Rural Hospital Closure Relief Act of 2025
- Bill Number
- H.R. 6240
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2025-11-20: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, 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
- 2026-06-11T23:26:37Z
AI-Generated Summary
Purpose of the Legislation
The Rural Hospital Closure Relief Act of 2025 aims to prevent closures of rural hospitals by restoring state flexibility to waive the "35-mile rule" for designating certain facilities as Critical Access Hospitals (CAHs) under Medicare. CAHs receive special Medicare payments to support essential services in underserved rural areas. The bill also adjusts requirements for hospitals in U.S. territories and requires studies on rural hospital payments to ensure long-term access to care.
Key Provisions
- Waiver of the 35-Mile Rule for CAH Designation:
- Allows states to certify specific rural hospitals as "necessary providers" of healthcare, enabling them to qualify as CAHs even if they are within 35 miles of another hospital (a previous restriction).
- Eligible hospitals must be one of the following: a sole community hospital (the only nearby option for care), a Medicare-dependent small rural hospital (relies heavily on Medicare patients), a low-volume hospital (treats few patients), or a standard acute care hospital in a rural area.
- Additional requirements include: location in a rural area or rural part of a metro area; serving high-poverty counties, health professional shortage areas (regions with too few doctors or nurses), or high numbers of Medicare patients; two years of financial losses; and a plan for good management, financial stability, and adding or expanding needed services (e.g., maternity or mental health care based on community needs).
- Hospitals must apply to the Secretary of Health and Human Services (HHS) with these details.
- Limitations on Designations:
- Nationwide cap of 120 new CAHs under this waiver.
- Maximum of 5 per state.
- Available only for certifications from enactment through 9 years later (sunset provision).
- HHS must allocate designations fairly: one per state with eligible hospitals, then proportionally based on need.
- Reporting and Oversight:
- New CAHs must report on their expanded services and notify HHS of changes, with plans to maintain care access.
- Failure to report can lead to loss of CAH status.
- Existing rules for distance and other CAH criteria remain unchanged.
- Adjustments for U.S. Territories:
- For hospitals in Guam, American Samoa, Northern Mariana Islands, or U.S. Virgin Islands, removes the 25-bed limit for CAHs; instead, HHS determines an appropriate number of beds, while keeping the average 96-hour stay limit.
- Studies and Reports:
- GAO Study (Government Accountability Office): Examines new CAHs' characteristics, finances, Medicare spending increases, and impact on rural care access. Report to Congress in 6 years.
- MEDPAC Study (Medicare Payment Advisory Commission): Analyzes rural hospital payments from 2018–2028, including new CAHs, and suggests sustainable payment options (e.g., value-based systems that reward quality). Report to Congress in 8 years, with transition impact analysis if changes are recommended.
- Sunset and Transition:
- After 9 years, HHS must help these CAHs switch to other Medicare payment models within 1 year, such as prior systems, new MEDPAC-recommended models, or rural emergency hospital status (for facilities focusing on urgent care without full inpatient services).
- Implementation Timeline:
- HHS to issue final rules within 1 year of enactment.
- Territory changes effective October 1, 2025.
Significant Changes to Existing Law
- Amends Section 1820 of the Social Security Act to add a new pathway for CAH designation, explicitly allowing state waivers of the 35-mile distance rule for qualifying rural hospitals facing closure risks—previously, such waivers were limited or unavailable.
- Modifies CAH bed limits in Section 1820 for U.S. territories, shifting from a fixed 25-bed cap to flexible determination by HHS, recognizing unique geographic and resource challenges in these areas.
- Introduces time-limited caps, reporting mandates, and mandatory studies, which were not previously required for CAH designations.
Potential Impacts
- On Citizens: Improves healthcare access in rural and high-need areas by helping hospitals stay open, potentially reducing travel for services like emergency care, maternity, or mental health. Medicare beneficiaries (mostly seniors and disabled) in these areas may benefit from stabilized local providers.
- On Government Agencies: Increases administrative workload for HHS in processing applications, allocations, and reporting; raises Medicare expenditures due to higher CAH payments (cost-based reimbursement instead of standard rates), though studies will evaluate this. GAO and MEDPAC will need resources for required analyses.
- On International Relations: Minimal direct impact, but could indirectly support U.S. territories (treated as domestic for Medicare) by enhancing their healthcare infrastructure.
Main Stakeholders Affected
- Rural Hospitals: Eligible facilities gain financial relief through CAH status, but face new reporting and service expansion requirements.
- State Governments: Regain authority to certify hospitals, influencing local healthcare decisions.
- Medicare Beneficiaries and Rural Residents: Primary beneficiaries of preserved access to care in underserved areas.
- HHS and Medicare Program: Responsible for implementation, oversight, and potential cost increases.
- Congress and Oversight Bodies (GAO, MEDPAC): Involved in evaluation and future policy recommendations.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens Medicare's role in rural health equity by expanding CAH flexibility, but includes safeguards like caps and revocation to prevent overuse. The sunset provision ensures the changes are temporary, allowing Congress to reassess based on studies. No conflicts with existing CAH criteria, preserving program integrity.
- Constitutional: Aligns with federal spending power under the Constitution for healthcare programs; no apparent free speech, due process, or equal protection issues, as it targets specific needy facilities without discrimination.
- Political: Addresses rural healthcare crises (e.g., hospital closures due to low patient volumes and finances), appealing to bipartisan concerns over rural decline. Could spark debates on federal spending and program costs, with studies providing data for future reforms. The territory adjustments highlight equity for non-mainland U.S. areas, potentially influencing broader territorial policy discussions.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Vindman, Eugene Simon [D-VA-7]
Cosponsors (3)
Rep. Mann, Tracey [R-KS-1], Del. Moylan, James C. [R-GU-At Large], Del. King-Hinds, Kimberlyn [R-MP-At Large]
Recent Actions
- 2025-11-20: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, 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.
- 2025-11-20: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, 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.
- 2025-11-20: Introduced in House
- 2025-11-20: Introduced in House
Bill Versions
- Rural Hospital Closure Relief Act of 2025 — issued 2025-11-20 — PDF (16 pages)