The Centers for Medicare and Medicaid agency has decided that the dialysis facility at American Samoa's LBJ Hospital no longer meets requirements.
The CMS found the hospital is out of compliance with eight conditions for Medicare coverage.
The CMS certifies health care facilities that participate in the United States Medicare programme, which pays for medical treatment and services for eligible clients.
The federal agency said it was initiating a process to terminate the Medicare approval of the renal disease facility at the territory's only hospital at the end of October.
The termination could have been avoided or postponed if a plan of correction was received within ten days of being notified, but the LBJ failed to submit such documents.