H.R. 8163

Provider Reimbursement Stability Act of 2026

Sponsor: Gregory F. Murphy

89 cosponsors
Follow this bill

Official summary

Written by the Congressional Research Service.

Provider Reimbursement Stability Act of 2026

This bill allows for larger annual adjustments to the Medicare physician fee schedule. It also requires the Centers for Medicare & Medicaid Services (CMS) to make certain corrections to compensate for expenditures under the fee schedule that exceed a certain amount in a given year, and it limits how much certain adjustment factors may vary each year.

Current law prohibits annual adjustments to the Medicare physician fee schedule that would result in a more than $20 million difference between the adjusted amount and the non-adjusted amount of total expenditures. The bill increases this threshold to $54.3 million beginning in 2027, with adjustments for inflation every five years beginning in 2032.

Additionally, for certain services, the bill requires the CMS to determine the difference between expenditures based on estimated utilization of the service and expenditures based on actual utilization. If this difference exceeds a certain percentage of total expenditures under the fee schedule, the CMS must reconcile this difference by adjusting payments for the following year. This requirement applies to services for which payment was bundled with another service and there was a separate or add-on payment during the previous year.

Finally, the CMS must update the prices and rates of each category of direct costs that affect payments (e.g., prices of equipment) at least every five years, with updates made to each category in the same year. The bill also prohibits the CMS from varying a certain adjustment factor by more than 2.5% each year.

Text of the bill

Expand all
Sec. 3. Budget neutrality corrections relating to estimated utilization

(a) In general. Section 1848(c)(2)(B) of the Social Security Act (42 U.S.C. 1395w–4(c)(2)(B)) is amended by adding at the end the following new clause:

Text this section adds to the law

(vii) Budget neutrality corrections relating to estimated utilization

(I) In general. In the case of a budget neutrality adjustment applied pursuant to clause (ii)(II) for a year (beginning with 2027) that is determined in part using estimated utilization (as defined in subclause (II)(bb)) with respect to a specified service (as defined in subclause (II)(cc)), the Secretary shall, as part of the final rule establishing the physician fee schedule under this section for the assumption correction period (as defined in subclause (II)(aa)) with respect to such year—

(aa) determine the difference between expenditures for such service in such year using estimated utilization and actual utilization for such service (in a manner determined appropriate by the Secretary); and

(bb) in the case that the Secretary determines the difference described in item (aa) is greater than the threshold amount (as defined in subclause (II)(dd)) for such year, adjust the conversion factor under this section for such assumption correction period by such amount to reconcile such difference (which may be positive or negative), as determined by the Secretary.

(II) Definitions. For purposes of this clause:

(aa) Assumption correction period. The term assumption correction period means, with respect to a year, the second year beginning after such year.

(bb) Estimated utilization. The term estimated utilization means an estimate of utilization used for purposes of applying clause (ii)(II).

(cc) Specified service. The term specified service means, with respect to a year, a service—

(AA) with expected expenditures for such year under this part based on estimated utilization that exceed the threshold amount (as defined in item (dd)) for such year; and

(BB) for which payment had been bundled into payment for another service during the preceding year and for which a separate payment or add-on payment is made during such year.

(dd) Threshold amount. The term threshold amount means, with respect to a year, 0.1 percent of the total estimated expenditures under this part for services furnished under this section during such year.

(b) Nonapplication of budget neutrality to reconciliation adjustments. Section 1848(c)(2)(B) of the Social Security Act (42 U.S.C. 1395w–4(c)(2)(B)) is amended—

(1) in clause (iv)—

(A) in subclause (V), by striking and at the end;

(B) in subclause (VI), by striking the period and inserting ; and; and

(C) by adding at the end the following new subclause:

Text this section adds to the law

(VII) clause (vii)(I)(bb) for an assumption correction period (as defined in clause (vii)(II)) shall not be taken into account in applying clause (ii)(II) with respect to such period.

; and

(2) in clause (v), by adding at the end the following new subclause:

Text this section adds to the law

(XII) Reductions attributable to an assumption correction. For an assumption correction period (as defined in clause (vii)(II)), reduced expenditures attributable to application of clause (vii)(I)(bb) with respect to such period.