Rural Hospital Closure Relief Act of 2023

To amend title XVIII of the Social Security Act to restore State authority to waive for certain facilities the 35-mile rule for designating critical access hospitals under the Medicare program, and for other purposes. 1. Short title This Act may be cited as the Rural Hospital Closure Relief Act of 2023 2. Restoring State authority to waive the 35-mile rule for certain Medicare critical access hospital designations (a) In general Section 1820 of the Social Security Act ( 42 U.S.C. 1395i–4 (1) in subsection (c)(2)— (A) in subparagraph (B)(i)— (i) in subclause (I), by striking or (ii) in subclause (II), by inserting or (iii) by adding at the end the following new subclause: (III) subject to subparagraph (G), is a hospital described in subparagraph (F) and is certified on or after the date of the enactment of the Rural Hospital Closure Relief Act of 2023 ; and (B) by adding at the end the following new subparagraphs: (F) Hospital described For purposes of subparagraph (B)(i)(III), a hospital described in this subparagraph is a hospital that— (i) is a sole community hospital (as defined in section 1886(d)(5)(D)(iii)), a medicare dependent, small rural hospital (as defined in section 1886(d)(5)(G)(iv)), a low-volume hospital that in 2021 receives a payment adjustment under section 1886(d)(12), a subsection (d) hospital (as defined in section 1886(d)(1)(B)) that has fewer than 50 beds, or, subject to the limitation under subparagraph (G)(i)(I), is a facility described in subparagraph (G)(ii); (ii) is located in a rural area, as defined in section 1886(d)(2)(D); (iii) (I) is located— (aa) in a county that has a percentage of individuals with income that is below 150 percent of the poverty line that is higher than the national or statewide average in 2021; or (bb) in a health professional shortage area (as defined in section 332(a)(1)(A) of the Public Health Service Act); or (II) has a percentage of inpatient days of individuals entitled to benefits under part A of this title, enrolled under part B of this title, or enrolled under a State plan under title XIX that is higher than the national or statewide average in 2020 or 2021; (iv) subject to subparagraph (G)(ii)(II), has attested to the Secretary two consecutive years of negative operating margins preceding the date of certification described in subparagraph (B)(i)(III); and (v) submits to the Secretary— (I) at such time and in such manner as the Secretary may require, an attestation outlining the good governance qualifications and strategic plan for multi-year financial solvency of the hospital; and (II) not later than 120 days after the date on which the Secretary issues final regulations pursuant to section 2(b) of the Rural Hospital Closure Relief Act of 2023 (G) Limitation on certain designations (i) In general The Secretary may not under subsection (e) certify pursuant to a certification by a State under subparagraph (B)(i)(III)— (I) more than a total of 175 facilities as critical access hospitals, of which not more than 20 percent may be facilities described in clause (ii); and (II) within any one State, more than 10 facilities as critical access hospitals. (ii) Facility described (I) In general A facility described in this clause is a facility that as of the date of enactment of this subparagraph met the criteria for designation as a critical access hospital under subparagraph (B)(i)(I). (II) Nonapplication of certain criteria For purposes of subparagraph (B)(i)(III), the criteria described in subparagraph (F)(iv) shall not apply with respect to the designation of a facility described in subclause (I). ; and (2) in subsection (e), by inserting , subject to subsection (c)(2)(G), The Secretary shall (b) Regulations Not later than 120 days after the date of the enactment of this Act, the Secretary of Health and Human Services shall issue final regulations to carry out subsection (a). (c) Clarification regarding facilities that meet distance or other certification criteria Nothing in this section shall affect the application of criteria for designation as a critical access hospital described in subclause (I) or (II) section 1820(c)(2)(B)(i) of the Social Security Act ( 42 U.S.C. 1395i–4(c)(2)(B)(i) (d) GAO study and report (1) Study The Comptroller General of the United States (in this section referred to as the Comptroller General (A) the characteristics of facilities designated as critical access hospitals pursuant to section 1820(c)(2)(B)(i)(III) of the Social Security Act, as added by subsection (a); (B) the financial status and outlook for such facilities based on their designation as a critical access hospital pursuant to such section; (C) any increase in expenditures under the Medicare program under title XVIII of the Social Security Act ( 42 U.S.C. 1395 et seq. (D) whether the authority to designate facilities as critical access hospitals pursuant to such section 1820(c)(2)(B)(i)(III) should be maintained as is, modified in scale or scope, or sunset. (2) Report Not later than 7 years after the date of the enactment of this Act, the Comptroller General shall submit to Congress a report containing the results of the study conducted under subsection (a), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate. (e) Guidance Not later than 2 years after the date on which the Comptroller General submits the report to Congress under subsection (d)(2), the Administrator of the Centers for Medicare & Medicaid Services shall establish a mechanism and provide guidance and technical assistance to facilities that have been designated as a critical access hospital pursuant to section 1820(c)(2)(B)(i)(III) of the Social Security Act, as added by subsection (a), on how such facilities may consider transitioning to a different payment model under the Medicare program.

Summary: Rural Hospital Closure Relief Act of 2023 This bill allows additional hospitals to qualify as critical access hospitals (CAHs) that receive special payment under Medicare. 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. 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 or Medicaid beneficiaries; (2) has experienced financial losses for two consecutive years; and (3) attests to having a strategic plan to address financial solvency. The Government Accountability Office must study the effects of the bill's implementation. 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.