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

This bill proposes to amend Title XIX of the Social Security Act by establishing a statutory definition for an "essential health system" . These systems are defined as non-Federal governmental or private nonprofit hospitals that meet specific criteria demonstrating a high volume of care provided to Medicaid and other low-income patients. To qualify, a hospital must meet one of three criteria in at least two of the three most recent fiscal years: a Medicare disproportionate patient percentage of at least 35 percent, a Medicare disproportionate share hospital uncompensated care payment factor of 0.0005 or more, or a top 16th percentile ranking for these criteria within its state. Once designated, this status is effective for a five-year period, subject to redesignation. The legislation further mandates the Medicaid and CHIP Payment and Access Commission (MACPAC) to play a crucial role in identifying and tracking these systems. MACPAC will be required to prepare and submit an annual list of essential health systems to Congress, including newly designated hospitals and those designated in previous years. Additionally, MACPAC must establish and publish an "essential health system index value" for all subsection (d) hospitals, computing each hospital's percentile ranking based on its low-income patient care measures compared to peers in its region and nationally. The bill also adds payment policies utilizing these criteria to MACPAC's agenda, aiming to provide targeted support for essential health systems and ensure access to their vital community services.