Medicare to reimburse hospitals for education costs—including from parent companies
S. 1087 — Rebuild America’s Health Care Schools Act of 2025 · Filed by Amy Klobuchar (D-MN) · 1 cosponsor · Introduced Mar 14, 2025 · Referred to committee
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What it does
This bill expands what hospitals can charge Medicare for nursing and allied health education programs. It allows hospitals to count as reimbursable costs not just direct training expenses, but also indirect costs, shared administrative services, and costs allocated from related entities (like parent companies or sister organizations). It also requires Medicare to refund any amounts it previously denied for these types of costs over the past six years.
Why we flagged it
The bill's core function is to broaden what Medicare reimburses as allowable costs for hospital-based nursing and allied health education, including indirect and allocated costs from related entities. This is a targeted reimbursement rule change benefiting hospital systems, not a public health or education initiative.
What the text implies
- The 'related entity' definition is broad and circular, allowing hospitals to allocate costs from parent companies, sister organizations, and shared service centers—potentially inflating education cost claims without direct scrutiny of what those costs actually represent.
- The six-year refund provision creates a retroactive windfall: Medicare must repay hospitals for previously denied costs, even though those denials reflected prior policy judgments about what constituted reasonable education expenses.
The full analysis lists 5 implications of this text.
Who stands to gain
for-profit hospital systems (UHS, HCA, Tenet); hospital-based nursing schools; health system parent companies and related entities