HR-9642-119
Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 41 - 0.
Sponsored by John Moolenaar (R-MI)
What it does
This bill would change how Medicare pays for anesthesia services delivered by anesthesiologists at qualifying small rural hospitals and critical access hospitals — from the standard physician fee schedule (Part B) to a reasonable-cost basis under Medicare Part A. Eligibility is limited to facilities that already employ or contract with no more than one full-time-equivalent anesthesiologist, had no more than 800 annual anesthesia-requiring procedures in 2026, and where the anesthesiologist agrees not to separately bill Part B. The Department of Health and Human Services would be required to revise its regulations to implement this reclassification starting with cost reporting periods beginning about one year after enactment.
Who benefits
Small rural hospitals and critical access hospitals that meet the low-volume threshold, which would gain a potentially more stable, cost-based Medicare payment stream for anesthesia services rather than fee-schedule reimbursement. Anesthesiologists at these facilities may benefit from more predictable hospital-based compensation. Rural patients could benefit indirectly if the payment change helps these hospitals retain surgical and anesthesia capacity that might otherwise be at risk of closure.
Who is hurt
The Medicare Part A trust fund and federal taxpayers could bear increased costs if reasonable-cost reimbursement exceeds what Part B fee-schedule payments would have been. Anesthesiologists at these facilities lose the option to bill Part B directly for their own professional services, tying their compensation to hospital cost reporting instead. Larger rural hospitals and urban facilities that exceed the 800-procedure threshold, or already employ more than one full-time anesthesiologist, would not qualify and could see a competitive disparity in reimbursement methodology relative to qualifying small facilities.
Supporters argue
Supporters argue that small rural and critical access hospitals often struggle to recruit and retain anesthesiologists because Part B fee-schedule payments do not reliably cover the fixed costs of maintaining even one anesthesiologist for a low volume of procedures, threatening surgical service closures. They contend that reasonable-cost reimbursement, already used for other hospital-based services, would better match payment to the actual cost structure of low-volume rural anesthesia practices and help preserve access to surgery and obstetric care in underserved areas.
Opponents argue
Opponents argue that shifting payment to a reasonable-cost basis removes competitive pressure to control costs, since hospitals would be reimbursed for whatever costs they report rather than a fixed, market-tested fee schedule rate, potentially increasing Medicare spending without a guaranteed improvement in access. They contend that narrowly targeting only single-anesthesiologist, sub-800-procedure facilities creates an arbitrary threshold that could produce inconsistent treatment of similarly situated rural hospitals and invite gaming of the volume cap to preserve eligibility.
Constitutional context
This bill involves Congress's spending power under the Taxing and Spending Clause (Article I, Section 8) to set conditions and methods for Medicare reimbursement, an area where Congress has broad discretion to structure payment systems. It does not raise a significant separation-of-powers or individual-rights question, since it modifies an existing statutory payment formula rather than compelling private conduct or conditioning state funding coercively.
Checks and balances
Congress would set the statutory payment rule directly, while HHS is directed to implement it through regulation, leaving the agency limited discretion (e.g., defining "such higher number" for the procedure cap) subject to post-Loper Bright judicial review of that interpretation.
Historical precedent
Congress has previously created specialized reasonable-cost or cost-based payment pathways for other rural and critical access hospital services under Medicare, reflecting a recurring legislative approach to addressing rural healthcare access gaps.