US Code

Public Law 119-73 (01/23/2026)

42 U.S.C. § 1395tt

Hospital providers of extended care services

(a)

Hospital facility agreements; reasonable costs of services

(1)
section 1395cc of this title Any hospital which has an agreement under may (subject to subsection (b)) enter into an agreement with the Secretary under which its inpatient hospital facilities may be used for the furnishing of services of the type which, if furnished by a skilled nursing facility, would constitute extended care services.
(2)
(A)
Notwithstanding any other provision of this subchapter, payment to any hospital (other than a critical access hospital) for services furnished under an agreement entered into under this section shall be based upon the reasonable cost of the services as determined under subparagraph (B).
(B)
(i)
The reasonable cost of the services consists of the reasonable cost of routine services (determined under clause (ii)) and the reasonable cost of ancillary services (determined under clause (iii)).
(ii)
The reasonable cost of routine services furnished during any calendar year by a hospital under an agreement under this section is equal to the product of—
(I)
the number of patient-days during the year for which the services were furnished, and
(II)
section 1395yy of this titlesection 1395ww(d)(2)(D) of this title the average reasonable cost per patient-day, such average reasonable cost per patient-day being the average rate per patient-day paid for routine services during the most recent year for which cost reporting data are available with respect to such services (increased in a compounded manner by the applicable increase for payments for routine service costs of skilled nursing facilities under subsections (a) through (d) of for subsequent cost reporting periods and up to and including such calendar year) under this subchapter to freestanding skilled nursing facilities in the region (as defined in ) in which the facility is located.
(iii)
The reasonable cost of ancillary services shall be determined in the same manner as the reasonable cost of ancillary services provided for inpatient hospital services.
(3)
section 1395x(v) of this title Notwithstanding any other provision of this subchapter, a critical access hospital shall be paid for covered skilled nursing facility services furnished under an agreement entered into under this section on the basis of equal to 101 percent of the reasonable costs of such services (as determined under ).
(b)

Eligible facilities

The Secretary may not enter into an agreement under this section with any hospital unless, except as provided under subsection (g), the hospital is located in a rural area and has less than 100 beds.

(c)

Terms and conditions of facility agreements

section 1395cc of this titlesection 1395cc of this titlesection 1395cc of this titleAn agreement with a hospital under this section shall, except as otherwise provided under regulations of the Secretary, be of the same duration and subject to termination on the same conditions as are agreements with skilled nursing facilities under and shall, where not inconsistent with any provision of this section, impose the same duties, responsibilities, conditions, and limitations, as those imposed under such agreements entered into under ; except that no such agreement with any hospital shall be in effect for any period during which the hospital does not have in effect an agreement under . A hospital with respect to which an agreement under this section has been terminated shall not be eligible to enter into a new agreement until a two-year period has elapsed from the termination date.

(d)

Post-hospital extended care services

section 1395cc of this titlesection 1395cc of this titleAny agreement with a hospital under this section shall provide that payment for services will be made only for services for which payment would be made as post-hospital extended care services if those services had been furnished by a skilled nursing facility under an agreement entered into under ; and any individual who is furnished services, for which payment may be made under an agreement under this section, shall, for purposes of this subchapter (other than this section), be deemed to have received post-hospital extended care services in like manner and to the same extent as if the services furnished to him had been post-hospital extended care services furnished by a skilled nursing facility under an agreement under .

(e)

Reimbursement for routine hospital services

During a period for which a hospital has in effect an agreement under this section, in order to allocate routine costs between hospital and long-term care services for purposes of determining payment for inpatient hospital services, the total reimbursement due for routine services from all classes of long-term care patients (including this subchapter, subchapter XIX, and private pay patients) shall be subtracted from the hospital’s total routine costs before calculations are made to determine this subchapter reimbursement for routine hospital services.

(f)

Conditions applicable to skilled nursing facilities

section 1395i–3 of this titleA hospital which enters into an agreement with the Secretary under this section shall be required to meet those conditions applicable to skilled nursing facilities relating to discharge planning and the social services function (and staffing requirements to satisfy it) which are promulgated by the Secretary under . Services furnished by such a hospital which would otherwise constitute post-hospital extended care services if furnished by a skilled nursing facility shall be subject to the same requirements applicable to such services when furnished by a skilled nursing facility except for those requirements the Secretary determines are inappropriate in the case of these services being furnished by a hospital under this section.

