This bill establishes a statutory definition for essential health system under Medicare. Under the bill, an essential health system is one that (1) is an acute care hospital that is paid under Medicare's inpatient prospective payment system (excluding children’s, inpatient psychiatric, long-term care, rehabilitation hospitals, and certain cancer hospitals); (2) is a non-federal governmental or private nonprofit hospital; and (3) is a Medicaid disproportionate share hospital, has a Medicare disproportionate patient percentage of at least 35%, or has a Medicare disproportionate share hospital uncompensated care payment factor of 0.0005 or more.