Sponsor
Victoria Spartz
Representative · R-IN
Representative · R-IN
The bill shifts payments to better reflect patient diagnoses, expand site‑neutral billing, protect certain rural referrals, and increase 340B transparency—benefiting many patients and reducing some costs—while raising federal spending, cutting revenue for hospitals (risking reduced services and access in vulnerable communities), and imposing administrative and fairness risks.
Medicare Advantage enrollees will see risk scores and plan payments better reflect recent diagnoses (using two years of data), improving payment alignment with enrollees' health needs and smoothing year‑to‑year payment volatility for plans and providers.
Many outpatient services will be billed under the physician fee schedule (site‑neutral payments), which lowers patient out‑of‑pocket costs, gives physician offices payment parity with on‑campus departments, and accelerates measures that can slow Medicare spending growth when exceptions sunset.
Low‑income and uninsured patients (and some Medicare patients) will face lower net drug costs for 340B outpatient drugs (no more than a covered entity's acquisition price minus discounts/rebates), and public reporting of amounts paid/received increases program transparency.
Medicare Advantage plans may receive higher payments under the revised risk score rules, increasing federal Medicare spending and raising costs for taxpayers.
Hospitals and covered entities face reduced outpatient drug and facility revenue from site‑neutral payment shifts and 340B reimbursement adjustments, which could force service cuts, consolidation, shifting services off‑campus, or closures—harming access especially at rural and safety‑net providers.
Narrowing the rural exception (and excluding entities just outside the statutory definition) may reduce permissible referrals and access for some rural patients and increase administrative/legal burdens for providers proving they meet the "substantially all" test.
Based on analysis of 6 sections of legislative text.
Revises Medicare payment rules (MA risk adjustment and site‑neutral outpatient payments), narrows a Stark exception for rural providers, limits 340B patient drug prices and requires reporting, and inserts unspecified SNF changes.
Official title: To amend title XVIII of the Social Security Act to improve risk adjustment under Medicare Advantage, and for other purposes.
Introduced May 6, 2025 by Victoria Spartz · Last progress May 6, 2025
Changes to Medicare payment rules and drug-discount program rules that aim to reduce perceived overpayments to Medicare Advantage plans, hospitals, and certain outpatient departments and increase price transparency for covered outpatient drugs. Key changes include using two years of diagnostic data for Medicare Advantage risk adjustment starting in 2026, expanding "site-neutral" payment (paying under the physician fee schedule instead of hospital outpatient rates) for many on‑campus outpatient services beginning in 2026, narrowing a Stark Law exception for some rural providers, requiring covered entities to sell 340B drugs to patients at no more than their acquisition price less discounts/rebates and boosting reporting/transparency, and inserting an unspecified amendment affecting skilled nursing facility payment rules. The bill mainly changes how Medicare pays for services and how 340B drug discounts are applied and reported; many provisions take effect for services on or after January 1, 2026 or for the 2026 payment year, while some details (including the SNF insertion) are not specified in the provided text.