medication-acquisition cost.

The employer generally sees the amount billed and paid through the medical claim. It may not have visibility into:

• The provider’s original purchase price
• Distributor discounts
• Group purchasing discounts
• Prompt-payment discounts
• Manufacturer incentives
• Other purchasing arrangements
• The provider’s actual net cost after available concessions

As a result, the health plan may reimburse the provider considerably more than the provider’s net acquisition cost.

The plan sponsor may see the paid claim but not the economics beneath it.

The Same Medication Can Have Several Different Prices

The price of an infused medication can vary depending on how it is sourced and where it is administered.

The same medication may be:

• Purchased and billed by a hospital
• Purchased and billed by a physician practice
• Supplied by a specialty pharmacy
• Purchased through an alternative network
• Obtained through a manufacturer-direct arrangement
• Replaced with an appropriate biosimilar or therapeutic alternative
• Administered through an independent infusion center
• Delivered through home infusion when clinically appropriate

Each pathway can produce a different total cost for the employer and member.

A plan cannot determine whether it is paying an appropriate price by reviewing the medication name alone. It must evaluate:

• Who acquired the medication
• How the medication was sourced
• What amount was billed
• Where the treatment was delivered
• What facility and administration charges were added
• Whether lower-cost clinical and sourcing options were available
• What the member was required to pay

Buy and Bill Also Affects Employees

Higher medication, facility and administration charges do not affect only the employer.

When a member is responsible for a deductible or percentage-based coinsurance, a higher total claim can increase the member’s out-of-pocket expense.

For example, a member with 20% coinsurance could owe:

• $2,000 on a $10,000 allowed claim
• $4,000 on a $20,000 allowed claim

The medication and treatment may be the same. The member’s financial responsibility can increase because the claim was billed through a more expensive sourcing and site-of-care arrangement.

Actual member responsibility will depend on plan design, deductibles, coinsurance, out-of-pocket limits and other benefit provisions.

Why a Large Network Discount May Not Mean a Low Price

A health plan may be told that it received a significant network discount on a hospital claim.

However, a large percentage discount does not necessarily mean that the final price is competitive.

For example:

• Hospital billed charge: $30,000
• Network discount: 30%
• Allowed plan price: $21,000
• Clinically appropriate alternative total cost: $12,000

The plan technically received a $9,000 discount from the billed charge, but it still paid $9,000 more than the available alternative.

A percentage discount measured against an inflated billed charge can create the appearance of savings without producing the lowest appropriate net cost.

The more important question is not:

How large was the discount from the original billed charge?

The more important question is:

What was the lowest clinically appropriate net cost available for the complete treatment?

Why Buy and Bill Requires Active Management

Without active oversight, buy and bill can create opportunities for:

• Excessive medication markups
• High hospital facility charges
• Inflated administration costs
• Wide price variation among providers
• Limited visibility into the provider’s true acquisition cost
• Increased member cost sharing
• Recurring overpayment for ongoing therapies

A responsible cost-containment strategy should compare the existing buy and bill claim with alternative medication-sourcing and treatment pathways before the next dose is administered.

That review may include:

• The provider’s current billed and allowed amounts
• Specialty-pharmacy pricing
• Independent infusion-center pricing
• Physician-office administration
• Home infusion when clinically appropriate
• Manufacturer-direct contracting
• Biosimilar availability
• Therapeutic alternatives
• Patient-assistance opportunities
• Total member out-of-pocket responsibility
• Clinical and logistical requirements

The National Integrative Health Approach to Buy and Bill

National Integrative Health evaluates both sides of the claim:

1. How much does the medication cost?
2. How much does the location charge to administer it?

NIH does not assume that moving treatment to another facility automatically produces the best financial or clinical outcome.

A lower-cost infusion location may still acquire the medication inefficiently. Likewise, a competitively priced medication can become unnecessarily expensive when it is administered in a hospital outpatient department with significant facility and administration charges.

NIH evaluates the medication, sourcing pathway, provider, administration setting and member’s clinical needs together.

This allows NIH to identify cases in which:

• The medication is excessively marked up
• The site of care is unnecessarily expensive
• Both the medication and the location are driving up the claim
• A lower-cost, clinically appropriate pathway is available
• The member may benefit from reduced out-of-pocket expenses
• Recurring treatments create an opportunity for continuing savings

The goal is not simply to negotiate a discount from an inflated bill.

