The SOLES Act, introduced in the House (H.R. 4250) by Rep. Begich and Rep. Tokuda on June 30, 2025, would change how Medicare pays for outpatient services at sole community hospitals (SCHs) located in Alaska and Hawaii. It adds a new provision to the hospital outpatient prospective payment system (OPPS) under the Social Security Act. Specifically, if a sole community hospital in Alaska or Hawaii is paid less than 94% of its reasonable costs for covered outpatient department (OPD) services, Medicare would increase the payment by the difference to reach that 94% floor. The bill makes clear these supplemental payments are not budget-neutral and do not affect patient copayments or copayment rules. The act requires the Secretary of Health and Human Services to issue regulations within six months of enactment, and the floor would apply to OPD services furnished on or after the first January 1 following the rulemaking date. In short, the bill aims to improve the financial stability of remote, rural SCHs in Alaska and Hawaii by guaranteeing a minimum reimbursement level for outpatient services, ensuring these critical facilities can continue operating and providing emergency and outpatient care.
Key Points
- 1Establishes a payment floor for Alaska and Hawaii sole community hospitals under the OPPS: if 94% of reasonable costs is higher than current payments for covered OPD services, Medicare pays the difference to reach 94% of costs.
- 2Targeted scope: Applies specifically to sole community hospitals located in Alaska or Hawaii, using definitions from existing law (SCHO defined under 1886(d)(5)(D)(iii)).
- 3Copayments unchanged: The floor payments do not alter patient copayment amounts under existing Medicare rules.
- 4Not budget neutral: The additional payments to achieve the 94% floor are not treated as a budget-neutral adjustment.
- 5Rulemaking and effective date: Requires the Secretary to issue regulations within six months of enactment; the floor applies to covered OPD services furnished on or after the first January 1 after the rulemaking date.