Sponsors (3)
The bill secures higher Medicare outpatient payments for sole community hospitals in Alaska and Hawaii to preserve local services and protect beneficiaries from higher copays, while increasing costs to taxpayers and raising equity and cost-control concerns for the broader rural hospital population.
Sole community hospitals in Alaska and Hawaii will receive higher OPPS payments (up to 94% of reasonable costs) when current payments fall short, improving their financial stability.
Patients in communities served by these hospitals (including Medicare beneficiaries) are more likely to retain local outpatient services because hospitals receive increased Medicare reimbursements.
Medicare beneficiaries keep their existing copay amounts, avoiding higher out-of-pocket costs as a result of the payment change.
Taxpayers and the Medicare trust funds will face higher spending because the increased payments are explicitly not budget-neutral.
Limiting the payment floor to sole community hospitals only in Alaska and Hawaii creates equity concerns for similarly situated rural hospitals elsewhere that do not receive the same support.
Higher Medicare payments could reduce incentives for affected hospitals to control outpatient costs, potentially raising overall health system spending over time.
Based on analysis of 2 sections of legislative text.
Sets a Medicare OPPS floor so sole community hospitals in Alaska and Hawaii receive at least 94% of reasonable outpatient department costs, with Medicare paying the difference.
Introduced February 12, 2025 by Daniel Scott Sullivan · Last progress February 12, 2025
Creates a minimum Medicare outpatient payment floor for sole community hospitals in Alaska and Hawaii so Medicare OPPS payments for outpatient department services are at least 94% of each hospital’s reasonable costs; Medicare pays the difference when OPPS rates fall below that floor. The measure preserves current beneficiary copay amounts, excludes these additional payments from budget-neutrality offsets, and requires the Department of Health and Human Services to issue implementing regulations within six months; the rule takes effect for services furnished on or after the first January 1 after enactment.