Section 1 Short title
This Act may be cited as the “Stopping Medicare Abuses to Restore Trust in Health Care Act” or the “SMART Health Care Act”.
Stopping Medicare Abuses to Restore Trust in Health Care Act
A BILL
To amend title XVIII of the Social Security Act to improve risk adjustment under Medicare Advantage, and for other purposes.
Sec. 2 Improving risk adjustment under Medicare Advantage
Section 1853(a)(3)(C)(iii) of the Social Security Act (42 U.S.C. 1395w–23(a)(3)(C)(iii)) is amended—
by striking “methodology.—Such risk” and inserting
“(I) In general—Subject to subclause (II), such risk”
by adding at the end the following new subclauses:
“(II) Use of health status data—For 2026 and each subsequent year, the Secretary shall use 2 years of diagnostic data (when available) under such risk adjustment methodology.”
Sec. 3 Promoting Medicare site-neutral payments
by redesignating subparagraph (E) as subparagraph (F); and
by inserting after subparagraph (D) the following new subparagraphs:
“(E) Sunset of certain exceptions—The provisions of clauses (ii) and (iv) of subparagraph (B) shall not apply with respect to applicable items and services furnished on or after January 1, 2026.”
On-Campus outpatient departments— Section 1833(t) of the Social Security Act is amended—
in paragraph (1)(B)—
in cause (iv), by striking “and” at the end;
in cause (v), by striking the period at the end and inserting “; and”; and
by inserting at the end the following new clause:
“(vi) does not include applicable items and services (as defined in subparagraph (A) of paragraph (23)); and”
by adding at the end the following new paragraph:
“(23) Services furnished by an on-campus outpatient department of a provider
“(A) Applicable items and services—For purposes of paragraph (1)(B)(v) and this paragraph, the term applicable items and services means items and services other than items and services furnished by a dedicated emergency department (as defined in section 489.24(b) of title 42 of the Code of Federal Regulations).
“(B) On-campus outpatient department of a provider
“(i) In general—On-campus outpatient department of a provider—
“(I) on the campus (as defined in such section 413.65(a)(2) of title 42, Code of Federal Regulations) of such provider; or
“(II) within the distance (described in such definition of campus) from a remote location of a hospital facility (as defined in such section 413.65(a)(2) of title 42, Code of Federal Regulations).
“(ii) Exception for certain hospitals located in rural or medically underserved areas—For purposes of paragraph (1)(B)(vi) and this paragraph with respect to applicable items and services, the term on-campus outpatient department of a provider shall not include a department of a provider (as so defined) if the provider is:
“(I) A critical access hospital (as defined in section 1861(mm)(1)).
“(II) A sole community hospital (as defined in section 1886(d)(5)(D)(iii)).
“(III) A Medicare-dependent, small rural hospital (as defined in section 1886(d)(5)(G)(iv)).
“(IV) Any other hospital that is located in a rural area (as defined in section 1886(d)(2)(D)).
“(C) Availability of payment under other payment systems—With respect to items and services furnished in an on-campus provider-based department, payment under this section for such items and services shall be the amount determined under the fee schedule under section 1848 for such items and services furnished if furnished in a physician office setting.”
Sec. 4 Increasing Medicare access for rural communities by physician-owned hospitals
Section 1877(d) of the Social Security Act (42 U.S.C. 1395nn(d)) is amended by striking paragraph (2) and inserting the following:
“(2) Rural providers—In the case of designated health services furnished in a rural area (as defined in section 1886(d)(2)(D)) by an entity, if substantially all of the designated health services furnished by the entity are furnished to individuals residing in such a rural area.”
Sec. 5 Making drugs more affordable for medicare patients
Section 340B(a)(5) of the Public Health Service Act (42 U.S.C. 256b(a)(5)) is amended—
in subparagraph (C), by striking “subparagraphs (A) or (B)” and inserting “subparagraph (A), (B), or (E)”;
in subparagraph (D), by striking “subparagraphs (A) or (B)” and inserting “subparagraph (A), (B), or (E)”; and
by adding at the end the following:
“(E) Requirement to provide drug discounts to patients
“(i) In general—A covered entity shall ensure that each patient who receives a covered outpatient drug from such covered entity is provided such drug at a price that does not exceed the price at which the covered entity purchased the drug in accordance with paragraph (1), less any additional discounts or rebates received by the covered entity with respect to the drug.
“(ii) Establishment of mechanism—The Secretary shall establish a mechanism—
“(I) ensure that covered entities comply with clause (i);
“(II) adjust reimbursement rates for covered entities for certain outpatient prescription drugs provided by hospitals to Medicare patients under section 1395l(t)(14)(A)(iii); and
“(III) report the total amount paid and the total amount received for covered outpatient drugs under this subsection.
“(iii) Public reporting—The Secretary shall make the information reported under subclause (ii)(III) publicly available.”
Sec. 6 Improving quality of care at the skilled nursing facilities
Section 1888(e)(6) of the Social Security Act (42 U.S.C. 1395yy(e)(6)) is amended by inserting “(or, with respect to fiscal year 2025 or a subsequent fiscal year, by between 2 and 5 percentage points (as determined appropriate by the Secretary))” after “2 percentage points”.