Sponsors (6)
The bill extends Medicare coverage and payment to residential SUD treatment—improving access and care quality for beneficiaries and creating predictable provider payments—while increasing federal costs, administrative burdens, and compliance requirements that may reduce participation by smaller providers and leave some service gaps.
Medicare beneficiaries with substance use disorders (SUDs) gain inpatient‑equivalent coverage for three levels of residential SUD care under Part A, expanding access to covered treatment services.
Residential SUD facilities and hospitals receive a dedicated prospective per‑diem Medicare payment system (PPS) beginning Oct 1, 2026, giving providers more predictable and stable reimbursement.
Coverage is tied to evidence‑based, SUD‑specific admission and continued stay criteria with periodic clinical reviews, which should improve appropriateness, continuity, and overall quality of care for patients in residential SUD programs.
Taxpayers and the Medicare program face increased federal spending from expanding inpatient‑equivalent residential SUD benefits and setting an initial PPS at 100% of estimated costs, which could pressure the Medicare trust fund absent offsets.
Hospitals and smaller residential SUD providers will incur higher compliance costs to meet accreditation, staffing, and documentation requirements, which may drive some small providers out of the Medicare market and reduce local capacity.
Frequent mandatory clinical reviews (potentially as often as every 10 days for some levels) increase administrative burden for providers and may lead to shorter stays, disputes over continued coverage, and disruption of patient care.
Based on analysis of 2 sections of legislative text.
Adds Medicare Part A inpatient‑equivalent coverage and statutory definitions for specified residential SUD services and requires periodic evidence‑based clinical reviews to continue coverage.
Official title: To amend title XVIII of the Social Security Act to establish coverage for certain residential substance use disorder services under the Medicare program.
Introduced June 30, 2026 by Lauren Underwood · Last progress June 30, 2026
Adds Medicare Part A inpatient-equivalent coverage for specified residential substance use disorder (SUD) services for older adults and other Medicare beneficiaries. The bill creates new covered service categories for clinically managed low‑intensity and high‑intensity residential SUD care and expands coverage for medically managed residential SUD services, and requires periodic clinical reviews using evidence‑based SUD criteria to document initial and ongoing need. Defines new facility and program terms in the Social Security Act, gives the Secretary authority to set the frequency of reviews (with statutory minimums of every 10 or 30 days depending on service level), and requires the Secretary to approve the edition of evidence‑based SUD criteria developed by a nonprofit medical association recognized for addiction treatment.