Preventing Hospital Overbilling of Medicare Act

Bill Number

H.R. 3023

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Health

Status

Introduced

Latest Action

2025-04-24: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last Updated

2026-06-11T23:41:31Z

AI-Generated Summary

Purpose of the Legislation

The Preventing Hospital Overbilling of Medicare Act (H.R. 3023) aims to stop hospitals from incorrectly billing Medicare and private health insurance for services provided at off-campus outpatient departments (locations not on the main hospital grounds) at higher hospital rates. Instead, it promotes "site-neutral" payments, where off-campus services are reimbursed at lower rates similar to those for independent clinics or doctor's offices, to reduce overbilling and control healthcare costs.

Key Provisions

• Redefinition of Off-Campus Outpatient Departments: Narrows the legal definition to include more hospital-affiliated locations that are not on the main campus or within a specified distance from a remote hospital facility, removing prior exceptions that allowed higher billing.
• End to Exceptions for Emergency Services: Stops off-campus emergency departments from qualifying for higher hospital payment rates after December 31, 2025.
• Secretary's Authority for Site-Neutral Policies: Empowers the Secretary of Health and Human Services (HHS) to implement measures ensuring off-campus services are billed and paid at site-neutral rates, such as preventing hospitals from claiming main-campus rates for off-campus care.
• Separate National Provider Identifiers (NPIs): Requires each off-campus outpatient department to get its own unique NPI (a unique ID number for healthcare providers used in billing) by January 1, 2026. HHS must update regulations to treat these departments as separate "subparts" of the hospital for identification purposes.
• Billing Requirements:
• For Medicare: Hospitals must bill using the off-campus department's separate NPI on specific forms (like HIPAA X12 837P or CMS 1500) starting January 1, 2026.
• For Private Insurance: Prohibits hospitals from submitting claims to group health plans or insurers without using the separate NPI on the required forms; patients cannot be held liable for services if billed incorrectly.
• National Association of Insurance Commissioners (NAIC) Model: Directs HHS to request that NAIC create a model law or regulation within 6 months of enactment, allowing insurers and plans to reject improper claims from off-campus departments. This model should mirror requirements in Colorado House Bill 18-1282, which addresses similar billing issues.

All changes take effect for services furnished on or after January 1, 2026, unless otherwise noted.

Significant Changes to Existing Law

• Tightens Medicare Payment Rules: Amends Section 1833(t) of the Social Security Act to eliminate loopholes in the Bipartisan Budget Act of 2015, which had allowed some off-campus departments (opened before 2015) to bill at higher rates. This forces broader application of site-neutral payments under the Outpatient Prospective Payment System (OPPS).
• Expands NPI Requirements: Adds to Section 1173(b) of the Social Security Act, mandating unique NPIs for off-campus sites, and revises federal regulations (45 CFR 162.408 and 162.410) to enforce this.
• New Private Insurance Protections: Introduces Section 2799B-10 to the Public Health Service Act, creating billing standards for non-Medicare plans that did not previously exist at the federal level.
• Enhanced HHS Oversight: Adds explicit authority in Section 1833(t)(2)(F) for the Secretary to combat overbilling, going beyond current discretionary powers.

Potential Impacts

• On Government Agencies: HHS and the Centers for Medicare & Medicaid Services (CMS) will face increased administrative duties, such as assigning NPIs, updating regulations, and enforcing site-neutral policies, potentially leading to cost savings for Medicare estimated in the billions over time by reducing overpayments.
• On Citizens: Medicare beneficiaries and privately insured individuals may see lower out-of-pocket costs for off-campus services due to reduced billing rates, though access to care could be affected if hospitals close or limit off-campus operations to cut losses.
• On International Relations: No direct impacts, as this is a domestic healthcare billing reform.
• Broader Effects: Could lower overall healthcare spending for insurers, potentially stabilizing premiums, but might strain rural or underserved hospitals reliant on higher reimbursements.

Main Stakeholders Affected

• Hospitals and Health Systems: Particularly those with off-campus outpatient facilities, as they will lose revenue from higher billing rates and face new compliance costs for separate NPIs and billing processes.
• Medicare and Beneficiaries: CMS gains tools to curb overbilling, benefiting enrollees through potential savings; seniors and disabled individuals using off-campus services are primary users.
• Private Insurers and Group Health Plans: Empowered to reject invalid claims, reducing payouts and administrative burdens.
• Patients and Consumers: Gain protections against surprise or inflated bills for off-campus care.
• States and Regulators: NAIC and state insurance departments may adopt the model law, influencing local enforcement.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens enforcement under the Health Insurance Portability and Accountability Act (HIPAA) for billing standards, potentially leading to more audits, penalties for non-compliance, or lawsuits from hospitals challenging the redefinition of off-campus sites as arbitrary or retroactive.
• Constitutional: No direct challenges anticipated, but could raise due process concerns if hospitals argue the changes impair existing contracts or property interests in facilities built under prior rules.
• Political: Advances bipartisan efforts to control Medicare costs amid rising national debt, but may face opposition from hospital lobbies (e.g., American Hospital Association) citing impacts on care access; aligns with trends in healthcare reform emphasizing payment equity without altering core provider agreements.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Spartz, Victoria [R-IN-5]

Recent Actions

• 2025-04-24: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-04-24: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-04-24: Introduced in House
• 2025-04-24: Introduced in House

Bill Versions

• Preventing Hospital Overbilling of Medicare Act — issued 2025-04-24 — PDF (7 pages)