Sponsors (8)
The bill helps preserve rural hospital access and short‑term financial stability through temporary CAH conversions, oversight, and study, but does so with capped slots, potential increases in Medicare spending, delayed implementation of broader reforms, and increased operational and administrative uncertainty for some hospitals.
Rural residents and Medicare beneficiaries keep local access to emergency and inpatient care because struggling hospitals can convert to Critical Access Hospital (CAH) status or adopt sustaining payment models.
Struggling rural hospitals gain near-term financial stability from CAH payment rules and have the option to revert to prior prospective payment systems or become rural emergency hospitals within a year, helping keep facilities solvent.
Policymakers, states, and health systems receive evidence-based analysis and recommendations (MedPAC study, GAO/administrative reporting) to guide future rural hospital payment policy and evaluate program impacts.
Taxpayers and the Medicare program could face higher spending if CAH designations and new payment models expand, increasing federal costs for hospital reimbursements.
Rural residents in states with multiple distressed hospitals may be excluded from relief because of the ≤5 per‑State cap, leaving some communities without access improvements.
Struggling hospitals may not get timely help because the MedPAC report and HHS transition mechanism can take 8–9 years, delaying actionable support for near‑term closures or service gaps.
Based on analysis of 4 sections of legislative text.
Creates a temporary federal pathway allowing up to 120 struggling rural hospitals to be certified as Medicare CAHs despite distance rules, with reporting, caps, and required service expansions, and directs studies of rural hospital payments.
Official title: Amend title XVIII of the Social Security Act to restore State authority to waive for certain facilities the 35-mile rule for designating critical access hospitals under the Medicare program, and for other purposes.
Introduced February 10, 2025 by Richard Joseph Durbin · Last progress February 10, 2025
Allows states to certify certain struggling rural hospitals as Medicare critical access hospitals (CAHs) even if they fail the usual 35‑mile distance rule, subject to national and per‑state caps, reporting, and a sunset nine years after enactment. Sets standards for eligible hospitals, requires HHS regulation and GAO evaluation, directs MedPAC to study Medicare payment systems for rural hospitals using 2018–2028 data and recommend alternatives, and requires HHS to provide a transition mechanism so designated hospitals can move within a year to one of three payment models.