The American Medical Association (AMA) has responded to the Obama administration’s initial plan to remove hospital payment incentives that have promoted consolidation in the health care industry.

Part of the 2017 proposed hospital outpatient payment rule, the new proposal from the Centers for Medicare and Medicaid Services (CMS) aims to align payment policies for physicians in independent practice with those owned by hospitals. According to AMA, the CMS proposal could help stem the tide of consolidation by large systems and help small practices maintain their independence.

CMS proposes to reduce the incentives for hospitals to purchase physician practices by paying the same Medicare rates after future hospital acquisitions, whether physician services are provided in freestanding independent practices or in off-campus, hospital-owned practices. Exceptions are provided for emergency department services.

“Providing similar payments for similar professional services located outside of a hospital campus, regardless of facility ownership, could lead to a more level economic playing field and help preserve independent practice,” says Andrew W. Gurman, MD, president of AMA. “The new policy is more equitable for patients, who, CMS notes, often pay more for the same service provided in an off-campus department of a hospital.”

According to AMA, small, independent physician practices are a vital component of the nation’s health care system, providing many valuable services to patients and communities. Maintaining their viability is key to preserving physician leadership in patient-centered delivery system innovation, the association continues.