Save America’s Rural Hospitals Act

Bill Number

H.R. 3684

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Health

Status

Introduced

Latest Action

2025-06-03: Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last Updated

2026-03-04T09:06:41Z

AI-Generated Summary

Purpose

The "Save America's Rural Hospitals Act" (H.R. 3684) aims to support rural healthcare by providing enhanced payments and regulatory relief to rural hospitals and providers under Medicare and Medicaid. It addresses the crisis of rural hospital closures, which threaten access to essential care for over 60 million rural Americans who face unique challenges like poverty, aging populations, geographic barriers, and higher rates of illness compared to urban areas. The bill seeks to stabilize finances, prevent closures, and improve equity in healthcare delivery for rural communities.

Key Provisions

The legislation is structured into four titles, focusing on payment enhancements, beneficiary equity, regulatory simplifications, and future planning for rural health.

Title I: Rural Provider Payment Stabilization

This title increases and stabilizes Medicare payments to rural hospitals and other providers to counter financial vulnerabilities.

• Subtitle A: Rural Hospitals
• Sec. 101: Exempts rural hospitals (including critical access hospitals [CAHs], sole community hospitals [SCHs], Medicare-dependent hospitals [MDHs], and other rural subsection (d) hospitals) from Medicare sequestration cuts (automatic reductions in federal spending).
• Sec. 102: Reverses reductions in reimbursements for bad debt (unpaid patient bills) by allowing rural hospitals and CAHs to recover 15% more than current limits.
• Sec. 103: Permanently extends higher payment levels and methodologies for low-volume hospitals (those with fewer than 800 discharges annually outside metropolitan areas) and MDHs (small rural hospitals reliant on Medicare patients).
• Sec. 104: Extends disproportionate share hospital (DSH) payments (extra funding for hospitals serving many low-income patients) to SCHs and MDHs beyond 2025.
• Sec. 105: Updates (rebases) target payment amounts for MDHs and SCHs using more recent cost data from fiscal year 2024 onward to reflect current expenses.
• Sec. 106: Codifies and expands area wage index adjustments (factors accounting for local labor costs in Medicare payments):
• Increases the wage index for low-wage hospitals (below the 25th percentile) by half the gap to the 25th percentile.
• Sets a 0.85 floor on wage indices for hospitals outside frontier states (sparsely populated areas like Alaska or Wyoming), with a budget-neutral maximum index to offset costs.

• Subtitle B: Other Rural Providers
• Sec. 111: Makes permanent the increased Medicare payments for ground ambulance services in rural areas (super rural and rural zones), removing the October 1, 2025, expiration.
• Sec. 112: Permanently extends telehealth enhancements for federally qualified health centers (FQHCs) and rural health clinics (RHCs), allowing full Medicare payment rates for telehealth services without geographic restrictions, starting from the COVID-19 emergency period.
• Sec. 113: Restores state authority to waive the 35-mile distance rule for CAH designation, allowing up to 175 new certifications nationwide (limited to 10 per state) for vulnerable rural hospitals, SCHs, MDHs, low-volume hospitals, or small facilities in high-poverty or shortage areas with negative margins, subject to application and governance requirements.

Title II: Rural Medicare Beneficiary Equity

• Sec. 201: Equalizes copayments for outpatient CAH services to 20% of the lesser of the actual charge or what a regular hospital would be paid, reducing out-of-pocket costs for rural Medicare beneficiaries compared to current rules.

Title III: Regulatory Relief

• Sec. 301: Removes the 96-hour average inpatient stay limit and physician certification requirements for CAH services, allowing more flexible care without risking CAH status.
• Sec. 302: Eliminates the three-day prior hospitalization requirement for extended care (skilled nursing) services provided by certain rural hospitals, enabling direct coverage for up to a duration set by the Secretary to maintain the program's focus on acute care.

Title IV: Future of Rural Health Care

• Sec. 401: Expands the Medicare Rural Hospital Flexibility Program by:
• Adding grant uses for supporting CAHs converting to rural emergency hospitals and certified RHCs in operations, financial health, population health, behavioral health, and emergency response.
• Allowing grants for technical assistance, data analysis, and evaluation to states and hospitals.
• Requiring equal national distribution of funds to eligible hospitals via state offices of rural health for software, training, and delivery reforms.
• Introducing five-year rural health transformation grants to state offices and providers (e.g., CAHs, RHCs, nursing homes) for transitioning to models like rural emergency hospitals, telehealth integration, and behavioral/oral health services, with requirements for local support and sustainability plans.