The goal is to remove avoidable costs from the entire treatment process while preserving clinical appropriateness, physician involvement and continuity of care.

THE EMPLOYER AND MEMBER IMPACT

Site-of-care and buy and bill variation create three interconnected challenges.

Higher Plan Spending

Unnecessarily expensive medication-sourcing arrangements and sites of care increase the cost of high-cost pharmacy and medical claims.

These expenses place additional pressure on:

• Employer healthcare budgets
• Stop-loss coverage
• Renewal rates
• Future premiums
• Employee contributions
• Plan sustainability

For recurring specialty infusions, an inefficient claim may repeat every few weeks or months. A cost difference that appears manageable on a single claim can become significant over the course of a year.

Higher Employee Responsibility

When employees are responsible for deductibles or coinsurance, inflated medication, facility and administration charges can translate directly into higher out-of-pocket expenses.

A more expensive claim does not affect only the employer. It can create a meaningful financial burden for the employee or family receiving treatment.

Misaligned Financial Incentives

Large payment differences among healthcare settings may encourage services to migrate toward higher-paying hospital outpatient departments.

When a hospital outpatient department receives substantially more than a physician office or independent infusion center for the same service, the reimbursement system may reward the use of the more expensive setting—even when a lower-cost location would be clinically appropriate.

CMS expanded its 2026 policy after observing unnecessary growth in the volume of certain services delivered through excepted off-campus hospital departments.²

MEDICARE IS BEGINNING TO ADDRESS THE IMBALANCE

Site-neutral payment is based on a straightforward principle: when a service can be delivered safely and appropriately in multiple settings, reimbursement should be based primarily on the resources required to provide the service—not simply on whether the location is owned by a hospital.

Medicare began applying site-neutral payment rules to certain services delivered in newly established off-campus hospital outpatient departments in 2017.

CMS later expanded the policy to clinic visits performed in previously excepted off-campus provider-based departments. For 2026, CMS expanded the policy again to include qualifying drug-administration services.² ⁶

Under the 2026 policy, applicable drug-administration services performed in previously excepted off-campus hospital provider-based departments are generally paid at an amount comparable to the Medicare Physician Fee Schedule rate.

CMS stated that the policy is intended to prevent Medicare and its beneficiaries from paying significantly more for certain services solely because they are delivered in an off-campus hospital department rather than a physician-office setting.²

CMS has also expanded the number of procedures that may be performed in ambulatory surgical centers and other outpatient settings when clinically appropriate. These changes are intended to give physicians and patients greater flexibility in selecting an appropriate site of service while maintaining patient-safety requirements.²

MEDICARE’S EXPANSION IN PERSPECTIVE

The 2026 policy does not establish complete site neutrality throughout the Medicare program.

It applies to selected drug-administration services delivered in certain off-campus hospital departments. The medications themselves and other associated services may remain subject to separate reimbursement methodologies.

The Congressional Budget Office has estimated that broader application of site-neutral payment rates to many services delivered through both off-campus and on-campus hospital outpatient departments could reduce federal payments by approximately $156.9 billion from 2025 through 2034. Drug-administration services account for an estimated $5.6 billion of those projected savings.¹ ⁷

These are Medicare estimates, but commercial payment differences may be even larger.

Medicare generally uses established fee schedules and regulated payment methodologies. Commercial reimbursement is negotiated among health plans, hospital systems, providers and other contracting organizations.

As a result, commercial prices for hospital outpatient services may be considerably higher than Medicare rates.

Employer-sponsored plans therefore have a strong financial incentive to examine:

• Where provider-administered medications are delivered
• How those medications are acquired
• What markups are included
• Whether facility fees are being added
• Whether a clinically appropriate lower-cost pathway exists

WHY THIS MATTERS TO EMPLOYER-SPONSORED HEALTH PLANS

Medicare’s action should serve as an important signal to employers, brokers, consultants, third-party administrators and commercial health plans.

Commercial plans frequently pay hospital outpatient departments substantially more than physician offices, independent facilities or specialty pharmacies for comparable services and medications.¹ ⁴ ⁵

However, many commercial plan sponsors have not implemented comprehensive site-of-care programs.