(g)

Agreements on demonstration basis

The Secretary may enter into an agreement under this section on a demonstration basis with any hospital which does not meet the requirement of subsection (b)(1), if the hospital otherwise meets the requirements of this section.

Aug. 14, 1935, ch. 531Pub. L. 96–499, title IX, § 904(a)(1)94 Stat. 2615Pub. L. 100–203, title IV101 Stat. 1330–48Pub. L. 100–360, title IV, § 411lPub. L. 100–485, title VI, § 608(d)(27)(B)102 Stat. 2422Pub. L. 100–360, title I, § 104(d)(6)102 Stat. 689Pub. L. 101–234, title I, § 101(a)103 Stat. 1979Pub. L. 101–508, title IV, § 4008(j)(1)104 Stat. 1388–51Pub. L. 105–33, title IV, § 4432(b)(5)(G)111 Stat. 422Pub. L. 106–113, div. B, § 1000(a)(6) [title IV, §§ 403(f), 408(a), (b)]113 Stat. 1536Pub. L. 106–554, § 1(a)(6) [title II, § 203(b)]114 Stat. 2763Pub. L. 108–173, title IV, § 405(a)(1)117 Stat. 2266(, title XVIII, § 1883, as added , , ; amended , §§ 4005(b)(1), (2), 4201(d)(3), , , as amended ()(1)(C), , as added , , ; , title IV, § 411(b)(4)(D), , , 770; , , ; , , ; , , ; , , , 1501A–371, 1501A–375; , , , 2763A–482; , , .)

Editorial Notes

Amendments

Pub. L. 108–1732003—Subsec. (a)(3). inserted “equal to 101 percent of” before “the reasonable costs”.

Pub. L. 106–554, § 1(a)(6) [title II, § 203(b)(1)]2000—Subsec. (a)(2)(A). , inserted “(other than a critical access hospital)” after “any hospital”.

Pub. L. 106–554, § 1(a)(6) [title II, § 203(b)(2)]Subsec. (a)(3). , added par. (3).

Pub. L. 106–113, § 1000(a)(6) [title IV, § 403(f)(1)]section 1395x(e) of this title1999—Subsec. (a)(1). , struck out “(other than a hospital which has in effect a waiver under subparagraph (A) of the last sentence of )” after “Any hospital”.

Pub. L. 106–113, § 1000(a)(6) [title IV, § 408(a)]Subsec. (b). , amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “The Secretary may not enter into an agreement under this section with any hospital unless—

“(1) except as provided under subsection (g) of this section, the hospital is located in a rural area and has less than 100 beds, and

section 300m of this title“(2) the hospital has been granted a certificate of need for the provision of long-term care services from the State health planning and development agency (designated under ) for the State in which the hospital is located.”

Pub. L. 106–113, § 1000(a)(6) [title IV, § 403(f)(2)]section 1395x(e) of this titleSubsec. (c). , struck out “, or during which there is in effect for the hospital a waiver under subparagraph (A) of the last sentence of ” before the period at end of first sentence.

Pub. L. 106–113, § 1000(a)(6) [title IV, § 408(b)]Subsec. (d). , struck out “(1)” before “Any agreement with a hospital” and struck out pars. (2) and (3), which related to limiting payments under extended care service agreements pursuant to this section to hospitals with more than 49 beds where skilled nursing facilities were available or where such payments exceeded a designated maximum.

Pub. L. 105–331997—Subsec. (a)(2)(B)(ii)(II). inserted “subsections (a) through (d) of” before “section 1395yy”.

