Summary

Increases outpatient Medicare payments to sole community hospitals located in Alaska and Hawaii when the OPPS payment would be less than 94% of the hospital’s reasonable outpatient costs. The change preserves existing beneficiary copayment amounts, specifies the additional payments are not treated as certain OPPS adjustments and are not budget-neutral, and requires the Secretary of HHS to issue implementing regulations within six months.

Key Points

• Raises outpatient Medicare payments for sole community hospitals in Alaska and Hawaii when OPPS payments are below 94% of reasonable outpatient costs.
• Protects existing beneficiary copayment amounts; patient cost-sharing is not increased or reduced by this change.
• Additional payments are excluded from certain OPPS adjustment rules and are not budget-neutral (they increase net Medicare outlays).
• Requires the Secretary of HHS to issue implementing regulations within six months of enactment.
• Applies only to sole community hospitals in Alaska and Hawaii, making the change geographically and provider-type specific.
• Likely improves revenue for the small set of affected hospitals when OPPS rates undercompensate their reasonable costs.
• Does not change the underlying OPPS payment system except for the added payment when the 94% threshold applies.
• Administrative action by CMS will be needed to define mechanics and timing of the payment increase.

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