H.R. 3023: Preventing Hospital Overbilling of Medicare Act

This bill, titled the Preventing Hospital Overbilling of Medicare Act, aims to amend certain provisions related to how healthcare providers, particularly hospitals, bill for services provided at off-campus outpatient departments. The bill seeks to address issues of incorrect billing practices that may result in higher costs for Medicare and, consequently, for patients.

Key Provisions of the Bill

1. Medicare Site-Neutral Payments

The bill proposes several changes to promote site-neutral payments, which means that the payment for services should not vary significantly based on the location of the service. Key changes include:

• Removing Exceptions: The bill removes certain exceptions that currently allow hospitals to bill as if services were provided on-campus, even when they are performed at off-campus sites. This aims to limit overbilling practices.
• Effective Date: These changes would take effect for services provided from January 1, 2026, onwards.
• Emergency Departments: It restricts the billing exceptions for off-campus emergency departments until January 1, 2026.
• Empowering the Secretary: The bill gives authority to the Secretary of Health and Human Services to take actions to promote site-neutral payment policies, ensuring hospitals do not overcharge for outpatient services.

2. Unique Health Identifiers for Off-Campus Outpatient Departments

The bill mandates that each off-campus outpatient department must have a separate unique health identifier by January 1, 2026. This change is aimed at enhancing clarity in billing and ensuring that services are accurately recorded and billed.

3. Billing Requirements for Off-Campus Departments

Hospitals must adhere to new billing requirements when providing services at off-campus outpatient departments. These include:

• Billing Methodology: Hospitals will be required to bill for services using the unique health identifier assigned to the off-campus department.
• Standardized Forms: Claims must be submitted using standard healthcare transaction forms like HIPAA X12 837P or CMS 1500. This is designed to ensure uniformity and reduce discrepancies in billing.

Additionally, other providers are also required to follow these billing standards when dealing with off-campus outpatient departments.

4. National Association of Insurance Commissioners (NAIC) Involvement

The Secretary of Health and Human Services is instructed to request the NAIC to create a model Act or regulation to prevent inappropriate billing at off-campus outpatient departments. This will provide guidelines for health insurers and group health plans regarding claims that can be accepted from these departments.

Overall Goal

The overarching goal of this bill is to mitigate situations where hospitals improperly bill Medicare for outpatient services, which can lead to higher costs for both the program and patients. By ensuring clarity and consistency in billing practices, the bill aims to promote fair billing and reduce unnecessary expenditures.

Relevant Companies

• HCA - HCA Healthcare operates numerous hospitals and outpatient services and may be significantly impacted by changes to billing practices for off-campus departments.
• UNH - UnitedHealth Group, as a major health insurer, could be affected by new billing requirements and regulations from healthcare providers.
• CMI - Cummins Inc. may indirectly feel impact in terms of employee healthcare costs associated with changes in Medicare billing practices.