Sponsors (4)
This bill prioritizes short-term financial stability and predictable payment status for rural and low-volume hospitals to preserve local access, while increasing Medicare spending and potentially reducing incentives for efficiency or near-term policy solutions.
Rural and small hospitals (including Medicare-dependent hospitals, low-volume hospitals, sole community hospitals) receive continued payment support and the ability to decline reclassification through FY2031–FY2032, giving them near-term revenue stability and administrative predictability.
Medicare beneficiaries in rural and low-volume hospital service areas are more likely to retain local access to inpatient care because hospitals get payment support that helps keep facilities open and financially viable.
Policymakers (Congress and HHS/GAO) will receive a data-driven analysis of overlaps among six rural Medicare classifications and projections using FY2021 cost reports, which can inform targeted, evidence-based fixes to classification and payment rules.
Taxpayers and the Medicare program will face higher federal spending and potential additional pressure on the Medicare Trust Fund because of extended and expanded targeted payment adjustments.
Maintaining targeted payment protections and allowing hospitals to decline reclassification may reduce incentives for cost-efficiency or consolidation and could preserve higher per-case Medicare spending in dependent or low-volume hospitals.
The mandated GAO study and classification work do not provide immediate financial relief to struggling hospitals; hospitals and rural communities may not see near-term help while they wait for analysis and any subsequent congressional action.
Based on analysis of 3 sections of legislative text.
Introduced March 3, 2025 by Carol Devine Miller · Last progress March 3, 2025
Extends special Medicare payment rules that help small rural hospitals by moving multiple statutory expiration dates from April 1, 2025 to October 1, 2031 (or through fiscal year 2031/2032). It continues Medicare-dependent hospital and low-volume hospital payment adjustments and keeps certain reclassification options in place through fiscal year 2031. Directs the Government Accountability Office to produce a report within 180 days that counts and analyzes overlaps among six rural hospital classifications, offers recommendations to simplify them and improve financial stability, and projects effects of a specific cost-reporting-period rule on payments.