10 FAQs on Why These Matter to Midlife Adults with Private Health Insurance

Outpatient care is common and critically important for the more than 46 million “midlife” adults (ages 50 to 64) with private health insurance. In addition to seeking outpatient preventative care, midlife adults often begin to experience more chronic health conditions that can lead to more medical visits and treatments. Yet, the amount they pay for that care may depend on where they receive it. Because although many outpatient services can be provided safely and effectively in multiple settings, providers may receive a higher reimbursement for the same service in certain types of facilities, which may result in patients paying more out of pocket based solely on the setting.

Outpatient care refers to the range of medical services and procedures provided in outpatient settings (i.e., a provider’s office, ambulatory surgical center, or hospital outpatient department). Outpatient services include routine visits with providers, simple procedures such as mole removals, and more complex procedures such as surgeries.

This AARP Public Policy Institute FAQ focuses on site-based payments for outpatient care under private insurance—the type of coverage for most midlife adults. It examines how the use of facility fees contributes to site-based payments, how they affect midlife adults, and what site-based payment reforms are currently in place and being considered by state and federal policymakers. It addresses the following 10 questions:

1. Where do midlife adults receive outpatient care?
2. What determines where adults receive outpatient services?
3. Why does the same outpatient service have a different payment amount in each setting?
4. What are facility fees, and what role do they play in the price of outpatient services?
5. How do facility fees affect midlife adults?
6. What are site-based payment reforms in health care?
7. How are states enacting site-based payment reforms for private plans?
8. What is driving states to adopt site-based payment reforms for private insurance?
9. How do site-based payment reforms in Medicare compare to those in private insurance?
10. What site-based payment reforms are under consideration?

A previous report explored site-based payments within Medicare and payment reforms.

Most site-based reforms for private insurance have been and continue to be at the state level. Since 2020, 27 states have considered or enacted legislation to eliminate facility fees for certain outpatient services (e.g., telehealth and routine visits) or certain settings (e.g., off-campus hospital outpatient departments) or improve transparency. With growing awareness of the effects site-based payments have on health care spending and consumers’ out-of-pocket costs, it is likely that states will continue efforts to increase price transparency and limit or eliminate facility fees.