Congress guarantees Alaska and Hawaii hospitals 94% cost reimbursement

What it does

This bill amends Medicare's hospital outpatient payment rules to guarantee that sole community hospitals in Alaska and Hawaii receive at least 94% of their reasonable costs for outpatient services. If Medicare's standard payment formula would pay them less, the bill requires the Secretary of Health and Human Services to increase the payment to reach that 94% floor. The increase is not subject to budget-neutrality requirements, meaning it adds to overall Medicare spending rather than offsetting costs elsewhere.

Why we flagged it

The bill's operative mechanism is a straightforward payment guarantee for a specific class of hospitals in two states. It is a targeted reimbursement adjustment, not a broader policy reform or deregulation.

What the text implies

• The 94% floor applies only to Alaska and Hawaii, creating a geographic carve-out that may invite similar demands from other rural states or regions with sole community hospitals.
• Exemption from budget-neutrality requirements means this payment increase is not offset by reductions elsewhere in the outpatient payment system, adding to net Medicare expenditure.
• The bill does not specify how the Secretary will fund the increased payments or whether they will be absorbed through general Medicare revenue or other mechanisms.
• Sole community hospitals in other states with similar geographic isolation or financial vulnerability are not covered, potentially creating equity questions about why Alaska and Hawaii receive preferential treatment.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Rural and remote patients in Alaska and Hawaii gain improved access to emergency outpatient services by ensuring hospitals remain financially viable in underserved markets. However, the bill increases Medicare spending without offsetting reductions, which may pressure overall program finances and indirectly affect beneficiary cost-sharing or provider payment rates elsewhere.

Who stands to gain

• sole community hospitals in Alaska and Hawaii

Named in the bill

Department of Health and Human Services, Centers for Medicare & Medicaid Services, sole community hospitals, Alaska, Hawaii, Medicare

Where it stands

2 cosponsors: 2 Democrats.

• Jun 30, 2025 — Introduced · Congress.gov: “Introduced in House”
• Jun 30, 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.