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HR 3023119th CongressIn Committee
Preventing Hospital Overbilling of Medicare Act
Introduced: Apr 24, 2025
Standard Summary
Comprehensive overview in 1-2 paragraphs
The Preventing Hospital Overbilling of Medicare Act aims to curb incorrect billing by off-campus hospital locations and push toward site-neutral payment policies for these departments. It would redefine and expand how off-campus outpatient departments (OOPDs) are treated for Medicare, require that such departments have separate identifiers (distinct NPIs and health IDs) and bill using standardized transaction formats, and establish similar protections for private health plans through a new NAIC model act. The package centers on reducing overbilling by ensuring items and services provided at off-campus departments are billed separately from the hospital itself, beginning in 2026 for most provisions, with some timing adjustments related to off-campus emergency departments. In short, the bill aims to prevent hospitals from charging Medicare (and private payers) as if off-campus services were being furnished at the main hospital campus, by tightening definitions, separating billing identifiers, standardizing billing formats, and extending payer-side protections.
Key Points
- 1Expanded and accelerated site-neutral payment concepts for off-campus outpatient departments (OOPDs): The bill amends the Medicare site-neutral framework to redefine what counts as an off-campus outpatient department and applies these changes to items and services furnished on or after January 1, 2026. It also modifies the treatment of off-campus emergency departments to remove the prior exception, with a timing adjustment noted as “before January 1, 2026.”
- 2Separate identifiers for off-campus departments: By January 1, 2026, each off-campus outpatient department of a provider must have a separate unique health identifier (NPI) distinct from the provider’s main NPI. The Secretary must revise federal regulations to treat each OOPD as a subpart of the provider and assign these separate identifiers accordingly.
- 3Billing requirements for off-campus departments: For Medicare, items and services furnished at an off-campus department must be billed using the department’s separate unique health identifier and submitted on standard claim formats (HIPAA X12 837P or CMS 1500). Similar billing requirements apply to other parts of Title XVIII and to private payers under the new section added to the Public Health Service Act (PHS Act).
- 4Private payer alignment via a model act: The bill directs the Secretary to obtain the National Association of Insurance Commissioners (NAIC) to develop a model Act or regulation within six months of enactment. The model would require health plans and issuers to reject claims for off-campus department services unless billed according to the new system (including the separate department identifiers), drawing on provisions similar to Colorado’s HB 18-1282.
- 5Administrative and enforcement mechanics: The bill adds a new billing requirement section to the PHS Act (Section 2799B-10) to ensure that health plans and issuers reject non-conforming off-campus department claims. It also creates a formal mechanism to extend site-neutral policies across Medicare and related programs, with effective dates anchored to January 1, 2026.
Impact Areas
Primary group/area affected- Hospitals and health systems with off-campus outpatient departments and their billing operations. They would need to establish separate NPIs and unique identifiers for each off-campus department and adjust their claims processes to bill using those identifiers and standard formats.Secondary group/area affected- Medicare beneficiaries receiving services at off-campus departments (patients would see claims routed and billed more consistently, potentially reducing misbilling for these services).- Private health plans and health insurers, which would be encouraged (via NAIC model act) to reject improper off-campus department claims that are not billed with the separate identifiers and required formats.Additional impacts- Payer and provider administrative burden: Hospitals will need to implement new identifiers, subpart treatment, and updated billing workflows; insurers will need to enforce the model act provisions.- Potential payer mix impact: If site-neutral payments for certain off-campus locations increase or decrease, reimbursements to hospitals could shift, affecting hospital revenue from off-campus departments.- Legislative and regulatory coordination: The bill would require updates to CMS regulations (CFR) and corresponding private-sector regulations via an NAIC model act, potentially resulting in broader market changes beyond Medicare.Site-neutral payments: Paying the same rate for similar services regardless of whether they are furnished in an on-campus or off-campus location, to prevent higher charges simply due to location.Off-campus outpatient department (OOPD): A hospital department located away from the main campus that provides outpatient services.NPI (National Provider Identifier): A unique identification number for health care providers used in billing.HIPAA X12 837P and CMS 1500: Standard formats/forms used for submitting health care claims to payers.Unique health identifier for a department: A distinct identifier (separate from the hospital’s main NPI) assigned to each off-campus department for claims processing.NAIC model act: A proposed model guidance for state insurance regulators to harmonize private payer rules with federal requirements.
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