The United States Government Accountability Office (GAO) has recommended that Congress consider directing the Secretary of the Department of Health and Human Services (Secretary) to equalize Medicare payment rates for evaluation and management (E/M) services, and other services that the Secretary deems appropriate, performed in all provider settings.  On December 21, 2015, the GAO released a report entitled “Increasing Hospital-Physician Consolidation Highlights Need for Payment Reform.”   The GAO described the increasing practice of hospitals acquiring physician practices and employing the physicians.  The GAO found that one byproduct of this vertical consolidation has been physicians increasingly perform E/M services in hospital outpatient departments rather than in physician offices, resulting in Medicare paying more for the same services and Medicare beneficiaries having higher co-payments.  The GAO noted that the Centers for Medicare & Medicaid Services does not have the statutory authority to equalize total payment rates between hospital outpatient departments and physician offices in order to achieve Medicare savings.  The GAO concluded that in order to prevent the shift of services from physician offices to hospital outpatient departments from increasing costs for the Medicare program and beneficiaries, Congress should consider directing the Secretary to equalize payment rates across provider settings for E/M visits, and other services that the Secretary deems appropriate, and to return the associated savings to the Medicare program.  This GAO report follows Congress limiting Medicare payments to new off-campus outpatient departments effective January 1, 2017, unless an exception applies, in the Bipartisan Budget Act of 2015, Section 603.  It is becoming increasingly apparent that the provider-based status payment differential may soon be eliminated.  GAO report GAO-16-189 is available at