This bill establishes a new category of hospitals under Medicare called "territorial safety net hospitals" that includes hospitals in the Northern Mariana Islands, American Samoa, Guam, and the Virgin Islands. These hospitals would receive special payment rates of 101 percent of their reasonable costs for inpatient services and either 101 percent of reasonable costs or a hybrid payment model (101 percent facility costs plus 115 percent for professional services) for outpatient services, providing them with higher reimbursement than standard Medicare rates. The legislation also exempts territorial safety net hospitals from Medicare sequestration (automatic budget cuts) and allows them to participate in the 340B drug discount program. Additionally, the bill includes provisions to ensure these hospitals can recover bad debt costs and receive appropriate reimbursement for emergency room on-call providers. The changes would take effect 60 days after the bill is enacted, affecting healthcare delivery and financing in U.S. territories.
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