Sponsors (34)
The bill allows physician-owned hospitals to expand into some rural areas—potentially increasing local access and investment—but raises the risk of higher Medicare costs, fragmented care, and financial harm to independent rural hospitals.
Medicare beneficiaries in eligible rural areas may gain increased local inpatient access if physician-owned hospitals expand nearby.
Existing physician-owners and local health systems can invest to expand facilities in eligible rural locations, potentially improving service availability and preserving jobs for local healthcare workers.
Taxpayers and Medicare beneficiaries may face higher Medicare spending if physician-owned hospitals add more profitable services, increasing federal costs and possibly beneficiary cost-sharing.
Independent rural hospitals and rural communities could be disadvantaged if profitable services shift to physician-owned facilities, weakening those hospitals' finances and threatening long-term local access to care.
Hospitals and Medicare beneficiaries may experience fragmented care if patients are steered toward physician-owned facilities, undermining coordination at existing community hospitals.
Based on analysis of 2 sections of legislative text.
Removes the federal ban on expansion of existing physician-owned hospitals in rural areas that meet a 35-mile (15-mile in mountainous/secondary-road areas) distance test.
Introduced March 18, 2025 by H. Morgan Griffith · Last progress March 18, 2025
Allows existing physician-owned hospitals in qualifying rural areas to expand by removing a federal prohibition that previously blocked such expansions. It defines a "covered rural hospital" as one located in a designated rural area and that, at enrollment, is more than a 35-mile drive (or more than 15 miles in mountainous/secondary-road areas) from another hospital or critical access hospital. The change takes effect on enactment and does not change Medicare payment rules or provide new funding; it only modifies the Stark self-referral restrictions to permit expansion of existing physician-owned hospitals that meet the distance-based rural test.