Understanding Section 6225 of CAA 2026
Medicare reimbursement for off-campus hospital outpatient departments faces significant regulatory transformation under new federal requirements. The healthcare landscape is shifting dramatically as hospitals prepare for mandatory compliance measures that will fundamentally alter payment structures and operational frameworks.
Key Compliance Deadlines
Effective January 1, 2028, Section 6225 of the Consolidated Appropriations Act, 2026 (“CAA”) establishes stringent prerequisites for Medicare payment eligibility at off-campus hospital outpatient departments. Healthcare organizations must navigate complex regulatory requirements to maintain uninterrupted reimbursement streams and ensure financial sustainability.
Required Documentation Standards
The legislation mandates two critical conditions for Medicare payment continuation. First, hospitals must submit comprehensive provider-based status attestations demonstrating compliance with federal regulations. Second, each off-campus department requires assignment of a National Provider Identifier (“NPI”) that operates independently from the hospital’s primary NPI registration. These requirements fundamentally reshape how hospitals structure their outpatient operations and billing systems.
Section 6225 amends Section 1833(t) of the Social Security Act, embedding attestation requirements as mandatory conditions of Medicare payment rather than voluntary submissions. This regulatory shift represents a fundamental departure from historical practices and demands proactive strategic planning.
Detailed Section 6225 Requirements
National Provider Identifier Mandates
Healthcare organizations must obtain distinct NPIs for every off-campus outpatient department currently operating under hospital licensure. This administrative undertaking extends beyond simple registration—hospitals must submit comprehensive filings to Medicare, Medicaid, and commercial payers to activate NPIs for billing purposes. The process requires coordination across multiple departments including revenue cycle management, compliance, and information technology teams.
Provider-Based Attestation Timeline
The initial attestation window opens January 1, 2026, and closes December 31, 2027. Hospitals must submit provider-based attestations for each off-campus outpatient department held out and billed as a provider-based component of the hospital system. Failure to submit attestations by the January 1, 2028 deadline triggers immediate cessation of Medicare payments for hospital services furnished at non-compliant off-campus departments, creating substantial financial exposure.
CMS Regulatory Framework Development
Beyond initial submissions, hospitals face ongoing attestation obligations on a periodic basis, potentially every two years. This transforms attestations from voluntary, one-time submissions into mandatory recurring compliance requirements demanding sustained administrative resources and oversight mechanisms.
Section 6225 directs CMS to develop comprehensive regulations establishing standardized processes for attestation submission and review, periodic attestation schedules, and enforcement mechanisms including site visits, audits, payment denials, and overpayment recoupment procedures.
Historical Context and Evolution
Traditional Provider-Based Status Benefits
An attestation of provider-based compliance represents formal certification that hospitals submit to CMS, typically through Medicare Administrative Contractors (MACs), confirming that specific off-campus or on-campus departments satisfy all requirements under 42 CFR § 413.65. This certification establishes that departments function as integrated hospital components rather than independent facilities, enabling hospitals to bill services as hospital-based care.
Recent Payment Differential Changes
Historically, provider-based status commanded higher Medicare reimbursement rates for hospital services. However, recent statutory changes and regulatory guidance have diminished this payment differential, fundamentally altering the financial calculus surrounding provider-based designations.
Previously, attestation submissions remained voluntary for most healthcare organizations. The labor-intensive nature of attestation preparation and heightened regulatory scrutiny discouraged voluntary submissions unless hospitals confronted specific provider-based reimbursement disputes. Similarly, hospitals exercised discretion regarding separate NPI acquisition for off-campus outpatient departments. Section 6225 eliminates this flexibility, mandating universal compliance.
Provider-Based Compliance Requirements
Common Compliance Challenges
Hospitals must immediately conduct comprehensive internal audits verifying that all off-campus departments satisfy provider-based requirements enumerated in 42 CFR § 413.65. Ongoing compliance presents substantial operational challenges across multiple dimensions.
Naming Conventions and Signage: Regulations require provider-based locations be publicly identified as hospital components. Acronyms or health system names without clear hospital affiliation create compliance vulnerabilities.
Governance and Control Structures: Documentation must demonstrate identical governing bodies and direct hospital control over provider-based locations. Nursing staff reporting structures must mirror on-campus departmental hierarchies.
Financial Integration: Comprehensive documentation establishing financial integration between provider-based locations and hospital operations is mandatory for attestation approval.
Documentation and Operational Standards
Modifier Usage: Proper identification of off-campus department status through correct modifier application (PO versus PN designations) is essential for billing accuracy.
Licensure Consistency: State law requirements mandate inclusion of provider-based locations on hospital licenses where applicable.
Beneficiary Disclosures: Medicare beneficiaries must receive properly worded notices explaining they are receiving services at hospital locations, ensuring informed consent and transparency.
Attestation submission initiates multi-stage review processes. CMS and MACs frequently request supplementary information, potentially requiring multiple review cycles. Regulators may mandate substantive operational changes and attestation modifications before granting final approval, extending timelines significantly.
340B Program Considerations
The mandatory attestation requirements carry significant implications for hospital departments registered as 340B program child sites. Non-compliance with attestation requirements potentially triggers removal from 340B eligibility, even for historically registered and compliant child sites. While Section 6225 does not explicitly address 340B consequences, HRSA will likely incorporate attestation compliance into child site eligibility determinations, creating substantial financial stakes beyond Medicare reimbursement.
Strategic Action Steps for Hospitals
Healthcare organizations should monitor forthcoming notice and comment rulemaking establishing definitive attestation procedures and lookback period parameters. Immediate review of provider-based rule compliance and proactive issue resolution is critical. Hospitals must implement corrective action promptly when improvement opportunities emerge.
Development of standardized checklists and operational playbooks for attestation drafting ensures consistency and completeness. NPI applications for each off-campus outpatient location must proceed immediately, accompanied by all federal and state filings and internal system updates enabling NPI-based billing.
Hospitals require robust tracking systems for attestation submissions, mirroring existing Medicare enrollment revalidation processes. Meticulous documentation is paramount—CMS possesses express authorization and dedicated funding for active enforcement activities including comprehensive audits and on-site inspections.
Healthcare legal counsel regularly advises hospitals and health systems on provider-based compliance, attestation submissions, CMS enrollment, and reimbursement matters. Specialized expertise supports cancer center attestations required for new provider-based departments since 2017, appeals of provider-based denials, and overpayment risk mitigation through proactive noncompliance disclosure.
