H.R. 3684

119th CONGRESS 1st Session

To amend titles XVIII and XIX of the Social Security Act to provide for enhanced payments to rural health care providers under the Medicare and Medicaid programs, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES · June 3, 2025 · Sponsor: Mr. Graves

Sec. 1. Short title; table of contents.

(a) Short title
- This Act may be cited as the Save America’s Rural Hospitals Act.
(b) Findings
- Congress finds the following:
  - More than 60,000,000 individuals in rural areas of the United States rely on rural hospitals and other providers as critical access points to health care.
  - Access to health care is essential to communities that Americans living in rural areas call home.
  - Americans living in rural areas are older, poorer, and sicker than Americans living in urban areas.
  - As of May 1, 2025, 151 rural hospitals have closed in the United States, according to the University of North Carolina’s Cecil G. Sheps Center for Health Services Research, and the rate of these closures is increasing.
  - Four hundred and thirty-two hospitals are operating at margins similar to those that have closed over the past decade. Of those, 216 are considered most vulnerable to closure.
  - Rural Medicare beneficiaries already face a number of challenges when trying to access health care services close to home, including the weather, geography, and cultural, social, and language barriers.
  - Approximately sixty percent of all primary care health professional shortage areas are located in rural areas.
  - Seniors living in rural areas are forced to travel significant distances for care.
  - On average, trauma victims in rural areas must travel twice as far as victims in urban areas to the closest hospital, and, as a result, 60 percent of trauma deaths occur in rural areas, even though only 20 percent of Americans live in rural areas.
  - With the 432 hospitals on the brink of closure, millions of Americans living in rural areas are on the brink of losing access to the closest emergency room.
(c) Table of contents

Title I—Rural provider payment stabilization

Subtitle A—Rural hospitals

Sec. 101. Eliminating Medicare sequestration for rural hospitals.

(a) In general
- Section 256(d)(7) of the Balanced Budget and Emergency Deficit Control Act of 1985 () is amended by adding at the end the following: 2 U.S.C. 906(d)(7)
  - (D) Rural hospitals
    - Payments under part A or part B of title XVIII of the Social Security Act with respect to items and services furnished by a critical access hospital (as defined in section 1861(mm)(1) of such Act), a sole community hospital (as defined in section 1886(d)(5)(D)(iii) of such Act), a medicare-dependent, small rural hospital (as defined in section 1886(d)(5)(G)(iv) of such Act), or a subsection (d) hospital (as defined in section 1886(d)(1)(B) of such Act) located in a rural area (as defined in section 1886(d)(2)(D) of such Act).
(b) Applicability
- The amendment made by this section applies with respect to orders of sequestration effective on or after the date that is 60 days after the date of the enactment of this Act.

Sec. 102. Reversing cuts to reimbursement of bad debt for critical access hospitals (CAHs) and rural hospitals.

(a) Rural hospitals
- Section 1861(v)(1)(T)(v) of the Social Security Act () is amended by inserting before the period at the end the following: . 42 U.S.C. 1395x(v)(1)(T)(v)
(b) CAHs
- Section 1861(v)(1)(W)(ii) of the Social Security Act () is amended by inserting after . 42 U.S.C. 1395x(v)(1)(W)(ii)
(c) Applicability
- The amendments made by this section apply with respect to cost reporting periods beginning more than 60 days after the date of the enactment of this Act.

Sec. 103. Permanently extending payment levels for low-volume hospitals and Medicare-dependent hospitals (MDHs).

