Sponsors
The bill aims to reallocate and better-target Medicare payments and lower some patient prices (especially outpatient services and certain drugs) but does so by shifting revenue away from many hospitals and increasing administrative complexity and potential federal costs, creating a trade-off between patient price relief/targeting and provider financial strain and implementation burden.
Medicare beneficiaries will often pay less out-of-pocket for many outpatient visits and certain outpatient drugs because more services will be billed under the physician fee schedule (site-neutral payments) and drug reimbursements will reflect discounts.
Medicare Advantage enrollees and plans will see more accurate and less volatile risk-adjusted payments because risk scores will use two years of diagnostic data, better aligning payments with enrollees' recent health needs.
Physician offices and independent providers will receive payment parity with on‑campus provider‑based departments for the same outpatient services and the sunsetting of some exceptions accelerates site‑neutral payments, reducing payment distortions and slowing Medicare spending growth over time.
Hospitals (especially safety‑net, rural, and community hospitals) and covered entities may lose outpatient drug and outpatient service revenue because of site‑neutral payments and 340B reimbursement changes, risking service reductions, workforce cuts, or closures that would reduce local access.
Taxpayers and the federal budget could face higher Medicare spending if Medicare Advantage plans receive higher payments under the revised risk adjustment, increasing federal costs.
Some patients — particularly in rural areas or communities served by hospitals that shift services off‑campus — may face reduced local access or longer travel for care if hospitals change where they offer outpatient services or reduce offerings.
Based on analysis of 6 sections of legislative text.
Revises Medicare payment rules: two-year MA risk adjustment, expands site-neutral outpatient payments, narrows a Stark exception to rural cases, and adds 340B pricing, reporting, and SNF law changes.
Introduced May 6, 2025 by Victoria Spartz · Last progress May 6, 2025
Makes multiple Medicare payment and program changes that shift how Medicare Advantage risk scores are calculated, expand site-neutral payment for many hospital outpatient services, narrow one anti-kickback/Stark exception by replacing it with a rural-specific exception, require 340B-covered entities to sell drugs to patients at or below acquisition price (with HHS enforcement and public reporting), and inserts new, unspecified text into skilled nursing facility payment law. Many payment changes take effect in 2026 and require CMS rulemaking and implementation changes.