The bill amends section 1833(t) of the Social Security Act to block Medicare payments for services furnished by an off‑campus outpatient department unless that department (1) uses a standard unique health identifier separate from the parent provider and (2) is the subject of an initial and subsequent provider‑based status attestation. The attestation must state compliance with the regulatory standards currently found in 42 C.F.R. §413.65.
The statute directs the Secretary to create a notice-and-comment process for submitting and reviewing these attestations, authorizes on‑site or remote review methods, and requires the HHS Inspector General to analyze the Secretary’s review process and report recommendations to Congress by January 1, 2030. For hospitals and compliance teams, the bill converts a billing classification issue into an affirmative documentation and approval process that gates Medicare payment for off‑campus locations.
At a Glance
What It Does
It conditions Medicare payment on each off‑campus outpatient department obtaining a separate standard unique health identifier and on the provider filing an initial and later attestation that the department meets the provider‑based requirements in current regulation. The Secretary must set up a submission and review process through notice-and-comment rulemaking.
Who It Affects
Hospitals and health systems with off‑campus outpatient departments, their billing and compliance teams, Medicare contractors that process claims, and beneficiaries who receive outpatient care at those locations. It also implicates HHS for administration and the OIG for a mandated review.
Why It Matters
This changes the default operational posture: off‑campus departments will be identifiable and administratively screened before Medicare pays at provider‑based rates. That can reduce improper provider‑based billing but creates a new compliance gate and potential audit exposure for hospitals.
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What This Bill Actually Does
The Fair Billing Act adds a new paragraph to 1833(t) that ties Medicare payment for services furnished at off‑campus outpatient departments to two concrete conditions. First, each off‑campus department must obtain and bill under a standard unique health identifier for health care providers (the statutory reference is to section 1173(b)), and that identifier must be distinct from the identifier used by the parent provider.
Second, the provider must submit an attestation that the department complies with the provider‑based standards in 42 C.F.R. §413.65. Without both elements, the statute bars payment for items and services furnished on or after January 1, 2026.
The bill requires the Secretary of HHS to establish, by notice-and-comment rulemaking within one year of enactment, a process for providers to submit an initial attestation and later attestations, and for the agency to review those attestations. The text explicitly authorizes the Secretary to use site visits, remote audits, or other means the agency deems appropriate to verify compliance.
That places the burden on HHS to design procedures, timeframes, and documentation standards for review and verification.For definition purposes the bill imports the regulatory concept of an "off‑campus outpatient department" from 42 C.F.R. §413.65 (or any successor regulation), specifically excluding locations that are on a provider's defined campus or within the distance criteria used to define campus for remote hospital locations. Finally, the bill instructs the HHS Inspector General to analyze the effectiveness and implementation of the Secretary’s attestation review process and to report findings and recommendations to Congress by January 1, 2030, providing a post‑implementation evaluation of whether the new gatekeeping reduced improper billing or created unintended access or administrative problems.
The Five Things You Need to Know
Medicare payments are barred for services furnished by an off‑campus outpatient department on or after January 1, 2026 unless the department has a separate standard unique health identifier and the provider has submitted required attestations.
A provider must submit an initial provider‑based status attestation covering an off‑campus department during the two‑year period ending on the date the department furnishes the billed items or services.
After the initial attestation, the provider must submit subsequent attestations within the timeframe the Secretary specifies; the Secretary must set up the submission and review process through notice-and-comment rulemaking within one year of enactment.
The Secretary’s review authority explicitly includes site visits, remote audits, and other methods the agency determines appropriate to determine compliance with 42 C.F.R. §413.65 (or any successor regulation).
The HHS Office of Inspector General must analyze the Secretary’s review process and deliver recommendations to Congress by January 1, 2030.
Section-by-Section Breakdown
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Short title — Fair Billing Act
A single line establishes the Act’s short title. This is purely formal but important for citation and future references to the statutory amendments that follow.
