I 
119TH CONGRESS 
2D SESSION 
H. R. 7145 
To amend title XIX of the Social Security Act to establish a definition 
of essential health system in statute and for other related purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 16, 2026 
Mrs. TRAHAN (for herself, Mr. VALADAO, Mr. CISCOMANI, Mr. CARTER of 
Louisiana, Mr. VEASEY, and Mr. SOTO) introduced the following bill; 
which was referred to the Committee on Energy and Commerce 
A BILL 
To amend title XIX of the Social Security Act to establish 
a definition of essential health system in statute and 
for other related purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. ESTABLISHING A DEFINITION OF ESSENTIAL 
HEALTH SYSTEM IN STATUTE. 
(a)(1) IN GENERAL.—Section 1905 of the Social Se-
curity Act (42 U.S.C. 1396d) is amended by adding at 
the end the following new subsection: 
‘‘(ll) ESSENTIAL HEALTH SYSTEM.—The term ‘es-
sential health system’ means a hospital— 
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‘‘(1)(A) that is a subsection (d) hospital (as de-
fined in section 1886(d)(1)(B)); 
‘‘(B) that is a non-Federal governmental or pri-
vate nonprofit hospital; and 
‘‘(C) that met one of the following three criteria 
in at least two of the three most recent fiscal years, 
demonstrating the hospital provides a high-volume of 
care to Medicaid and other low-income patients: 
‘‘(i) MEDICAID
AND
LOW-INCOME
MEDI-
CARE CRITERIA.— 
‘‘(I) The hospital had a Medicare dis-
proportionate patient percentage of at least 
percent 
(as 
defined 
in 
section 
1886(d)(5)(F)(vi)). 
‘‘(ii) UNCOMPENSATED CARE CRITERIA.— 
‘‘(I) The hospital had a Medicare dis-
proportionate share hospital uncompen-
sated care payment factor of 0.0005 or 
more (as defined in section 1886(r)(2)(C)). 
‘‘(iii) STATE-ADJUSTED LOW-INCOME CARE 
CRITERIA.— 
‘‘(I) The hospital had a value for the 
criteria described in clause (i) or clause (ii) 
that is in the top 16th percentile for sub-
section (d) hospitals (as defined in section 
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1886(d)(1)(B)) in the state in which it is 
located. 
In determining whether a hospital meets at 
least one of the criteria specified in subpara-
graph (C), the Secretary shall utilize data pub-
lished with the final rules revising the Medicare 
inpatient prospective payment systems for the 
three most recent fiscal years. 
‘‘(2) PERIOD OF DESIGNATION.—The designa-
tion of an essential health system under paragraph 
(1) shall be effective for a period of 5 years, pro-
vided the hospital continues to meet the criteria in 
subparagraphs (A) and (B) in each year, and shall 
be subject to redesignation thereafter under para-
graph (1) for five year periods thereafter.’’. 
(b) ESSENTIAL HEALTH SYSTEM DESIGNATION AND 
INDEX.—Section 1900(b) of the Social Security Act (42 
U.S.C. 1396(b)) is amended— 
(1) by redesignating paragraphs (7) through 
(14) as paragraphs (8) through (15) respectively; 
and 
(2) by inserting after paragraph (6) the fol-
lowing: 
‘‘(7) ESSENTIAL HEALTH SYSTEM INDEX.— 
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‘‘(A) Not later than six months after the 
date of enactment and by August 1st in each 
year thereafter, MACPAC shall— 
‘‘(i) Prepare and submit to Congress 
a list of essential health systems that meet 
the criteria specified in section1905(ll), in-
cluding hospitals newly meeting the criteria 
and those that were so designated in one 
of the previous four fiscal years; and 
‘‘(ii) Establish and publish essential 
health system index values for each hos-
pital that is a subsection (d) hospital (as 
defined in section 1886(d)(1)(B)) in ac-
cordance with subparagraph (B). 
‘‘(B) In this subparagraph, the term ‘es-
sential health system index value’ is a computa-
tion of each hospital’s percentile ranking for the 
most recent fiscal year for which data is avail-
able 
on 
the 
measures 
described 
in 
section1905(ll)(1)(C)(i) and (ii) compared to 
other subsection (d) hospitals in the: 
‘‘(i) same core-based statistical area 
(if applicable), 
‘‘(ii) same state, and 
‘‘(iii) nationally. 
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