Sponsors (6)
The bill directs more Medicare inpatient wage-index funding to lower-wage hospitals to help preserve local care, but does so in a budget-neutral and only partial way that shifts costs elsewhere and leaves some very low-wage hospitals still underfunded while creating implementation uncertainty.
Hospitals in low-wage (often rural or underserved) areas will receive higher Medicare inpatient wage-index payments, helping sustain services and preserve local inpatient access for Medicare and other patients.
Payments are targeted toward lower-wage areas rather than blanket increases, concentrating limited funds on hospitals with greater need.
Because the change must be budget-neutral, other hospitals or Medicare payments may be reduced to offset the increase, shifting funds away from some providers and potentially affecting care or beneficiary costs elsewhere.
Raising the wage index only partway (to half the gap) may provide limited relief, so very low-wage hospitals could still face funding shortfalls and remain at risk of service reductions or closure.
An unfinished/unspecified constraint on how budget-neutral adjustments are applied creates uncertainty for CMS implementation and for hospitals planning finances, reducing predictability of future payments.
Based on analysis of 2 sections of legislative text.
Creates a budget‑neutral low‑wage index adjustment that raises area wage indexes below the 25th percentile halfway toward the 25th percentile for Medicare IPPS payments, effective 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 budget‑neutral adjustment to the Medicare inpatient prospective payment system (IPPS) hospital area wage index that lifts low wage indexes toward the 25th percentile. For discharges on or after October 1, 2019, hospitals with an area wage index below the 25th percentile (as calculated without this new clause) will have their wage index increased by half the gap to the 25th percentile, with the adjustment applied in a budget‑neutral manner under existing statutory rules.