Payment prohibition until separate identifier and attestations are in place
This is the core operative amendment: a new paragraph to 1833(t) conditions Medicare payment for services at off‑campus outpatient departments on (1) the department having a standard unique health identifier separate from the parent provider’s identifier and (2) the provider having submitted an initial and a subsequent attestation of provider‑based status. Practically, this converts what many hospitals treated as an internal billing classification into a statutory precondition to payment, with a clear effective date of January 1, 2026 for the payment prohibition.
Secretary must create a notice‑and‑comment process and verification tools
The Secretary is required to issue notice‑and‑comment regulations within one year to establish how attestations will be submitted and reviewed. The provision gives HHS flexibility to validate attestations through site visits, remote audits, or other methods the agency chooses. That language leaves significant design choices to HHS—what documentation suffices, how often site visits occur, how CMS contractors participate, and how appeals or remediation work will be handled.
Adopts existing regulatory campus/distance test
Rather than creating a new statutory definition, the bill points to the existing regulatory definition in 42 C.F.R. §413.65 (or its successor). Practically, that means the longstanding campus and distance tests that have driven prior disputes will be used, but it also imports any ambiguities or pending regulatory changes into the statute’s operational framework. Providers should plan around the current regulatory elements (campus boundaries, distance measurements, and remote locations) while watching for any regulatory updates.
Mandated OIG evaluation of the Secretary’s review process
The bill requires the HHS Inspector General to submit an analysis to Congress by January 1, 2030, evaluating how the Secretary implemented the attestation review process and recommending any corrective steps. That creates a built‑in oversight checkpoint to assess whether the rulemaking and verification tools achieved the statute’s goals or produced unintended consequences, and it may shape follow‑on legislative or administrative action.
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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
- Medicare program/payers — the separate identifier and attestation gate are designed to reduce improper provider‑based billing, improving program integrity and potentially lowering Medicare overpayments.
- Patients and beneficiaries — clearer identification of off‑campus departments can increase billing transparency and reduce surprise bills linked to facility fees that flow from provider‑based classification.
- Independent physician practices and truly independent outpatient centers — by hardening the criteria and verification for provider‑based status, the bill could protect independent facilities from being inappropriately reclassified as provider‑based, preserving their billing structure.
Who Bears the Cost
- Hospitals and health systems with multiple off‑campus locations — they face compliance costs to obtain separate identifiers, prepare evidence for attestations, and undergo potential site visits or audits, and they may see reduced reimbursement if locations lose provider‑based billing.
- Hospital billing and compliance teams — operational burden increases: tracking identifiers, maintaining attestation records, and responding to verification requests will require staff time and potentially new systems.
- Department of Health and Human Services (CMS and OIG) — the agency must design rulemaking, audit procedures, and enforcement resources; the OIG must perform a multi‑year evaluation, creating resourcing implications for federal agencies.
Key Issues
The Core Tension
The central dilemma is between program integrity and administrative burden: the bill seeks to stop inappropriate provider‑based billing and improve transparency, but it does so by imposing new documentation, identifier, and verification requirements that increase compliance costs and could disrupt patient access at marginal off‑campus locations. There is no frictionless way to achieve both goals simultaneously; the implementation approach will determine which side predominates.
The bill imports existing regulatory standards (42 C.F.R. §413.65) into statute rather than replacing them; that saves time but also freezes a dependence on regulatory definitions that may be updated or litigated. If the regulation changes, the statutory cross‑reference could create confusion about which version controls or require subsequent statutory amendment.
The Secretary’s delegated authority to use site visits and remote audits is operationally broad; without precise standards established in rulemaking, providers will face uncertainty about what documentation suffices and how often reviews occur.
Implementation timing creates friction. The payment bar is effective January 1, 2026, but initial attestations can be submitted during a two‑year window ending on the date services are furnished, which raises sequencing questions for departments that open close to the effective date.
Hospitals may need to choose between pausing services at marginal locations or proceeding and risking nonpayment if attestation timing or verification lags. Finally, unless Congress or CMS funds increased oversight, enforcement may be uneven: strong enforcement would deter improper billing but require more HHS resources, while weak enforcement risks formal requirements becoming paperwork without substantive review.
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