Congress’s fiscal year 2026 health care appropriations bill introduces a significant new statutory condition of Medicare payment for off-campus hospital outpatient departments. If enacted, effective January 1, 2028, Medicare payment would be prohibited for items and services furnished by an off-campus hospital outpatient department unless two conditions are met: (1) the department has a National Provider Identifier (“NPI”) that is separate from the hospital’s main NPI; and (2) the hospital has submitted the required provider-based status attestation.
Although framed as an administrative billing requirement, Section 6225 creates a direct payment consequence for noncompliance and will require operational, enrollment and compliance planning by hospitals with off-campus outpatient departments, including grandfathered locations.
After passing the House with broad bipartisan support on January 22, 2026, the health care appropriations bill is currently stalled in the Senate due to disputes over Department of Homeland Security funding. The health care provisions, however, including the new off-campus requirements, are expected to advance without substantive changes—though the exact timing remains fluid.
Background: Provider-Based Status and NPIs Background
Medicare permits hospitals to bill outpatient services furnished at certain locations as hospital services if the location satisfies CMS’s provider-based requirements under 42 C.F.R. § 413.65 addressing licensure, financial integration, clinical integration and public awareness.
Historically, provider-based status and related enrollment requirements have been governed by CMS regulation and guidance. The new legislation would place these requirements directly into the Medicare statute and conditions payment on compliance. In addition, hospitals are currently given the option by the Medicare Program to obtain separate NPIs by location or use the same NPI across all locations. The second option of using the same NPI would no longer be available under this new legislation.
Statutory Requirements for Off-Campus Outpatient Departments
Section 6225 of the appropriations bill would amend Section 1833(t) of the Social Security Act by adding a new section establishing payment conditions for off-campus outpatient departments. Under the revised statute, no Medicare payment would be made for items and services furnished on or after January 1, 2028, unless all of the following conditions are met:
- The hospital obtains a separate NPI for the off-campus outpatient department that is distinct from the NPI of the main hospital or other provider.
- The hospital submits an initial provider-based status attestation to the Secretary confirming compliance with 42 C.F.R. § 413.65. Crucially, the statute requires this attestation be submitted during the two-year period ending on the date the service is furnished. This timing seems to create a mandatory “look-back” validity period, meaning hospitals cannot rely on legacy attestations and must instead submit new attestations within the two-year window preceding the January 1, 2028, effective date.
- After submitting an initial attestation, the hospital will be required to submit subsequent attestations based on timeframes established by CMS.
The proposed legislation directs the Secretary to establish, through notice-and-comment rulemaking, a process for submitting and reviewing both initial and subsequent attestations. Further, CMS would also be authorized to conduct reviews through site visits, remote audits, or other means to confirm compliance. The bill would appropriate $20 million in program management funding to support implementation of these requirements.
Practical Takeaways for Hospitals
If the bill is enacted, hospitals with off-campus outpatient departments should begin preparing for these requirements well in advance of the January 1, 2028, effective date. Key considerations include:
- Inventory Off-Campus Locations. Hospitals should identify all locations that meet the statutory definition of an off-campus outpatient department and confirm how services provided at those locations are currently enrolled and billed. Note that this requirement applies to ALL off-campus locations, including “excepted” (grandfathered) departments that have historically billed under the main hospital’s NPI.
- NPI Enrollment. Hospitals should evaluate whether each off-campus department has its own NPI and, if not, plan for NPI enrollment and associated billing and systems changes.
- Verify Provider-Based Compliance. Hospitals should confirm that each off-campus department continues to meet the provider-based requirements in practice, including operational and documentation standards.
- Develop Attestation Tracking. Hospitals should develop processes to track initial and subsequent provider-based attestations to ensure they are timely submitted within the statutory look-back period.
- Assess Billing and Audit Risk. Because the legislation would condition Medicare payment on compliance, failure to meet these requirements may result in denied claims, reclassification of services, or retrospective payment recoupment following CMS or Medicare Administrative Contractor review.
- Plan for New Sites. Hospitals planning future off-campus departments should incorporate NPI enrollment and provider-based attestation timelines into project planning and development workflows.
Looking Ahead
Section 6225 reflects congressional intent to impose statutory guardrails on provider-based billing for off-campus outpatient departments and to make compliance with NPI and provider-based attestation requirements an express condition of Medicare payment.
CMS is required to issue a rulemaking to implement the attestation submission and review process. We will continue to monitor CMS guidance and regulatory developments.
If you have questions regarding off-campus department compliance or NPI enrollment strategies, please contact:
- Joseph Krause at (414) 721-0906 or jkrause@hallrender.com;
- Benjamin Fee at (720) 282-2030 or bfee@hallrender.com;
- Lori Wink at (414) 721-0456 or lwink@hallrender.com;
- John Williams III at (202) 370-9585 or jwilliams@hallrender.com;
- Abigail Kaericher at (202) 742-9674 or akaericher@hallrender.com;
- Raminta Kizyte at (303) 557-2112 or rkizyte@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
