Congress closes hospital billing loophole that inflates Medicare costs

What it does

This bill prevents hospitals from overbilling Medicare and private insurance by requiring off-campus hospital outpatient departments to bill under their own separate identifier rather than under the main hospital's identifier. Starting January 1, 2026, off-campus departments must use unique billing codes and submit claims on standard forms, preventing them from being billed at higher hospital rates when they should be billed at lower outpatient rates.

Why we flagged it

The bill's core function is to prevent hospitals from exploiting a billing loophole by charging higher rates for off-campus services. It is a cost-containment and billing-integrity measure, not a subsidy or deregulation.

What the text implies

• Hospitals may face revenue pressure if off-campus departments have been systematically overbilling; this could reduce hospital profitability and potentially affect capital investment in outpatient expansion.
• The requirement for separate NPIs and billing identifiers will impose compliance costs on hospital billing systems and administrative infrastructure, particularly for large health systems with multiple off-campus locations.
• Private insurers gain enforcement authority through the NAIC model regulation, potentially shifting some billing-dispute resolution power away from hospitals and toward insurers.
• The bill does not specify penalties for non-compliance, creating potential enforcement ambiguity and possible loopholes if CMS lacks resources to audit billing practices.

Who it affects

Ordinary people benefit through lower out-of-pocket costs and reduced insurance premiums, as the bill closes a billing loophole that allows hospitals to charge hospital-level rates for services delivered at off-campus locations that should be billed at lower outpatient rates. Medicare and private insurers will pay less for the same services, reducing overall healthcare spending.

Who stands to gain

• Medicare (federal program)
• Private health insurers
• Self-insured employers
• Patients (through lower out-of-pocket costs and premiums)

Named in the bill

Medicare, CMS (Centers for Medicare & Medicaid Services), HHS (Department of Health and Human Services), NAIC (National Association of Insurance Commissioners), Off-campus outpatient departments, Health insurance issuers, Group health plans, Colorado House Bill 18-1282

Where it stands

• Apr 24, 2025 — Introduced · Congress.gov: “Introduced in House”
• Apr 24, 2025 — Referred to House Committee on Ways and Means and House Committee on Energy and Commerce · Congress.gov: “Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a…”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 2 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $40,000 in lobbying spend. A filing names 16 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

Victoria Spartz, the sponsor, reported $117,000 in PAC receipts in the 2026 cycle.

• Chartercare Health of Ri (forrmerly Known As Chartercare Health Partners) — $40,000 on 2 filings

Lobbying Disclosure Act filings through Jul 23, 2026. A filing shows who paid to lobby on a bill it names, not what changed.