Pub. L. 101–508section 1395yy of this titlesection 1395ww(d)(2)(D) of this titlesection 1396a(a)(28) of this title1990—Subsec. (a)(2)(B)(ii)(II). substituted “the most recent year for which cost reporting data are available with respect to such services (increased in a compounded manner by the applicable increase for payments for routine service costs of skilled nursing facilities under for subsequent cost reporting periods and up to and including such calendar year) under this subchapter to freestanding skilled nursing facilities in the region (as defined in ) in which the facility is located.” for “the previous calendar year” and all that follows through the period, which was executed by making the substitution for “the previous calendar year under the State plan (of the State in which the hospital is located) under subchapter XIX of this chapter to skilled nursing facilities located in the State and which meet the requirements specified in , or, in the case of a hospital located in a State which does not have such a State plan, the average rate per patient-day paid for routine services during the previous calendar year under this subchapter to skilled nursing facilities in such State.”

Pub. L. 101–234Pub. L. 100–360, § 104(d)(6)1989—Subsecs. (d)(1), (f). repealed , and provided that the provisions of law amended or repealed by such section are restored or revived as if such section had not been enacted, see 1988 Amendment notes below.

Pub. L. 100–360, § 104(d)(6)1988—Subsec. (d)(1). , struck out “post-hospital” before “extended care services” wherever appearing.

Pub. L. 100–360, § 411(b)(4)(D)Subsec. (d)(3). , inserted before period at end “, except that such payment shall continue to be made in the period for those patients who are receiving extended care services at the time the hospital reaches the limit specified in this paragraph”.

Pub. L. 100–360, § 411lPub. L. 100–485, § 608(d)(27)(B)Pub. L. 100–203, § 4201(d)(3)Subsec. (f). ()(1)(C), as added by , added , see 1987 Amendment note below.

Pub. L. 100–360, § 104(d)(6), struck out “post-hospital” before “extended care services”.

Pub. L. 100–203, § 4005(b)(1)1987—Subsec. (b)(1). , substituted “100” for “50”.

Pub. L. 100–203, § 4005(b)(2)Subsec. (d). , designated existing provisions as par. (1) and added pars. (2) and (3).

Pub. L. 100–203, § 4201(d)(3)Pub. L. 100–360, § 411lPub. L. 100–485, § 608(d)(27)(B)Subsec. (f). , as added by ()(1)(C), and , substituted “section 1395i–3” for “section 1395x(j)(15)”.

Statutory Notes and Related Subsidiaries

Effective Date of 2003 Amendment

Pub. L. 108–173section 405(a)(2) of Pub. L. 108–173section 1395f of this titleAmendment by applicable to payments for services furnished during cost reporting periods beginning on or after , see , set out as a note under .

Effective Date of 2000 Amendment

Pub. L. 106–554, § 1(a)(6) [title II, § 203(c)]114 Stat. 2763

section 1395yy of this title“The amendments made by this section [amending this section and ] shall apply to cost reporting periods beginning on or after the date of the enactment of this Act [].”
, , , 2763A–482, provided that:

Effective Date of 1999 Amendment

Pub. L. 106–113, div. B, § 1000(a)(6) [title IV, § 408(c)]113 Stat. 1536

42 U.S.C. 1395yy(e)(2)(E)“The amendments made by this section [amending this section] take effect on the date that is the first day after the expiration of the transition period under section 1888(e)(2)(E) of the Social Security Act () for payments for covered skilled nursing facility services under the medicare program.”
, , , 1501A–375, provided that:

Effective Date of 1997 Amendment

Pub. L. 105–33section 4432(d) of Pub. L. 105–33section 1395i–3 of this titleAmendment by applicable to items and services furnished on or after , see , set out as a note under .

Effective Date of 1990 Amendment

Pub. L. 101–508, title IV, § 4008(j)(4)104 Stat. 1388–52

“The amendment made by paragraph (1) [amending this section] shall apply to services furnished on or after .”
, , , provided that:

Effective Date of 1989 Amendment

Pub. L. 101–234section 101(d) of Pub. L. 101–234section 1395c of this titleAmendment by effective , see , set out as a note under .