The Pharmaceutical Strategies Group’s 2026 Trends in Specialty Drug Benefits Report found that only approximately 35% of commercial plan sponsors had a site-of-care program in place for specialty pharmacy.¹ ⁸

The report data also indicated that, for 2025, more than half of surveyed health plans but only approximately one-quarter of surveyed employers had site-of-care strategies for provider-administered specialty medications.¹ ⁸

Common site-of-care strategies may include:

• Prior authorization for high-cost or nonpreferred facilities
• Clinical policies directing qualifying services to preferred locations
• Reduced member cost sharing at preferred sites
• Mandatory use of designated locations for qualifying therapies
• Specialty-pharmacy sourcing
• White-bagging programs
• Independent infusion-center arrangements
• Home-infusion programs when clinically appropriate
• Case management and provider coordination

The effectiveness of these strategies varies significantly depending on how they are designed and implemented.

A voluntary program that simply informs a member that a lower-cost facility exists may not be sufficient to produce a change. Members often have established relationships with their existing physicians and hospital systems.

Without personalized assistance, a financial incentive or a clearly coordinated transition, there may be little reason for the member to change treatment locations.

THE DIFFERENCE BETWEEN IDENTIFYING AND REALIZING SAVINGS

A successful site-of-care and cost-containment strategy cannot consist solely of identifying a less expensive location.

It must also ensure that:

• The alternative location can safely administer the therapy
• The medication can be acquired at a competitive net cost
• The treating physician remains involved
• Prior authorization and clinical requirements are satisfied
• The new provider has the necessary staffing and clinical capabilities
• The member receives clear, personalized support
• Treatment is not delayed or interrupted
• Savings are measured against actual claim outcomes
• The employer receives transparent reporting

Without these capabilities, an opportunity identified through claims analysis may never become realized plan savings.

There is a meaningful difference among:

• Identifying a potential opportunity
• Projecting possible savings
• Implementing an intervention
• Completing a successful transition
• Realizing savings on an adjudicated claim
• Sustaining savings across future treatments

Employers and their advisors should understand which of these outcomes their current vendors are actually measuring.

THE NATIONAL INTEGRATIVE HEALTH PERSPECTIVE

National Integrative Health believes employers should not pay an avoidable medication markup or hospital premium when clinically appropriate and more economical alternatives are available.

NIH evaluates the complete economics of a high-cost pharmacy or infusion claim, including:

• Medication acquisition cost
• Buy and bill reimbursement
• Administration expense
• Facility charges
• Site-of-care reimbursement
• Provider contracting
• Available biosimilars
• Therapeutic alternatives
• Manufacturer-direct opportunities
• Patient-assistance programs
• Network options
• Member financial responsibility
• Clinical appropriateness
• Continuity of care

This distinction is critical.

Moving an infusion away from a hospital does not automatically guarantee that the plan has achieved the lowest possible net cost.

An effective intervention should evaluate both the cost of the medication and the cost of administering it.

The new facility may have a lower administration charge but a higher medication-acquisition cost. A lower medication price may be offset by excessive facility or professional charges. A seemingly less expensive site may also lack the clinical capabilities required for a particular patient or therapy.

The entire clinical and financial event must be evaluated.

NIH’s model combines:

• High-cost pharmacy management
• Infusion-network access
• Clinical review
• Claims analytics
• Buy and bill analysis
• Alternative medication sourcing
• Case management
• Site-of-care optimization
• Transparent savings measurement

NIH works alongside existing plan partners—including PBMs, TPAs, brokers, consultants, stop-loss partners and care-management teams—to address the relatively small number of high-cost claims that can have a disproportionate effect on overall pharmacy and medical spending.

A PRACTICAL SITE-OF-CARE INTERVENTION MODEL

1. Identify the Opportunity

Medical and pharmacy claims are reviewed to identify infused, injected and physician-administered medications being delivered through higher-cost settings or reimbursed through costly buy and bill arrangements.

The analysis should examine the complete claim rather than focusing only on the medication price.

Relevant expenses may include:

• The medication
• Medication markup
• Facility charges
• Administration
• Clinical monitoring
• Professional services
• Laboratory services
• Member cost sharing

The review may also identify recurring therapies for which the financial impact will continue to grow if no intervention occurs.

2. Validate Clinical Appropriateness

Clinical professionals review the member’s diagnosis, treatment, dosage, administration requirements and individual circumstances.

Not every patient or treatment should be redirected.

Some members may require the clinical resources, emergency capabilities or specialized monitoring available in a hospital. Patient safety and clinical appropriateness must remain the primary considerations.

