A slew of bills targeting enhanced access to care within rural communities have, to the applause of the hospital industry, passed through committee to the full House of Representatives.
The rural care bills that made it through the Ways and Means Committee’s Wednesday markup broadly support the financial stability of designated Critical Access Hospitals (CAHs) and Rural Emergency Hospitals (REH) along with other smaller hospitals serving rural communities.
These included The Preserving Emergency Access in Key Sites Act of 2024 (PEAKS Act), which expands increased emergency ambulance services coverage for patients served by CAHs; The Rural Hospital Stabilization Act, which authorizes new grants funding for investments into CAHs, REHs and small rural hospitals staving off potential closure; and The Second Chances for Rural Hospitals Acts, which expands the eligibility requirements for low-volume hospitals that wish to become REHs.
Also marked up Wednesday was The Rural Physician Workforce Preservation Act, which seeks to increase the supply of new physicians in rural settings by closing a loophole that allowed urban hospitals to claim Graduate Medical Education residency slots intended for rural hospitals (The Rural Physician Workforce Preservation Act).
Another, the Preserving Telehealth, Hospital and Ambulance Access Act, tackles the broader bipartisan goal of extending telehealth flexibilities, though some committee members on both sides of the aisle raised concerns Wednesday over the specifics.
Of note to hospitals, the telehealth bill also extends inpatient payment adjustment programs that sustain Medicare-dependent Hospitals (small rural hospitals with at least 60% of admissions or patient days from Medicare patients) and low-volume hospitals through September 2025; extends the hospital-at-home waiver through the end of 2029; and extends Medicare add-on payments for urban, rural and super-rural areas’ emergency ambulance services that are expiring this year.
“The lack of access to emergency and outpatient services and preventative care is one of the reasons why rural Americans have a 43% higher mortality rate than urban Americans,” Ways and Means Committee Chairman Jason Smith (R-Miss.) said in the markup sessions’ opening comments. “Congress has a responsibility to the millions of patients living in rural America to make sure they have access to reliable, quality, lifesaving care.”
Hospitals praise funding bumps, but worry about physician-owned REHs
The bills largely won the praise of hospital lobbying groups—albeit with some suggestions to add language in the Second Chances for Rural Hospitals Act to preserve their interests.
In statements submitted to the committee ahead of its markups, the American Hospital Association (AHA) and the for-profit-focused Federation of American Hospitals both underscored the financial challenges faced by many of the country’s rural hospitals.
“Many operate on thin margins and struggle to keep their doors open, with low patient volumes and a patient mix that is generally older and from lower-income backgrounds, relying heavily on Medicare and Medicaid,” FAH wrote in its comments. “[Wednesday’s] markup reflects the Committee’s recognition of these challenges.”
AHA threw its full support behind the Rural Hospital Stabilization Act, the hospital-relevant components of the Telehealth bill and the Peaks Act, noting the latter for its backing for portions related to CAH-based ambulances as well as a “more narrowly targeted proposal … to protect the CAH designation of any facility in mountainous terrain whose CAH eligibility may be adversely impacted by a new hospital opening more than 10 miles from the hospital.”
AHA went on to write that it “supports the goal” of the lawmakers’ rural workforce bill, but “has concerns” that the current language could result in some graduate medical education slots remaining unused.
“According to the Centers for Medicare & Medicaid Services, in the first round of graduate medical education slot allocations, only eight geographically rural hospitals applied, and five were granted slots,” AHA wrote. “We are concerned that the small number of rural hospitals that applied for slots, due in part to limited resources with which to operate training programs, has led to fewer slots being awarded.”
However, both hospital industry groups were aligned in their criticism of the Second Chances for Rural Hospitals Act, which aims to onboard more facilities that eliminate inpatient beds to the REH designation. Whereas current law allows any hospitals that closed after Dec. 27, 2020 to reopen as REHs, the new draft would broaden the window to those closed after 2014.
The issue, they wrote, is that the bill as drafted could usher in rural emergency hospitals with physician ownership. The Affordable Care Act prevents the opening of new hospitals with physician ownership due to conflict of interest concerns, a policy the hospital industry is fighting to preserve as recent data suggesting a billion or more of savings have some lawmakers begin to question its purported benefits.
Reiterating hospitals’ past arguments, FAH wrote that failing to address the loophole could lead to physician-owned REHs that cherry-pick patients and drive excess utilization, thereby failing to meet the need of government-insured or complex patients while driving up costs. The AHA similarly alluded to higher costs and called on lawmakers to “establish common-sense guardrails” within the bill.
“Like the legislation enacted to close the whole hospital exception loophole, we ask Congress to close potential loopholes to the rural provider exception of Stark by adding language to the bill to prevent new physician-owned REHs from being established,” AHA wrote.