(a) Extension of increased payments for MDHs
- (1) Extension of payment methodology
  - Section 1886(d)(5)(G) of the Social Security Act () is amended— 42 U.S.C. 1395ww(d)(5)(G)
    - in clause (i), by striking ; and
    - in clause (ii)(II), by striking .
- (2) Conforming amendments
  - (A) Extension of target amount
    - Section 1886(b)(3)(D) of the Social Security Act () is amended— 42 U.S.C. 1395ww(b)(3)(D)
      - (i) in the matter preceding clause (i), by striking ; and
      - (ii) in clause (iv), by striking through fiscal year 2025and inserting or a subsequent fiscal year.
  - (B) Extending the period during which hospitals can decline reclassification as urban
    - Section 13501(e)(2) of the Omnibus Budget Reconciliation Act of 1993 ( note) is amended by striking through fiscal year 2025and inserting , or a subsequent fiscal year. 42 U.S.C. 1395ww
(b) Extension of increased payments for low-Volume hospitals
- Section 1886(d)(12) of the Social Security Act () is amended— 42 U.S.C. 1395ww(d)(12)
  - in subparagraph (B)—
    - in the subparagraph heading, by inserting after ; and
    - in the matter preceding clause (i), by striking ;
  - in subparagraph (C)(i)—
    - in the matter preceding subclause (I), by striking through 2025and inserting and each subsequent fiscal year;
    - in subclause (II), by adding at the end; and
    - in subclause (III)—
      - (i) by striking fiscal years 2019 through 2025and inserting fiscal year 2019 and each subsequent fiscal year; and
      - (ii) by striking and inserting a period; and; and
    - by striking subclause (IV); and
  - in subparagraph (D)—
    - by amending the heading to read as follows: ; Permanent Applicable percentage increase
    - in the matter preceding clause (i), by striking in fiscal years 2011 through 2025and inserting in fiscal year 2011 or a subsequent fiscal year; and
    - in clause (ii), by striking each of fiscal years 2019 through 2025and inserting fiscal year 2019 and each subsequent fiscal year.

Section 1886 of the Social Security Act () is amended— 42 U.S.C. 1395ww

in subsection (d)(5)(F)(i), by inserting after ; and
in subsection (r)(2), by inserting after .

Sec. 105. Rebasing target amounts for Medicare-dependent hospitals and sole community hospitals.

Section 1886(b)(3) of the Social Security Act () is amended— 42 U.S.C. 1395ww(b)(3)

in subparagraph (K)(i)—
- in subclause (I), by inserting after ; and
- in subclause (II), by inserting after ; and
in subparagraph (L)(ii)—
- in subclause (I), by inserting after ; and
- in subclause (II), by inserting after .

Sec. 106. Implementing area wage index adjustments.

(a) Codification of low-Wage index hospital policy
- Section 1886(d)(3)(E) of the Social Security Act () is amended by adding at the end the following new clause: 42 U.S.C. 1395ww(d)(3)(E)
  - (v) For discharges occurring on or after October 1, 2025, the area wage index applicable under this subparagraph for a fiscal year to a hospital with an area wage index below the 25th percentile area wage index shall be increased by ½ of the difference between the otherwise applicable final area wage index for such fiscal year for such hospital and the 25th percentile area wage index for such fiscal year across all hospitals. Pursuant to the fourth sentence of clause (i), the preceding sentence shall be applied in a budget neutral manner.
(b) Area wage adjustment for hospitals not located in frontier States
- (1) Hospital inpatient services
  - Section 1886(d)(3)(E) of the Social Security Act (), as amended by subsection (a), is further amended by adding at the end the following new clause: 42 U.S.C. 1395ww(d)(3)(E)
    - (vi) Floor on area wage index for hospitals in certain other areas
      - For discharges occurring on or after October 1, 2025, the area wage index applicable under this subparagraph to any hospital which is not located in a frontier State (as defined in clause (iii)(II)) may not be less than 0.85.
      - In order to ensure that the aggregate payments made under this subsection for a fiscal year (beginning with fiscal year 2026) are not greater than the aggregate payments that would have been made under this subsection for such fiscal year without the application of subclause (I), as estimated by the Secretary, the Secretary shall establish pursuant to rulemaking a maximum area wage index to apply under this subparagraph to any hospital which is not located in a frontier State (as defined in clause (iii)(II)).
      - Subclauses (I) and (II) shall have no effect on the area wage index applicable in a fiscal year to a hospital with an area wage index that is greater than the floor under subclause (I) but less than the maximum area wage index established under subclause (II) for the fiscal year.
- (2) Hospital outpatient department services
  - Section 1833(t) of the Social Security Act (), is amended— 42 U.S.C. 1395l(t)
    - in paragraph (2)(D), by striking paragraph (19)and inserting paragraphs (19) and (23); and
      - (23) Floor on area wage adjustment factor for hospital outpatient department services in areas other than in frontier states
        
        (A) In general
        
        With respect to covered OPD services furnished on or after January 1, 2026, the area wage adjustment factor applicable under the payment system established under this subsection to any hospital outpatient department which is not located in a frontier State (as defined in section 1886(d)(3)(E)(iii)(II)) may not be less than 0.85.
        