3. Evaluate Medication Acquisition

The medication’s acquisition and reimbursement costs should be reviewed independently from the administration location.

The analysis may consider:

• Current buy and bill pricing
• Specialty-pharmacy sourcing
• Manufacturer-direct arrangements
• Biosimilars
• Therapeutically equivalent options
• Patient-assistance opportunities
• Alternative network arrangements
• Available clinical programs

The objective is to determine the lowest appropriate net cost—not simply the lowest visible charge or the largest percentage discount.

4. Compare Available Settings

Potential alternatives may include:

• An independent infusion center
• A physician’s office
• A specialty clinic
• A home-infusion provider
• Another appropriately equipped outpatient setting

The comparison should evaluate:

• Clinical capabilities
• Geographic accessibility
• Network status
• Scheduling
• Member convenience
• Staffing
• Emergency protocols
• Medication handling
• Medication-acquisition cost
• Facility and administration charges
• Total net cost

5. Coordinate With the Treating Provider

The prescribing physician remains an essential participant in the process.

Any transition should preserve the physician’s treatment plan while identifying a more efficient and clinically appropriate delivery pathway.

Provider communication is particularly important when a new order, authorization or medication-sourcing process is required.

6. Support the Member

Members should not be expected to coordinate the transition alone.

Dedicated case management can help:

• Explain the proposed change
• Answer questions
• Locate an appropriate provider
• Coordinate appointments
• Communicate with the physician
• Address authorization requirements
• Confirm medication availability
• Prevent treatment disruption
• Provide continuing support

The quality of the member experience may determine whether a site-of-care strategy succeeds.

7. Measure Realized Savings

Savings should be calculated using actual claim outcomes whenever possible.

Transparent reporting allows the employer and its advisor to distinguish among:

• Identified opportunity
• Projected savings
• Implemented intervention
• Realized claim savings
• Member savings
• Ongoing recurring savings

A site-of-care program should demonstrate what changed, why it changed and what the plan and member actually saved.

WHAT SITE-OF-CARE OPTIMIZATION LOOKS LIKE IN PRACTICE

The following scenario reflects the types of cases National Integrative Health manages every day.

Consider a member receiving a recurring specialty infusion at a hospital outpatient department.

The total claim may include:

• A marked-up specialty medication
• A hospital facility charge
• Drug-administration fees
• Clinical monitoring expenses
• Hospital outpatient reimbursement
• Member coinsurance or deductible responsibility

Through claims analysis, NIH identifies that both the medication-acquisition pathway and the treatment location are contributing to the high cost.

NIH then identifies an independent infusion facility, physician-office setting or other clinically appropriate location capable of providing the prescribed treatment at a substantially lower total cost.

NIH’s clinical team reviews the member’s diagnosis, medication, dosage, administration requirements and individual circumstances. The treating physician remains involved, and NIH coordinates the necessary authorization, medication access and scheduling.

The member receives direct case-management support throughout the transition to help ensure that treatment is not delayed or interrupted.

The medication, dosage, treatment schedule and prescribing physician may remain unchanged, while the medication-acquisition, facility and administration components of the claim are significantly reduced.

These cases can result in:

• Lower total plan spending
• Reduced medication markups
• Reduced facility and administration expenses
• Reduced member out-of-pocket costs
• Preservation of the physician-directed treatment plan
• A more convenient care experience
• Continued clinical oversight
• Transparent documentation of realized savings
• Recurring savings on future treatments

These are not theoretical scenarios. They reflect the types of high-cost pharmacy and infusion cases NIH identifies, manages and resolves every day for self-funded employers and their members.

NIH evaluates the entire clinical and financial event—not simply the treatment location—to ensure that the member receives appropriate care while the employer avoids unnecessary costs.

SITE NEUTRALITY IS NOT ABOUT ELIMINATING HOSPITALS

Hospitals play a critical role in the healthcare system.

Certain patients, medications and clinical circumstances require the staffing, infrastructure, emergency capabilities and monitoring available in a hospital setting.

A responsible site-of-care strategy does not assume that every service belongs in the least expensive facility.

Instead, it asks:

What is the safest, most clinically appropriate and most economically responsible setting for this patient and treatment?

Site-of-care optimization must be selective and clinically guided.

The objective is not indiscriminate redirection. It is informed decision-making supported by clinical review, physician participation, member assistance and transparent financial analysis.