Most provisions apply 60-120 days after enactment, with some starting October 1, 2025, or fiscal year 2026.

Significant Changes to Existing Law

• Permanency for Temporary Measures: Converts expiring provisions (e.g., low-volume/MDH payments, ambulance increases, telehealth expansions) into permanent ones, removing dates like October 1, 2025.
• Reversals and Enhancements: Undoes bad debt reimbursement cuts (from prior laws like the Bipartisan Budget Act) and sequestration impacts (from the Balanced Budget and Emergency Deficit Control Act of 1985).
• New Flexibilities: Introduces wage index floors and boosts, rebasing of targets, waiver authority for CAH designations (reversing 2019 restrictions), and elimination of outdated rules (e.g., 96-hour CAH limit from 1997, hospitalization prerequisite from original Medicare rules).
• Grant Expansions: Broadens the Rural Hospital Flexibility Program (established in 1997) to include new activities, equal funding distribution, and transformation grants, shifting from planning-focused to operational and innovative support.
• Budget Neutrality: Wage adjustments require offsetting measures to avoid increasing overall Medicare spending.

These changes amend Titles XVIII (Medicare) and XIX (Medicaid) of the Social Security Act, with limited direct Medicaid impacts noted.

Potential Impacts

• Government Agencies: The Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) will face increased administrative burdens for implementing payment changes, wage adjustments, CAH certifications, and new grants, potentially raising Medicare expenditures (offset by neutrality rules). Long-term, it could reduce costs from hospital closures by stabilizing the system.
• Citizens: Rural Medicare and Medicaid beneficiaries gain better access to local care, lower copays, and fewer travel burdens, particularly for emergencies, telehealth, and extended services. This may improve health outcomes in underserved areas with high poverty and shortages, though urban beneficiaries see no direct change.
• International Relations: No apparent impacts, as the bill focuses on domestic U.S. healthcare policy.

Main Stakeholders Affected

• Rural Healthcare Providers: Primary beneficiaries include CAHs, SCHs, MDHs, low-volume hospitals, RHCs, FQHCs, ambulance services, and rural emergency/nursing facilities, gaining financial stability and flexibility.
• Rural Residents: Over 60 million Americans in rural areas, especially older, low-income, and Medicare-dependent individuals, who rely on these providers for essential services.
• States and Local Governments: State offices of rural health and agencies benefit from restored waiver authority, grants, and support for conversions, aiding community health planning.
• Federal Government: HHS/CMS as implementers; taxpayers via Medicare funding.
• Insurers and Payers: Medicaid programs and private insurers may see indirect effects through required support letters for grants and potential cost shifts.

Notable Legal, Constitutional, or Political Implications

• Legal: Amends core Medicare statutes, requiring HHS rulemaking (e.g., for wage maxima and CAH regulations within 120 days), with clear applicability dates to ensure smooth transitions. Limits on new CAH designations (e.g., 175 total) prevent overuse while promoting targeted relief.
• Constitutional: No direct challenges; aligns with Congress's spending power under Article I and general welfare clause, focusing on equitable federal program administration without infringing on states' rights (instead enhancing state flexibility).
• Political: Highlights bipartisan rural advocacy (introduced by Rep. Graves [R] and Rep. Budzinski [D]), addressing a non-partisan issue of healthcare access amid rising closures (151 since tracking began, 432 at risk). Could influence budget debates by increasing targeted spending, but neutrality provisions mitigate fiscal concerns; promotes innovation in rural models without mandating broad reforms.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Graves, Sam [R-MO-6]

Cosponsors (5)

Rep. Budzinski, Nikki [D-IL-13], Rep. Huffman, Jared [D-CA-2], Rep. Bergman, Jack [R-MI-1], Rep. Neguse, Joe [D-CO-2], Rep. Ciscomani, Juan [R-AZ-6]

Recent Actions

• 2025-06-03: Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-06-03: Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-06-03: Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-06-03: Introduced in House
• 2025-06-03: Introduced in House

Bill Versions

• Save America’s Rural Hospitals Act — issued 2025-06-03 — PDF (29 pages)