Effective Date of 1988 Amendment

Pub. L. 100–485Pub. L. 100–360section 608(g)(1) of Pub. L. 100–485section 704 of this titleAmendment by effective as if included in the enactment of the Medicare Catastrophic Coverage Act of 1988, , see , set out as a note under .

section 104(d)(6) of Pub. L. 100–360section 104(a) of Pub. L. 100–360section 1395d of this titleAmendment by effective , except as otherwise provided, and applicable to inpatient hospital deductible for 1989 and succeeding years, to care and services furnished on or after , to premiums for January 1989 and succeeding months, and to blood or blood cells furnished on or after , see , set out as a note under .

section 411 of Pub. L. 100–360lPub. L. 100–360Pub. L. 100–203Pub. L. 100–203section 411(a) of Pub. L. 100–360section 106 of Title 1Except as specifically provided in , amendment by section 411(b)(4)(D), ()(1)(C) of , as it relates to a provision in the Omnibus Budget Reconciliation Act of 1987, , effective as if included in the enactment of that provision in , see , set out as a Reference to OBRA; Effective Date note under , General Provisions.

Effective Date of 1987 Amendment

Pub. L. 100–203, title IV, § 4005(b)(4)101 Stat. 1330–49

42 U.S.C. 1395tt“The amendments made by paragraphs (1) and (2) [amending this section] shall apply to agreements under section 1883 of the Social Security Act [] entered into after .”
, , , provided that:

section 4201(d)(3) of Pub. L. 100–203section 1395i–3 of this titlesection 4204(a) of Pub. L. 100–203section 1395i–3 of this titleAmendment by applicable to services furnished on or after , without regard to whether regulations to implement such amendment are promulgated by such date, except as otherwise specifically provided in , see , as amended, set out as an Effective Date note under .

Effective Date

Pub. L. 96–499, title IX, § 904(d)94 Stat. 2617

l“The amendments made by this section [enacting this section and section 1396 of this title] shall become effective on the date on which final regulations, promulgated by the Secretary to implement such amendments, are first issued; and those regulations shall be issued not later than the first day of the sixth month following the month in which this Act is enacted [December 1980].”
, , , provided that:

Pub. L. 101–508Hold Harmless for Amendment by

Pub. L. 101–508, title IV, § 4008(j)(2)104 Stat. 1388–51

42 U.S.C. 1395tt“If, as a result of the amendment made by paragraph (1) [amending this section], the reasonable cost of routine services furnished by a hospital during a calendar year (as determined under section 1883 of the Social Security Act []) is less than the reasonable cost of such services determined under such section for the previous calendar year, the reasonable cost of such services furnished by the hospital during the calendar year under such section shall be equal to the reasonable cost determined under such section for the previous calendar year.”
, , , provided that:

Swing Beds Certified Prior to

Pub. L. 101–508, title IV, § 4008(j)(3)104 Stat. 1388–52

42 U.S.C. 1395tt(b)(1)“Notwithstanding the requirement of section 1883(b)(1) of the Social Security Act [] that the Secretary may not enter into an agreement under such section with a hospital that is not located in a rural area, any agreement entered into under such section on or before , between the Secretary of Health and Human Services and a hospital located in an urban area shall remain in effect.”
, , , provided that:

Report of Hospital Admissions for Extended Care Services

Pub. L. 100–203, title IV, § 4005(b)(3)101 Stat. 1330–49Pub. L. 100–360, title IV, § 411(b)(4)(E)Pub. L. 100–485, title VI, § 608(d)(18)(C)102 Stat. 2419, , , as amended by , as added by , , , directed Secretary of Health and Human Services to report to Congress, not later than , concerning the proportion of admissions to hospitals for extended care services under this section which are denied or approved by a peer review organization, and recommendations for methods of encouraging hospitals that have a low occupancy rate, are eligible to enter (but have not entered) into an agreement under this section, and are located in areas with a need for additional providers of extended care services, to enter into such agreements.

Report on Hospital Providers of Extended Care, Skilled Nursing, and Intermediate Care Services

Pub. L. 96–499, title IX, § 904(c)94 Stat. 2617l, , , directed Secretary of Health and Human Services, within three years after , to submit to Congress a report evaluating programs established by the amendments made by this section (enacting this section and section 1396 of this title), including in such report an analysis of the extent and effect of the agreements under such programs on availability and effective and economical provision of long-term care services, whether such programs should be continued, the results of any demonstration projects conducted under such programs, and whether eligibility to participate in such programs should be extended to other hospitals, regardless of bed size or geographic location, where there is a shortage of long-term care beds.