QUESTIONS EVERY EMPLOYER AND ADVISOR SHOULD ASK

1. Can we identify which infusions and physician-administered medications are being delivered through hospital outpatient departments?
2. Do we know the complete cost of the medication, administration and facility components?
3. Do we know whether the medication is being reimbursed through buy and bill?
4. Can we see the difference between the medication’s acquisition cost and the amount paid by the plan?
5. Are we comparing hospital outpatient pricing with independent infusion, physician-office and home-infusion alternatives?
6. Does our current program actively coordinate appropriate transitions, or does it merely identify potential savings?
7. Who communicates with the treating physician?
8. Who supports the member throughout the transition?
9. Are high-cost medications billed under the medical benefit reviewed alongside pharmacy-benefit claims?
10. Are biosimilars and therapeutic alternatives evaluated?
11. Are medication-acquisition and site-of-administration costs evaluated together?
12. Can our vendors document realized savings at the individual claim level?
13. Are projected savings clearly distinguished from realized savings?
14. Are member out-of-pocket costs included in the analysis?
15. Are brokers, advisors and plan sponsors receiving transparent reporting?
16. Does the program measure whether members successfully complete recommended transitions?
17. Does the employer have a strategy for recurring high-cost infusions before the next claim occurs?
18. Are network discounts being compared with the lowest clinically appropriate net cost?

A “no” or “not sure” answer may indicate a meaningful cost-containment opportunity.

KEY TAKEAWAYS

Location Can Substantially Affect Cost

Commercial data consistently show that hospital outpatient departments may receive significantly more for specialty drugs and infusion services than physician offices, independent centers or specialty pharmacies.¹ ⁴ ⁵

Buy and Bill Can Add Medication Markups

Under buy and bill, the provider purchases the medication and then bills the health plan under the medical benefit. The plan’s reimbursement may be substantially higher than the provider’s acquisition cost.⁴

Higher Prices Do Not Always Produce Better Outcomes

The commercial infusion study highlighted by Drug Channels found higher plan and patient costs in hospital outpatient departments without measurable improvements in the safety or outcome measures evaluated.¹ ⁵

Medicare Is Expanding Site-Neutral Reimbursement

CMS expanded site-neutral payment to qualifying drug-administration services performed in previously excepted off-campus hospital departments beginning January 1, 2026.²

The Commercial Opportunity May Be Substantial

Research has estimated tens of billions of dollars in potential annual commercial-market savings and hundreds of billions of dollars over a ten-year period under broad site-neutral reimbursement.³

Commercial Adoption Remains Limited

Despite the potential savings, PSG data indicate that only a minority of commercial plan sponsors currently have comprehensive specialty-pharmacy site-of-care programs.¹ ⁸

Large Discounts Do Not Necessarily Equal Low Costs

A significant network discount from an inflated hospital charge can still leave an employer paying substantially more than an available clinically appropriate alternative.

Successful Programs Require Active Coordination

Identifying a lower-cost site is only the first step. Clinical review, physician engagement, medication sourcing, authorization, member support and transparent measurement are essential to realizing savings.

NIH Manages These Cases Every Day

The high-cost pharmacy, buy and bill and infusion scenarios described throughout this brief reflect the real types of cases NIH identifies, coordinates and manages for self-funded employers and their members.

CONCLUSION

High-cost pharmacy and infusion claims are among the most financially disruptive areas of employer-sponsored healthcare.

Medicare’s movement toward site-neutral reimbursement demonstrates that the setting of care must become part of every serious cost-containment strategy.

However, the treatment location is only part of the issue.

Employers must also understand:

• How the medication was acquired
• Whether a buy and bill markup was applied
• What facility and administration charges were added
• Whether a lower-cost sourcing pathway was available
• Whether the member could safely receive care in another setting

The opportunity is not simply to pay a lower facility rate or negotiate a larger discount.

It is to establish a coordinated process that evaluates the medication, sourcing arrangement, provider, facility, administration method, member experience and total net cost as a single clinical and financial event.

National Integrative Health helps employers and their advisors identify medication markups and site-of-care opportunities, evaluate appropriate alternatives, coordinate interventions and document measurable outcomes—while keeping the member and treating physician at the center of the process.

The treatment should determine the care plan. The building should not determine the price.

ABOUT NATIONAL INTEGRATIVE HEALTH

National Integrative Health provides transparent, clinically guided solutions addressing high-cost pharmacy, specialty medications, infusion therapies and managed-care needs.

