To amend title XIX of the Social Security Act to establish a definition of essential health system in statute and for other related purposes.

New rules for hospitals serving low-income patients

This bill would create a statutory label called "essential health system" for certain non‑Federal government or nonprofit hospitals that serve many low‑income patients. A hospital would qualify if, in at least 2 of the 3 most recent fiscal years, it met at least one test: (1) a Medicare disproportionate patient percentage of at least 35 percent; (2) a Medicare DSH uncompensated care payment factor of 0.0005 or more; or (3) a value for (1) or (2) in the top 16th percentile in its state. The Secretary would use data published with the final Medicare inpatient prospective payment system rules for the three most recent fiscal years to check these tests. MACPAC would have to publish an essential health system index and send Congress a list within six months of enactment and then by August 1 each year; the index would show percentile ranks locally (if applicable), by state, and nationally, plus a composite average. An essential health system designation would last five years if the hospital keeps meeting the tests each year, and hospitals would be redesignated every five years under the same rules.