This bill changes how Medicaid helps safety‑net hospitals that treat many low‑income and uninsured patients. It updates the rules for the hospital payment cap, including how other insurance (like Medicare or certain private plans tied to Medicare) is counted when figuring hospital costs and payments. It also clarifies which patients can be included when a hospital shows that its costs are higher than what it was paid. These updates aim to make sure hospitals can get fair support for care they already provided to people with limited coverage or no coverage .

States also get flexibility to use unspent hospital support funds from recent past years (starting October 1, 2021) to boost payments to hospitals for those years, up to the updated cap. States don’t have to take back past payments that were allowed under the earlier rules. They may adjust their Medicaid plans after the fact to make these increases, as long as they do so before required audit deadlines and report the changes in their next annual report. Most changes apply to payment years starting on or after the date this becomes law .

• Who is affected: Safety‑net hospitals and state Medicaid programs .
• What changes: Updates the hospital payment cap rules to account for Medicare/other applicable plan payments; clarifies which patients can be counted toward hospital shortfalls; lets states use unspent past funds to increase prior payments; bars recouping certain past payments; allows limited retroactive plan changes with reporting .
• When it starts: Generally for Medicaid payment years beginning on or after the date it becomes law; flexibility for unspent funds applies to years beginning on or after October 1, 2021 and before enactment, with deadlines tied to audit submissions .