        (B) Ensuring budget neutrality
        
        In order to ensure that the aggregate payments made under this subsection for a year (beginning with 2026) are not greater than the aggregate payments that would have been made under this subsection for such year without the application of subparagraph (A), as estimated by the Secretary, the Secretary shall establish pursuant to rulemaking a maximum area wage adjustment factor to apply under the payment system established under this subsection to any hospital outpatient department which is not located in a frontier State (as defined in clause (iii)(II)).
        
        (C) No impact for hospitals with an area wage adjustment factor between the floor and the maximum factor
        
        Subparagraphs (A) and (B) shall have no effect on the area wage adjustment factor applicable in a year to a hospital with an area wage adjustment factor that is greater than the floor under subparagraph (A) but less than the maximum area wage adjustment factor established under subparagraph (B) for the year.
    - by adding at the end the following new paragraph:
(c) Conforming amendments
- Section 1886(d)(3)(E) of the Social Security Act (), as amended by subsections (a) and (b), is further amended— 42 U.S.C. 1395ww(d)(3)(E)
  - in clause (i), by striking or (iv)and inserting (iv), (v), or (vi);
  - in clause (iii), by adjusting the margins of such clause 2 ems to the left; and
  - in clause (iv), by adjusting the margins of such clause 2 ems to the left.

Subtitle B—Other rural providers

Sec. 111. Making permanent increased Medicare payments for ground ambulance services in rural areas.

Section 1834(l)(13) of the Social Security Act () is amended— 42 U.S.C. 1395m(l)(13)

in the paragraph heading, by striking and inserting ; and
in subparagraph (A)—
- in the matter preceding clause (i), by striking ; and
- in clause (i), by striking .

Sec. 112. Permanently extending Medicare telehealth service enhancements for federally qualified health centers and rural health clinics.

Section 1834(m)(8) of the Social Security Act () is amended— 42 U.S.C. 1395m(m)(8)

in subparagraph (A)—
- in the matter preceding clause (i), by striking During the emergency period described in section 1135(g)(1)(B) and, in the case that such emergency period ends before December 31, 2024, during the period beginning on the first day after the end of such emergency period and ending on September 30, 2025and inserting Beginning on the first day of the emergency period described in section 1135(g)(1)(B); and
- in clause (ii), by striking determined under subparagraph (B)and inserting , for services furnished during the period beginning on the first day of the emergency period described in section 1135(g)(1)(B) and ending on the date that is 60 days after the date of the enactment of the Save America’s Rural Hospitals Act, determined under subparagraph (B) and, for services furnished after such period, an amount equal to the amount that such center or clinic would have been paid under this title had such services been furnished without the use of a telecommunications system; and
in subparagraph (B)—
- by striking and all that follows through and inserting ;
- by striking during the periods for which subparagraph (A) appliesand inserting during the period described in subparagraph (A)(ii); and
- by redesignating clause (ii) as subparagraph (C), and adjusting the margin accordingly.

Sec. 113. Restoring State authority to waive the 35-mile rule for certain Medicare critical access hospital designations.

(a) In general
- Section 1820 of the Social Security Act () is amended— 42 U.S.C. 1395i–4
  - in subsection (c)(2)—
    - in subparagraph (B)(i)—
      - (i) in subclause (I), by striking or at the end ;
      - (ii) in subclause (II), by inserting at the end ; and
      - (iii) by adding at the end the following new subclause:
        
        subject to subparagraph (G), is a hospital described in subparagraph (F) and is certified on or after the date of the enactment of the Save America’s Rural Hospitals Act by the State as being a necessary provider of health care services to residents in the area;
      - (F) Hospital described
        
        For purposes of subparagraph (B)(i)(III), a hospital described in this subparagraph is a hospital that—
        
