I
119th CONGRESS
2d Session
H. R. 10729
IN THE HOUSE OF REPRESENTATIVES
October 5, 2026
Ms. Davids of Kansas introduced the following bill; which was referred to the Committee on Energy and Commerce
A BILL
To amend Public Law 119–21 to adjust limitations on State directed payments under the Medicaid program, and to repeal certain provisions related to provider taxes.
Short title
This Act may be cited as the Long-Term Rural Health Investment Act of 2026
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Adjusting limitations on State directed payments
In general
Section 71116 of Public Law 119–21 is amended—
by amending subsection (a) to read as follows:
In general
The Secretary of Health and Human Services (in this section referred to as the Secretary) shall revise section 438.6(c)(2)(iii) of title 42, Code of Federal Regulations (or a successor regulation), such that, with respect to a payment described in such subsection made for a service furnished during a rating period beginning on or after January 1, 2030, the total payment rate for such service is limited to 200 percent of the specified total published Medicare payment rate (or, in the absence of a specified total published Medicare payment rate, the average commercial rate in the State).
;
by amending subsection (b) to read as follows:
Grandfathering certain payments
In the case of a payment described in section 438.6(c)(2)(iii) of title 42, Code of Federal Regulations (or a successor regulation), for which written prior approval (or a good faith effort to receive such approval, as determined by the Secretary) was made before July 1, 2028, for the first rating period occurring after July 1, 2028, or a payment so described for such rating period for which a completed preprint was submitted to the Secretary prior to the date of enactment of the Long-Term Rural Health Investment Act of 2026, beginning with the rating period on or after January 1, 2030, the total amount of such payment shall be reduced by 10 percent of the amount of any such payment made during the preceding rating period, each year until the total payment rate for such service is equal to the rate for such service specified in subsection (a).
;
by striking subsection (c);
in subsection (d)—
by striking paragraph (2);
by redesignating paragraphs (3) through (5) as paragraphs (2) through (4), respectively; and
by adding at the end the following new paragraphs:
Final capitation rate
The term final capitation rate has the meaning given such term in section 438.3(c) of title 42, Code of Federal Regulations (or a successor regulation).
Medicaid managed care organization
The term medicaid managed care organization has the meaning given such term in section 1903(m)(1)(A) of the Social Security Act (42 U.S.C. 1396b(m)(1)(A)).
Prepaid inpatient health plan
The term prepaid inpatient health plan has the meaning given such term in section 438.2 of title 42, Code of Federal Regulations (or a successor regulation).
Prepaid ambulatory health plan
The term prepaid ambulatory health plan has the meaning given such term in section 438.2 of title 42, Code of Federal Regulations (or a successor regulation).
; and
by inserting after subsection (b) the following new subsection:
Historical utilization and separate payment rates
The Secretary shall—
revise section 438.6(c)(2)(vii)(B) of title 42, Code of Federal Regulations (or a successor regulation), such that, with respect to a payment described in section 438.6(c)(2)(iii) of title 42, Code of Federal Regulations (or a successor regulation), made for services furnished during a rating period beginning on or after January 1, 2028, a State may condition such payment on the utilization and delivery of services outside of the rating period for which the State is seeking written prior approval and require that such payments be reconciled to utilization during such rating period; and
revise section 438.6(c)(6) of title 42, Code of Federal Regulations (or a successor regulation), such that, with respect to a payment described in section 438.6(c)(2)(iii) of title 42, Code of Federal Regulations (or a successor regulation), made for services furnished during a rating period beginning on or after January 1, 2028, a State may withhold a portion of the final capitation rate to pay a medicaid managed care organization, prepaid inpatient health plan, or prepaid ambulatory health plan separately for such payment and may require such an organization or plan to retain a portion of the final capitation rate separately to comply with such payment.
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State directed payment reporting requirements
Section 1903 of the Social Security Act (42 U.S.C. 1396b) is amended by adding at the end the following new subsection:
State directed payment reporting requirements
Collection and availability of State directed payment data
In general
Beginning January 1, 2027, each State shall, not later than 1 year after the end of each rating period, submit to the Secretary through the Transformed Medicaid Statistical Information System (T–MSIS) (or a successor system) the data described in subparagraph (B), as a requirement for a State plan or State plan amendment that would provide for a State directed payment.
Data described
For purposes of subparagraph (A), the data described in this subparagraph is the following:
The total amount (in dollars) expended by a managed care organization, prepaid inpatient health plan, or prepaid ambulatory health plan for State directed payments during such rating period.
Identifiers, as specified by the Secretary, for enrollees, providers, managed care organizations, prepaid inpatient health plans, and prepaid ambulatory health plans.
Amounts paid to individual providers under a State directed payment.
Amounts collected by the State to fund the non-Federal share of State directed payments, disaggregated by provider type.
Procedure and diagnosis codes for any item or service for which a State directed payment was made.
Amounts allowed, billed, and paid (including the amount that represents the payment amount negotiated by the relevant managed care organization, prepaid inpatient health plan, or prepaid ambulatory health plan, the amount of the State directed payment, and any other amounts included in the total amount paid to the provider) in connection with an item or service for which a State directed payment was made.
Definitions
In this subsection:
Medicaid managed care organization
The term medicaid managed care organization has the meaning given such term in section 1903(m)(1)(A).
Prepaid inpatient health plan
The term prepaid inpatient health plan has the meaning given such term in section 438.2 of title 42, Code of Federal Regulations (or a successor regulation).
Prepaid ambulatory health plan
The term prepaid ambulatory health plan has the meaning given such term in section 438.2 of title 42, Code of Federal Regulations (or a successor regulation).
Rating period
The term rating period has the meaning given such term in section 438.2 of title 42, Code of Federal Regulations (or a successor regulation).
State directed payment
The term State directed payment means a payment described in section 438.6(c)(2)(iii) of title 42, Code of Federal Regulations (or a successor regulation).
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Reverting regulations
For the period beginning on the date of enactment of this section and ending on January 1, 2030, the Secretary shall apply section 438.6(c)(2)(iii) of title 42, Code of Federal Regulations, as such section was in effect on the day before the date of enactment of Public Law 119–21.
Repeal of provisions of Public Law 119–21 related to provider taxes
Repeal
Sections 71115 and 71117 of Public Law 119–21 are repealed and section 1903(w) of the Social Security Act (42 U.S.C. 1396b(w)) shall be applied as if such sections had not been enacted.
Rescission
The amounts appropriated under section 71115(c) of Public Law 119–21 are hereby rescinded.