The SOLES Act would create a new floor on outpatient payments for sole community hospitals located in Alaska and Hawaii under the hospital outpatient prospective payment system. It adds a new paragraph to Section 1833(t) establishing a 94 percent floor relative to reasonable costs, with the Secretary increasing payments to make up the difference when a SCH’s payments fall short.
The bill specifies that copayments are unaffected, and that these additional payments are not budget-neutral. It also requires the Secretary to issue regulations within six months of enactment to implement the change, with those new payments applying to covered OPD services furnished on or after the first January 1 following the date of enactment.
At a Glance
What It Does
Creates a 94% of reasonable costs floor for OPD payments to AK/HI sole community hospitals. If payments are below that floor, the difference is added. The change is not budget-neutral and does not affect copayments. Regulations must be issued within six months of enactment and apply to OPD services from the next January 1 after regs take effect.
Who It Affects
Sole community hospitals located in Alaska and Hawaii and their outpatient departments, the CMS/Secretary implementing the rule, and Medicare beneficiaries who receive OPD services at those hospitals.
Why It Matters
Targeted relief for remote SCHs stabilizes access to outpatient care in sparsely served regions, potentially improving continuity of care for local populations while altering short-term Medicare outlays.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The bill targets a specific group of hospitals—sole community hospitals in Alaska and Hawaii—that provide outpatient services. It would require Medicare to ensure these hospitals receive payments worth at least 94 percent of their reasonable costs for covered outpatient services.
If the current payment falls short, CMS must increase the payment by the difference. Importantly, this change does not alter copayments and is not subject to budget-neutral adjustments.
The provision would be implemented through regulations to be issued within six months of enactment and would apply to OPD services furnished starting on the first January 1 after those regulations take effect. The overall aim is to bolster the financial viability of these hospitals so they can continue delivering essential outpatient care in remote areas.
The policy will raise federal outlays to support higher payments, and it places a regulatory duty on CMS to define and operationalize the “reasonable costs” standard and the mechanics of the payment floor.
The Five Things You Need to Know
The bill adds a new 1833(t) paragraph (23) requiring a 94% floor on payments for covered OPD services at AK/HI SCHs.
If payments are below 94% of reasonable costs, CMS increases the payment by the difference.
Copayments are unchanged by this provision.
The extra payments are explicitly not budget-neutral and are not treated as standard adjustments.
Regulations must be issued within six months, with the floor applying to OPD services furnished on or after the next January 1 after the regs take effect.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
This section designates the act as the Save Our Lone Emergency Services Act (SOLES Act). It provides the bill’s formal identifier and sets the stage for the amendment to the Social Security Act.
Floor on AK/HI SCH outpatient payments under OPD PPS
Section 1833(t) is amended by adding the new paragraph (23), which creates a payment floor for covered outpatient department services furnished by sole community hospitals located in Alaska or Hawaii. If payment under this subsection is less than 94 percent of reasonable costs, the Secretary must increase payments by the difference. The provision specifies that copayments remain unchanged and that these additional payments are not budget-neutral and are not treated as standard adjustments under the statute.
Rulemaking and effective date
Not later than six months after enactment, the Secretary must promulgate regulations to carry out the new paragraph (23). The regulations will be applicable to covered OPD services furnished on or after the first January 1 following the date the regulations take effect.
This bill is one of many.
Codify tracks hundreds of bills on Healthcare across all five countries.
Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Alaska-based sole community hospitals (explicit beneficiaries of the 94% floor on OPD payments, improving financial viability).
- Hawaii-based sole community hospitals (same rationale as AK, ensuring stable outpatient revenue).
- Medicare beneficiaries in Alaska and Hawaii who rely on outpatient services at SCHs (potential for improved access stability due to hospital viability).
- Rural health provider networks in Alaska and Hawaii (enhanced financial resilience supporting rural health systems).
- State health agencies in Alaska and Hawaii overseeing rural hospital continuity (policy alignment with rural health objectives).
Who Bears the Cost
- The Medicare program and federal taxpayers, due to higher outpatient payments not being budget-neutral.
- CMS (Centers for Medicare & Medicaid Services) administrative costs to implement and oversee the rulemaking and new payment mechanism.
- The broader federal budget, as higher outlays for AK/HI SCH outpatient payments would incrementally affect Medicare spending.
Key Issues
The Core Tension
Balancing guaranteed financial support for remote SCHs against the need to maintain overall Medicare budget discipline and consistent payment policies across regions.
The bill relies on a standard tied to the 94% of reasonable costs benchmark, using definitions of reasonable costs from 1861(v) and the established definition of a sole community hospital in 1886(d)(5)(D)(iii). A key tension is the absence of budget neutrality for the new payments, which implies higher outlays without offsets.
The requirement for a six-month rulemaking clock will test CMS’s ability to finalize viable administrative procedures. The mechanism depends on future regulatory detail to operationalize the 94% floor and to determine how “reasonable costs” are calculated in practice for AK/HI SCHs under the OPD PPS.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.