        (i) is a sole community hospital (as defined in section 1886(d)(5)(D)(iii)), a medicare-dependent, small rural hospital (as defined in section 1886(d)(5)(G)(iv)), a low-volume hospital that in 2021 receives a payment adjustment under section 1886(d)(12), a subsection (d) hospital (as defined in section 1886(d)(1)(B)) that has fewer than 50 beds, or, subject to the limitation under subparagraph (G)(i)(I), is a facility described in subparagraph (G)(ii);
        
        (ii) is located in a rural area, as defined in section 1886(d)(2)(D);
        
        (iii)
        
        is located—
        
        in a county that has a percentage of individuals with income that is below 150 percent of the poverty line that is higher than the national or statewide average in 2020; or
        
        in a health professional shortage area (as defined in section 332(a)(1)(A) of the Public Health Service Act); or
        
        has a percentage of inpatient days of individuals entitled to benefits under part A of this title, enrolled under part B of this title, or enrolled under a State plan under title XIX that is higher than the national or statewide average in 2019 or 2020;
        
        (iv) subject to subparagraph (G)(ii)(II), has attested to the Secretary 2 consecutive years of negative operating margins preceding the date of certification described in subparagraph (B)(i)(III); and
        
        (v) submits to the Secretary—
        
        at such time and in such manner as the Secretary may require, an attestation outlining the good governance qualifications and strategic plan for multi-year financial solvency of the hospital; and
        
        not later than 120 days after the date on which the Secretary issues final regulations pursuant to section 113(b) of the Save America’s Rural Hospitals Act, an application for certification of the facility as a critical access hospital.
      - (G) Limitation on certain designations
        
        (i) The Secretary may not under subsection (e) certify pursuant to a certification by a State under subparagraph (B)(i)(III)—
        
        more than a total of 175 facilities as critical access hospitals, of which not more than 20 percent may be facilities described in clause (ii); and
        
        within any one State, more than 10 facilities as critical access hospitals.
        
        (ii) Facility described
        
        A facility described in this clause is a facility that as of the date of enactment of this subparagraph met the criteria for designation as a critical access hospital under subparagraph (B)(i)(I).
        
        For purposes of subparagraph (B)(i)(III), the criteria described in subparagraph (F)(iv) shall not apply with respect to the designation of a facility described in subclause (I).
    - by adding at the end the following new subparagraphs:
  - in subsection (e), by inserting after .
(b) Regulations
- Not later than 120 days after the date of the enactment of this Act, the Secretary of Health and Human Services shall issue final regulations to carry out this section.
(c) Clarification regarding facilities that meet distance or other certification criteria
- Nothing in this section shall affect the application of criteria for designation as a critical access hospital described in subclause (I) or (II) of section 1820(c)(2)(B)(i) of the Social Security Act (). 42 U.S.C. 1395i–4(c)(2)(B)(i)

Title II—Rural Medicare beneficiary equity

Sec. 201. Equalizing beneficiary copayments for services furnished by CAHs.

(a) In general
- Section 1866(a)(2)(A) of the Social Security Act () is amended by adding at the end the following: . 42 U.S.C. 1395cc(a)(2)(A)
(b) Applicability
- The amendment made by this section applies with respect to services furnished during a year that begins more than 60 days after the date of the enactment of this Act.

Title III—Regulatory relief

Sec. 301. Eliminating 96-hour requirements with respect to inpatient CAH services.

(a) Physician certification requirement
- Section 1814(a) of the Social Security Act () is amended— 42 U.S.C. 1395f(a)
  - in paragraph (6), by adding at the end; and
  - in paragraph (7)(E), by striking and inserting a period; and; and
  - by striking paragraph (8).
(b) Average length of stay requirement
- Section 1820(c)(2)(B)(iii) of the Social Security Act () is amended by striking . 42 U.S.C. 1395i–4(c)(2)(B)(iii)
(c) Applicability
- The amendments made by this section apply with respect to services furnished during a year that begins more than 60 days after the date of the enactment of this Act.

Sec. 302. Eliminating hospitalization requirement for extended care services furnished by certain hospitals.

