Sponsors (7)
The bill redirects Medicare wage-index dollars to lower‑wage hospitals to help preserve services and access, but does so only partially and in a budget‑neutral way that may reduce payments elsewhere and leaves implementation uncertainty.
Hospitals in low-wage areas — especially rural and underserved hospitals — will receive higher Medicare inpatient wage indexes, increasing payments that can help sustain services and preserve local inpatient access for Medicare and other patients, reducing closure risk.
The adjustment targets additional dollars toward lower-wage areas rather than a blanket increase, focusing limited federal payment changes on hospitals with greater need.
Because the change must be budget-neutral, the increased payments to low-wage hospitals will be offset by reductions elsewhere in Medicare payments, potentially lowering payments to other hospitals and shifting costs to beneficiaries or taxpayers.
Raising the wage index only halfway toward the gap provides limited relief, so the lowest‑wage hospitals may still face significant funding shortfalls and remain at risk.
An unfinished/unclear constraint on how budget-neutral adjustments may be applied creates implementation and predictability uncertainty for HHS and hospitals.
Based on analysis of 2 sections of legislative text.
Establishes a statutory low‑wage area wage index adjustment that raises indexes below the 25th percentile by half the gap, applied budget‑neutrally for discharges on/after Oct 1, 2019.
Official title: To amend title XVIII of the Social Security Act to codify the Medicare low-wage index hospital policy.
Introduced March 26, 2026 by David Kustoff · Last progress March 26, 2026
Creates a statutory adjustment to the Medicare inpatient prospective payment system wage index that raises area wage indexes below the 25th percentile. For discharges on or after October 1, 2019, a hospital whose unadjusted area wage index is below the 25th percentile will have its applicable wage index increased by half the gap between its index and the 25th percentile, with the change implemented budget‑neutrally under existing rules. The change codifies an explicit low‑wage floor mechanism in law, amends cross‑references in the existing statute to include the new clause, and ties application to the existing budget‑neutrality requirement (with a textual constraint on adjustments left unfinished in the amendment text).