Physician Led and Rural Access to Quality Care Act

Bill Number

S. 1390

Origin Chamber

Senate

Congress

119th Congress, Session 1

Policy Area

Health

Status

Introduced

Latest Action

2025-04-09: Read twice and referred to the Committee on Finance.

Last Updated

2025-05-21T19:02:40Z

AI-Generated Summary

Purpose

The legislation, titled the "Physician Led and Rural Access to Quality Care Act," aims to update rules under Medicare (title XVIII of the Social Security Act) governing physician self-referral. Specifically, it revises exemptions related to physician-owned hospitals to promote access to care in rural areas and allow limited expansions of certain existing facilities, while addressing restrictions from the Stark Law (a federal rule that prohibits physicians from referring patients to entities in which they have a financial interest, like hospitals they own, if Medicare pays for the services).

Key Provisions

• Exemptions for Rural Hospitals: Amends Section 1877(d) of the Social Security Act to exclude "covered rural hospitals" from certain self-referral restrictions that apply to other hospitals. A "covered rural hospital" is defined in a new subsection (h)(8) as a facility:
• Located in a rural area (as defined under existing Medicare rules for hospital payments).
• Meeting specific criteria at the time of Medicare enrollment, based on a provision in Section 1820(c)(2)(B)(i)(I) related to rural hospital designation processes.
• Not required to meet additional criteria under that section.
• Expansion of Physician-Owned Hospitals: Amends Section 1877(i) to lift a previous prohibition on expansions of physician-owned hospitals. This change takes effect on the date of enactment and applies to existing facilities that previously qualified for exceptions.

Significant Changes to Existing Law

• Rural Hospital Exceptions: Previously, all hospitals (including rural ones) faced uniform self-referral restrictions under paragraphs (d)(2)(C) and (d)(3)(D). The bill carves out "covered rural hospitals" from these, providing targeted relief without altering rules for non-rural or non-qualifying facilities.
• End of Expansion Ban: Under prior law (from the Affordable Care Act), physician-owned hospitals could not expand their capacity or add services after 2010, with a temporary exception sunsetting in 2012. The bill permanently removes this ban for qualifying existing hospitals, updating references to include the new provision and allowing growth without prior federal approval processes.

Potential Impacts

• On Government Agencies: The Centers for Medicare & Medicaid Services (CMS) may see reduced administrative burdens in reviewing rural hospital referrals and expansions, potentially lowering enforcement costs for the Stark Law. However, it could require updates to guidance and monitoring to ensure compliance.
• On Citizens: Rural residents may gain better access to specialized care through physician-owned hospitals, as these facilities could expand services without ownership restrictions. Urban or non-rural patients are unlikely to be directly affected, but overall Medicare spending on hospital services might increase slightly due to more referrals.
• On International Relations: No direct impacts, as the bill focuses on domestic Medicare policy.

Main Stakeholders Affected

• Physicians and Hospital Owners: Physicians with ownership stakes in hospitals benefit from eased expansion rules and rural exemptions, enabling investment and growth.
• Rural Hospitals and Communities: Facilities in rural areas (e.g., critical access hospitals) gain flexibility, potentially improving healthcare access in underserved regions.
• Medicare Beneficiaries: Elderly and disabled patients relying on Medicare could see enhanced care options, particularly in rural settings.
• Non-Physician-Owned Hospitals: Larger hospital chains may face increased competition from expanding physician-owned facilities.
• Federal Government: CMS and the Department of Health and Human Services oversee implementation, with potential effects on Medicare program integrity.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens exceptions to the Stark Law, which aims to prevent conflicts of interest and overutilization of services. The changes could face legal challenges if seen as weakening anti-kickback protections, but they align with congressional authority over Medicare under the Social Security Act.
• Constitutional: No apparent issues, as it involves spending and regulatory powers granted to Congress; it does not infringe on individual rights or state powers.
• Political: Sponsored by a bipartisan group of senators from states with rural interests (e.g., Oklahoma, Kansas), the bill reflects priorities for rural healthcare access amid ongoing debates over hospital ownership and Medicare reform. It may influence future healthcare legislation by signaling support for physician-led models in underserved areas.

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

Sponsor

Sen. Lankford, James [R-OK]

Cosponsors (9)

Sen. Marshall, Roger [R-KS], Sen. Cassidy, Bill [R-LA], Sen. Tillis, Thomas [R-NC], Sen. Cornyn, John [R-TX], Sen. Mullin, Markwayne [R-OK], Sen. Boozman, John [R-AR], Sen. Barrasso, John [R-WY], Sen. Budd, Ted [R-NC], Sen. Justice, James C. [R-WV]

Recent Actions

• 2025-04-09: Read twice and referred to the Committee on Finance.
• 2025-04-09: Introduced in Senate

Bill Versions

• Physician Led and Rural Access to Quality Care Act — issued 2025-04-09 — PDF (3 pages)