HR-8684-119
Placed on the Union Calendar, Calendar No. 652.
Sponsored by Virginia Foxx (R-NC)
What it does
This bill would amend the Employee Retirement Income Security Act of 1974 (ERISA) to require hospitals to obtain and include a unique identifier for each off-campus outpatient department when submitting claims to employer-sponsored group health plans or group health insurers. Group health plans and insurers would be prohibited from paying claims that lack this identifier. Hospitals that violate the requirement would face civil monetary penalties of up to $300 per day (facilities with 30 or fewer beds) or $5,500 per day (facilities with more than 30 beds), with the Secretary of Labor directed to implement the rules through rulemaking and establish a process for reporting suspected violations within one year.
Who benefits
Employers and employer-sponsored health plan sponsors who would gain clearer visibility into where services are actually delivered, potentially enabling better cost management. Employees and their dependents enrolled in group health plans who may benefit from reduced billing errors and more accurate cost-sharing calculations. Health insurers offering group coverage who would have a clearer basis for adjudicating claims. Smaller, independent outpatient clinics that do not use hospital billing codes and may currently be at a competitive disadvantage. Federal and state fraud investigators who would have a cleaner data trail for identifying billing irregularities.
Who is hurt
Hospitals — particularly large health systems — that operate numerous off-campus outpatient departments and currently bill for those services under the main hospital's identifier, which often commands higher reimbursement rates. Hospital administrators and billing departments that would face compliance costs to obtain new identifiers and update billing systems. Patients at off-campus facilities who could face care disruptions if their hospital is penalized or delays compliance. Rural and small hospitals (30 or fewer beds) that may have limited administrative capacity to implement new billing requirements, even at the lower penalty tier.
Supporters argue
Supporters argue that hospitals routinely acquire off-campus physician offices and outpatient clinics and then bill for services at higher hospital facility rates — a practice sometimes called "site-neutral billing arbitrage" — even though the care delivered is identical to what independent clinics provide. They contend that requiring a unique location identifier for each off-campus department would make this pricing disparity visible to payers and patients, enabling group health plans to apply accurate reimbursement rates and reducing what they describe as billions of dollars in excess costs passed on to employers and workers through higher premiums and cost-sharing.
Opponents argue
Opponents argue that hospitals acquire off-campus outpatient departments in part to cross-subsidize money-losing services — such as trauma care, psychiatric units, and rural emergency departments — that independent clinics do not provide, and that forcing transparent location-based billing could accelerate hospital consolidation or closure of those departments. They contend that the compliance burden, particularly the daily penalty structure, is disproportionate for smaller hospitals with limited billing infrastructure, and that the rulemaking delegation to the Secretary of Labor may produce inconsistent standards given the post-Loper Bright requirement for courts to independently assess whether agency interpretations stay within the statute's bounds.
Constitutional context
Congress regulates employer-sponsored health plans under ERISA through the Commerce Clause (Art. I, §8, cl. 3) and the Necessary and Proper Clause (Art. I, §8, cl. 18). The bill's delegation of rulemaking to the Secretary of Labor is subject to heightened judicial scrutiny following Loper Bright v. Raimondo (2024), which eliminated automatic deference to agency interpretations and requires courts to independently assess whether the agency's rules stay within the statutory authority Congress actually granted.
Checks and balances
Congress sets the billing and identifier requirements through statute; the Secretary of Labor gains rulemaking and civil penalty enforcement authority; courts retain independent review of agency rules under the post-Loper Bright standard, and hospitals may challenge penalties through ERISA's existing administrative and judicial review processes.
Historical precedent
The Centers for Medicare & Medicaid Services has implemented site-neutral payment policies for Medicare since 2019, reducing reimbursement for certain off-campus outpatient departments to match physician office rates — a policy that was challenged in American Hospital Association v. Azar (D.C. Cir. 2020), where the court upheld CMS's authority to set equal rates for equivalent services.