Section 1812(f) of the Social Security Act () is amended by adding at the end the following new paragraph: 42 U.S.C. 1395d(f)

The Secretary shall provide for coverage under subsection (a)(2)(B) of extended care services (that are not posthospital extended care services) furnished on or after the date that is 60 days after the date of the enactment of this paragraph by a hospital described in subsection (b) of section 1883 pursuant to an agreement under such section for such a duration as the Secretary determines appropriate such that the coverage of such services for such duration does not alter the acute care nature of the benefit described in subsection (a)(2).

Title IV—Future of rural health care

Sec. 401. Medicare rural hospital flexibility program grants.

Section 1820(g) of the Social Security Act () is amended— 42 U.S.C. 1395i–4(g)

in paragraph (1)—
- in subparagraph (C), by striking and at the end;
- in subparagraph (D), by striking the period at the end and inserting a semicolon; and
  - rural emergency hospitals providing support for critical access hospitals to convert to rural emergency hospitals to stabilize hospital emergency services in their communities; and
  - supporting certified rural health clinics for maintaining and building business operations, increasing financial indicators, addressing population health, transforming services, and providing linkages and services for behavioral health and substance use disorders responding to public health emergencies.
- by adding at the end the following new subparagraphs:
by redesignating paragraphs (3) through (7) as paragraphs (4) through (8), respectively;
- (3) Activities to support carrying out FLEX grants
  - The Secretary may award grants or cooperative agreements to entities that submit to the Secretary applications, at such time and in such form and manner and containing such information as the Secretary specifies, for purposes of supporting States and hospitals in carrying out the activities under this subsection by providing technical assistance, data analysis, and evaluation efforts.
after paragraph (2), by inserting the following new paragraph:
in paragraph (4), as redesignated—
- in subparagraph (A), by inserting after ;
  - (C) Application
    - The State Office of Rural Health shall submit an application, on behalf of eligible rural hospitals, to the Secretary on or before such date and in such form and manner as the Secretary specifies.
- by amending subparagraph (C) to read as follows:
  - (D) Amount of grant
    - A grant to a hospital under this paragraph shall be determined on an equal national distribution so that each hospital receives the same amount of support related to the funds appropriated.
- by amending subparagraph (D), to read as follows:
- by amending subparagraph (E), to read as follows:
  - (E) Use of funds
    - State Offices of Rural Health and eligible hospitals may use the funds received through a grant under this paragraph for the purchase of computer software and hardware; the education and training of hospital staff on billing, operational, quality improvement and related value-focused efforts; and other delivery system reform programs determined appropriate by the Secretary.
- (9) Rural Health Transformation Grants
  - (A) Grants
    - The Secretary may award 5-year grants to State Offices of Rural Health and to eligible rural health care providers (as defined in subparagraph (D)) on the transition to new models, including rural emergency hospitals, extended stay clinics, freestanding emergency departments, rural health clinics, and integration of behavioral, oral health services, telehealth and other transformational models relevant to rural providers as such providers evolve to better meet community needs and the changing health care environment.
  - (B) Application
    - An applicable rural health care provider, in partnership with the State Office of Rural Health in the State in which the rural health care provider seeking a grant under this paragraph is located, shall submit an application to the Secretary on or before such date and in such form and manner as the Secretary specifies.
  - (C) Additional requirements
    - The Secretary may not award a grant under this paragraph to an eligible rural health care provider unless—
      - (i) local organizations or the State in which the hospital is located provides support (either direct or in kind); and there are letters of support from key State payers such as Medicaid and private insurance; and
      - (ii) the applicant describes in detail how the transition of the health care provider or providers will better meet local needs and be sustainable.
  - (D) Eligible rural health care provider defined
    - For purposes of this paragraph, the term includes a critical access hospital, a certified rural health clinic, a rural nursing home, skilled nursing facility, emergency care provider, or other entity identified by the Secretary. An eligible rural health care provider may include other entities applying on behalf of a group of providers such as a State Office of Rural Health, a State or local health care authority, a rural health network, or other entity identified by the Secretary. eligible rural health care provider
by adding at the end the following new paragraph: