Preventing Hospital Overbilling of Medicare Act

Key Points

• The bill eliminates loopholes that let hospitals charge higher "facility fees" for services provided at off-campus outpatient clinics, requiring them to be paid at the same rate as freestanding physician offices. This is known as "site-neutral" payment and would apply to Medicare starting January 1, 2026.
• Starting in 2026, every off-campus hospital outpatient clinic must get its own unique billing ID number (NPI), so Medicare and insurance companies can clearly see where care was actually delivered, instead of it being lumped in with the main hospital.
• The bill removes existing exceptions that previously allowed certain off-campus departments (including those grandfathered in before 2015 and off-campus emergency departments) to continue billing at the higher hospital outpatient rate.
• Insurance companies and group health plans would be allowed to reject claims from off-campus clinics that do not follow the new billing rules, protecting patients from inflated charges beyond just Medicare.
• The bill asks HHS to request that the National Association of Insurance Commissioners create a model state law based on a Colorado approach, so states can adopt similar protections for private insurance markets.