Through claims analytics, clinical review, nationwide infusion capabilities, alternative medication-sourcing strategies, buy and bill analysis, site-of-care optimization and dedicated case management, NIH works with employers, brokers, consultants, TPAs and other plan partners to reduce avoidable costs while supporting members throughout their treatment journeys.

NIH’s solutions are designed to complement an employer’s existing benefits infrastructure and work alongside current PBMs, TPAs, advisors and clinical partners.

SPONSORED CONTENT AND METHODOLOGY DISCLOSURE

This issue brief was sponsored by National Integrative Health and developed for educational and informational purposes.

It was inspired by the July 14, 2026, Drug Channels article, “Medicare Embraces Site-Neutral Payments. Why Haven’t Employers?” by Bryce Platt, PharmD. National Integrative Health was not involved in the preparation or publication of the original article.

This brief incorporates information from the original article and from the government, academic and industry sources listed below. NIH has provided additional interpretation concerning the potential implications for employers, brokers, advisors and commercial health plans.

Descriptions of NIH’s case-management process reflect the types of high-cost pharmacy, buy and bill and infusion cases NIH manages in its daily work. Savings and outcomes for individual cases and health plans will vary.

The simplified dollar examples used in the buy and bill discussion are provided solely to explain how the billing model can operate. They are not presented as actual claims or guaranteed savings results.

This document is not legal, actuarial, medical or fiduciary advice. References to potential savings are based on third-party studies, modeled estimates, Medicare analyses or NIH experience and should not be interpreted as a guarantee of results for every plan or member.

Actual outcomes will vary based on:

• Member population
• Plan design
• Medication utilization
• Provider contracts
• Geographic availability
• Existing vendor arrangements
• Clinical circumstances
• Member participation
• Implementation strategy

SOURCES AND REFERENCES

¹ Platt, Bryce, PharmD. “Medicare Embraces Site-Neutral Payments. Why Haven’t Employers?” Drug Channels, July 14, 2026.

² Centers for Medicare & Medicaid Services. “Calendar Year 2026 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Final Rule (CMS-1834-FC).” CMS Fact Sheet, November 21, 2025. Effective January 1, 2026.

³ Parente, Stephen T. “Impact of Site-Neutral Payments for Commercial and Employer-Sponsored Plans.” INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 2024. DOI: 10.1177/00469580241275758.

⁴ Carlson, Chris; Armstrong, Steven; and Henry, Dhwane. Pricing of Specialty Drugs: Analysis of the Impact on Premiums of Provider Markups on Specialty Drugs. Oliver Wyman, commissioned by AHIP, March 14, 2024.

⁵ Cullen, D., et al. “Infusion Therapy Patient Outcomes Are Similar at Reduced Costs in Alternative Sites of Care Compared With Hospital Outpatient Departments.” Journal of Managed Care & Specialty Pharmacy, 2026. DOI: 10.18553/jmcp.2025.25264.

⁶ Centers for Medicare & Medicaid Services. “CMS Finalizes Hospital Outpatient Prospective Payment Changes for 2017.” CMS Fact Sheet, November 1, 2016.

⁷ Congressional Budget Office. Federal budget estimates for broader site-neutral payment policies affecting services delivered in hospital outpatient departments, 2025–2034, as cited by Platt in Drug Channels, July 14, 2026.

⁸ Pharmaceutical Strategies Group. 2026 Trends in Specialty Drug Benefits Report. PSG, 2026.

ADDITIONAL BACKGROUND SOURCES

AHIP. “New Research Highlights Premium Impact of Provider Markups on Specialty Drugs.” April 18, 2024.

Georgetown University Center on Health Insurance Reforms. “Designing a Site-Neutral Policy for the Commercial Market: Summary of a New Framework for Policymakers.” April 9, 2026.

Medicare Payment Advisory Commission. Report to the Congress: Medicare Payment Policy. Chapter addressing hospital inpatient and outpatient services and site-neutral payment policies, March 2026.

West Health Policy Center and Committee for a Responsible Federal Budget. Moving to Site Neutrality in Commercial Insurance Payments. February 2023.

Blue Cross Blue Shield Association and Ellis Health Policy. Estimated Savings from Adopting Site-Neutral Payment Policies. February 2023.

KFF. “Five Things to Know About Medicare Site-Neutral Payment Reforms.” June 14, 2024.