Sec. 71116. State directed payments
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Subject to subsection (b), the Secretary of Health and Human Services (in this section referred to as the Secretary) shall revise section 438.6(c)(2)(iii) of title 42, Code of Federal Regulations (or a successor regulation) such that, with respect to a payment described in such section made for a service furnished during a rating period beginning on or after the date of the enactment of this Act, the total payment rate for such service is limited to— in the case of a State that provides coverage to all individuals described in section 1902(a)(10)(A)(i)(VIII) of the Social Security Act ( 42 U.S.C. 1396a(a)(10)(A)(i)(VIII) ) that is equivalent to minimum essential coverage (as described in section 5000A(f)(1)(A) of the Internal Revenue Code of 1986 and determined in accordance with standards prescribed by the Secretary in regulations) under the State plan (or waiver of such plan) of such State under title XIX of such Act, 100 percent of the specified total published Medicare payment rate (or, in the absence of a specified total published Medicare payment rate, the payment rate under a Medicaid State plan (or under a waiver of such plan)); or in the case of a State other than a State described in paragraph (1), 110 percent of the specified total published Medicare payment rate (or, in the absence of a specified total published Medicare payment rate, the payment rate under a Medicaid State plan (or under a waiver of such plan)).
In the case of a payment described in section 438.6(c)(2)(iii) of title 42, Code of Federal Regulations (or a successor regulation) for which written prior approval (or a good faith effort to receive such approval, as determined by the Secretary) was made before May 1, 2025, or a payment described in such section for a rural hospital (as defined in subsection (d)(2)) for which written prior approval (or a good faith effort to receive such approval, as determined by the Secretary) was made by the date of enactment of this Act, for the rating period occurring within 180 days of the date of the enactment of this Act, or a payment so described for such rating period for which a completed preprint was submitted to the Secretary prior to the date of enactment of this Act, beginning with the rating period on or after January 1, 2028, the total amount of such payment shall be reduced by 10 percentage points each year until the total payment rate for such service is equal to the rate for such service specified in subsection (a).
The revisions described in subsection
(a)shall provide that, with respect to a State that begins providing the coverage described in paragraph
(1)of such subsection on or after the date of the enactment of this Act, the limitation described in such paragraph shall apply to such State with respect to a payment described in section 438.6(c)(2)(iii) of title 42, Code of Federal Regulations (or a successor regulation) for a service furnished during a rating period beginning on or after the date of enactment of this Act. In this section: The term rating period has the meaning given such term in section 438.2 of title 42, Code of Federal Regulations (or a successor regulation). The term rural hospital means the following: A subsection
(d)hospital (as defined in paragraph (1)(B) of section 1886(d) of the Social Security Act ( 42 U.S.C. 1395ww(d) )) that— is located in a rural area (as defined in paragraph (2)(D) of such section); is treated as being located in a rural area pursuant to paragraph (8)(E) of such section; or is located in a rural census tract of a metropolitan statistical area (as determined under the most recent modification of the Goldsmith Modification, originally published in the Federal Register on February 27, 1992 (57 Fed. Reg. 6725)). A critical access hospital (as defined in section 1861(mm)(1) of such Act ( 42 U.S.C. 1395x(mm)(1) )). A sole community hospital (as defined in section 1886(d)(5)(D)(iii) of such Act ( 42 U.S.C. 1395ww(d)(5)(D)(iii) )). A Medicare-dependent, small rural hospital (as defined in section 1886(d)(5)(G)(iv) of such Act ( 42 U.S.C. 1395ww(d)(5)(G)(iv) )). A low-volume hospital (as defined in section 1886(d)(12)(C) of such Act ( 42 U.S.C. 1395ww(d)(12)(C) )). A rural emergency hospital (as defined in section 1861(kkk)(2) of such Act ( 42 U.S.C. 1395x(kkk)(2) )). The term State means 1 of the 50 States or the District of Columbia. The term total published Medicare payment rate has the meaning given to such term in section 438.6(a) of title 42, Code of Federal Regulations (or a successor regulation). The term written prior approval has the meaning given to such term in section 438.6(c)(2)(i) of title 42, Code of Federal Regulations (or a successor regulation). There are appropriated out of any monies in the Treasury not otherwise appropriated $7,000,000 for each of fiscal years 2026 through 2033 for purposes of carrying out this section, to remain available until expended.
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- 57 FR 6725
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