This bill expands eligibility for Critical Access Hospital status under Medicare to help struggling rural hospitals avoid closure. It allows small rural hospitals serving underserved areas to qualify for enhanced Medicare payments if they can demonstrate financial hardship and commit to addressing community health needs.
Latest Action
Read twice and referred to the Committee on Finance. (text: CR S820-821)
AI Summary
Plain-English explanation of this bill
This bill expands eligibility for Critical Access Hospital status under Medicare to help struggling rural hospitals avoid closure. It allows small rural hospitals serving underserved areas to qualify for enhanced Medicare payments if they can demonstrate financial hardship and commit to addressing community health needs.
Last updated: 1/5/2026
Official Summary
Congressional Research Service summary
<p><strong>Rural Hospital Closure Relief Act of </strong><strong>2025</strong></p><p>This bill temporarily allows additional hospitals to qualify as critical access hospitals (CAHs) that receive special payment under Medicare.</p><p>Currently, in order to qualify as a CAH under Medicare, a hospital must either (1) be located more than 35 miles (or 15 miles in mountainous regions or areas with only secondary roads) from another hospital, or (2) have been certified prior to January 1, 2006, by the state as a necessary provider of services in the area.</p><p>The bill allows a hospital to also qualify if the hospital is a small, rural hospital that (1) serves a health professional shortage area, or a high number of low-income individuals or Medicare beneficiaries; (2) has experienced financial losses for two consecutive years; and (3) attests to having a strategic plan to address financial solvency and to committing to provide a service that is in high demand in the hospital's service area. This authority expires nine years after the bill's enactment.</p><p>The Government Accountability Office must study the effects of the bill's implementation. In addition, the Medicare Payment Advisory Commission must study and recommend payment systems for rural hospitals under Medicare. The Centers for Medicare & Medicaid Services must subsequently establish a mechanism and issue guidance on how newly designated CAHs may transition to different payment models under Medicare, including any new payment models recommended by the commission.</p>
Key Points
Main provisions of the bill
Expands Critical Access Hospital eligibility for rural facilities
Allows struggling rural hospitals to qualify for enhanced Medicare payments
Directs development of new rural hospital payment models
How This Impacts Americans
Potential effects on citizens and communities
Rural communities facing hospital closures would have a new pathway to keep their facilities open through enhanced Medicare reimbursements. This could preserve access to emergency care, maternity services, and basic medical care in areas where the nearest alternative hospital may be hours away.
Policy Areas
Primary Policy Area
Health
Related Subjects
Congressional oversight
Government studies and investigations
Health care costs and insurance
Health facilities and institutions
Hospital care
Medicare
Medicare Payment Advisory Commission
Rural conditions and development
Scope & Jurisdiction
Jurisdiction Level
federal
Congressional Session
119th Congress
Citation Reference
502, 119th Congress (2025). "Rural Hospital Closure Relief Act of 2025". Source: Voter's Right Platform. https://votersright.org/bills/118-s-502
