Rural Hospital Closure Relief Act of 2021
Bill: S.644 | Sponsor: Sen. Durbin, Richard J. (D-IL)
Policy area: Health

Summary:
Rural Hospital Closure Relief Act of 2021
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.
In addition, the Center for Medicare and Medicaid Innovation must test a new delivery and payment model for rural hospitals that promotes financially sustainable access to care and must establish a corresponding transition process for CAHs.

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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rural Hospital Closure Relief Act of 
2021''.

SEC. 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) is amended--
            (1) in subsection (c)(2)--
                    (A) in subparagraph (B)(i)--
                            (i) in subclause (I), by striking at the 
                        end ``or'';
                            (ii) in subclause (II), by inserting at the 
                        end ``or''; and
                            (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 
                                2021 by the State as being a necessary 
                                provider of health care services to 
                                residents in the area;''; 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 2020; 
                                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 2019 or 2020;
                            ``(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 2021, an 
                                application for certification of the 
                                facility as a critical access hospital.
                    ``(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),'' after ``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 this section.
    (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)).

SEC. 3. CMI TESTING OF NEW RURAL HOSPITAL DELIVERY AND PAYMENT MODEL.

    Section 1115A of the Social Security Act (42 U.S.C. 1315a) is 
amended--
            (1) in subsection (b)(2)(A), by adding at the end the 
        following new sentence: ``The models selected under this 
        subparagraph shall include the testing of a new rural hospital 
        delivery and payment model (or models), as described in 
        subsection (h).''; and
            (2) by adding at the end the following new subsection:
    ``(h) Testing of New Rural Hospital Delivery and Payment Model.--
            ``(1) In general.--
                    ``(A) Testing.--The Secretary shall test the 
                implementation of a new rural hospital delivery and 
                payment model (or models) that the Secretary determines 
                would promote financially sustainable ways to ensure 
                patient access to care in rural communities, which may 
                include models under which such hospitals furnish 
                outpatient emergency care services 24 hours a day, 7 
                days a week for which payment is made under title XVIII 
                based on the amount determined under the prospective 
                payment system for hospital outpatient department 
                services under section 1833(t), plus a fixed rate for 
                the cost of furnishing the emergency services.
                    ``(B) Promulgation of regulations.--Not later than 
                3 years after the date of the enactment of this 
                subsection, the Secretary shall promulgate regulations 
                to test a new rural hospital delivery and payment model 
                (or models) described in subparagraph (A), unless 
                Congress enacts legislation that establishes such a 
                payment model (or models) prior to the promulgation of 
                regulations pursuant to this subparagraph.
            ``(2) Transition.--Effective beginning on the date on which 
        the testing of a new rural hospital delivery and payment model 
        (or models) described in paragraph (1)(A) is implemented under 
        this subsection or such a payment model (or models) is 
        established through the enactment of legislation described in 
        paragraph (1)(B), the Secretary shall provide a process under 
        which--
                    ``(A) all critical access hospitals may transition 
                to such new model or models under this subsection; and
                    ``(B) any facility that was designated as a 
                critical access hospital pursuant to a certification by 
                a State under section 1820(c)(2)(B)(i)(III) may revert 
                to the prospective payment model (or models) under 
                which the facility received payment under title XVIII 
                prior to being so designated.''.
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