Sponsors (3)
The bill directs a targeted COLA to raise OPD payments for Alaska and Hawaii hospitals—likely improving local outpatient access—but increases Medicare costs and creates relative funding gaps for other providers.
Hospitals and health systems in Alaska and Hawaii will receive higher Medicare outpatient department (OPD) payments from Jan 1, 2026 because the non‑labor share of the OPD rate gets a COLA adjustment.
Patients in Alaska and Hawaii—particularly those in rural or high‑cost areas—may see improved outpatient access and continuity of services if hospitals use the additional revenue to maintain or expand care.
Medicare spending (and potentially federal deficits or taxpayer costs) will increase because the COLA adjustment cannot be applied budget‑neutrally.
Hospitals and Medicare payment areas outside Alaska and Hawaii may face relative funding disparities because they do not receive similar COLA increases, which could strain other rural or resource‑constrained providers.
Based on analysis of 2 sections of legislative text.
Allows non-labor cost-of-living adjustments to Medicare OPD payments for hospitals in Alaska and Hawaii starting Jan 1, 2026, and permits those adjustments to be non-budget neutral.
Introduced February 12, 2025 by Daniel Scott Sullivan · Last progress February 12, 2025
Allows the HHS Secretary to increase Medicare outpatient department (OPD) payment rates for hospitals in Alaska and Hawaii by applying cost-of-living adjustments (COLA) to the non-labor portion of those payments, beginning January 1, 2026. The extra payment authority is explicitly allowed to be non-budget neutral, meaning it can increase overall Medicare spending for OPD services in those states.