119-s502

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 502 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 502

 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.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 February 10, 2025

 Mr. Durbin (for himself, Mr. Lankford, and Ms. Smith) introduced the 
 following bill; which was read twice and referred to the Committee on 
 Finance

_______________________________________________________________________

 A BILL

 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 
2025''.

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 ``or'' at 
 the end;
            (ii) in subclause
            (II) , by inserting ``or'' 
 at the end; 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 2025, and before the date that is 9 
 years after the date of enactment of 
 this subclause, 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) , or a 
 subsection
            (d) hospital (as defined in 

section 1886
            (d) (1)
        (B) );
 ``
            (ii) is located in a rural area, as 
 defined in 

section 1886
            (d) (2)
            (D) , or a rural 
 census tract of a metropolitan statistical area 
 (as determined under the most recent 
 modification of the Goldsmith Modification, 
 originally published in the Federal Register on 
 February 27, 1992 (57 Fed. Reg. 6725));
 ``
            (iii) 
            (I) is located--
 ``

    (aa) in a county that has a 
 percentage of individuals with income 
 at or below the Federal poverty level 
 in 2023 or 2024 that is higher than the 
 national or statewide average in that 
 year; 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 in 2023 or 2024 that is higher 
 than the national or statewide average in that 
 year;
 ``
            (iv) has attested to the Secretary that 
 the hospital--
 ``
            (I) was operating as of the date 
 of enactment of this subparagraph; and
 ``
            (II) had 2 consecutive years of 
 negative operating margins preceding 
 the date of certification described in 
 subparagraph
        (B)
            (i) 
            (III) , as defined by 
 the Secretary in the regulations or 
 program instruction issued pursuant to 
 

section 2

    (b) of the Rural Hospital 
 Closure Relief Act of 2025; and
 ``
            (v) submits to the Secretary, at such 
 time and in such manner as the Secretary may 
 require, an application for certification of 
 the facility as a critical access hospital, 
 including an attestation outlining--
 ``
            (I) the good governance 
 qualifications and strategic plan for 
 multi-year financial solvency of the 
 hospital; and
 ``
            (II) the hospital's commitment to 
 open and maintain, for the duration of 
 the hospital's designation as a 
 critical access hospital under this 
 section, a new service line or expanded 
 service capacity for a service that is 
 in high demand or limited supply in the 
 hospital's service area (determined 
 based on the hospital's most recent 
 community health needs assessment under 
 

section 501

    (r)

    (3) of the Internal 
 Revenue Code of 1986 (or other 
 comparable assessment)), such as 
 obstetrics or behavioral health care 
 services.
 ``
        (G) Limitation on certain designations.--
 ``
            (i) In general.--Subject to clauses
            (ii) and
            (iii) , 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 120 
 facilities as critical access 
 hospitals; and
 ``
            (II) within any one State, more 
 than 5 facilities as critical access 
 hospitals.
 ``
            (ii) Process.--The Secretary shall follow 
 the following process in carrying out clause
            (i) with respect to each year in which the 
 Secretary determines that the limitation under 
 clause
            (i) 
            (I) has not been reached:
 ``
            (I) Initial assessment.--The 
 Secretary shall conduct an initial 
 assessment of the total number of 
 hospitals described in paragraph

    (2)
        (F) .
 ``
            (II) Initial allocation.--Of the 
 total number of designations available 
 under clause
            (i) , the Secretary shall 
 allocate 1 for a hospital in each State 
 that the Secretary determines (based on 
 the initial assessment under subclause
            (I) ) has one or more hospitals 
 described in paragraph

    (2)
        (F) .
 ``
            (III) Remaining allocation.--Of 
 the total number of designations 
 available under clause
            (i) , after 
 application of subclause
            (II) , the 
 Secretary shall allocate the remaining 
 number on a proportional basis based on 
 the total number of hospitals described 
 in paragraph

    (2)
        (F) in each State that 
 are eligible (as determined based on 
 the initial assessment under subclause
            (I) ).
 ``
            (iii) Sunset.--Effective beginning on the 
 date that is 9 years after the date of 
 enactment of this subparagraph, the Secretary 
 may not certify a hospital as a critical access 
 hospital pursuant to a certification by a State 
 under subparagraph
        (B)
            (i) 
            (III) .
 ``
        (H) Information submission requirements for 
 hospitals certified pursuant to rural hospital closure 
 relief act.--
 ``
            (i) In general.--A critical access 
 hospital that is certified under subsection

    (e) pursuant to a certification by a State under 
 subparagraph
        (B)
            (i) 
            (III) shall submit to the 
 Secretary the following at a time, and in a 
 manner, specified by the Secretary:
 ``
            (I) Reports.--Reports containing 
 such information as the Secretary may 
 specify with respect to items and 
 services furnished as part of the new 
 service line or expanded service 
 capacity for a service as described in 
 the attestation submitted by the 
 critical access hospital under 
 subparagraph
        (F)
            (v) 
            (II) . To the extent 
 practicable, the Secretary shall align 
 such reporting with other reporting 
 requirements applicable to critical 
 access hospitals under this subsection.
 ``
            (II) Notice.--If the critical 
 access hospital materially changes the 
 new service line or expanded capacity 
 for a service as so described, notice 
 of such changes along with a plan to 
 satisfactorily maintain access to care 
 (as determined by the Secretary).
 ``
            (ii) Revocation of certification for 
 noncompliance.--If the Secretary determines 
 that a critical access hospital described in 
 clause
            (i) has failed to submit an annual 
 report required under subclause
            (I) of such 
 clause or a notice required under subclause
            (II) of such clause, the Secretary may, as the 
 Secretary determines appropriate, revoke the 
 certification of the critical access hospital 
 under subsection

    (e) .''; and

    (2) in subsection

    (e) , by inserting ``, subject to 
 subsection
            (c) (2)
        (G) ,'' after ``The Secretary shall''.

    (b) Implementation.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Health and Human Services shall 
issue final regulations or program instruction to carry out subsection

    (a) .
            (c) Clarification Regarding Facilities That Meet Distance or Other 
Criteria and Application of Other Criteria.--Nothing in this section 
shall affect--

    (1) the application of criteria for designation as a 
 critical access hospital described in subclause
            (I) or
            (II) of 
 

section 1820
            (c) (2)
        (B)
            (i) of the Social Security Act (42 U.S.C. 
 1395i-4
            (c) (2)
        (B)
            (i) ); or

    (2) the application of criteria for designation as a 
 critical access hospital described in clauses
            (ii) through
            (v) of 

section 1820
            (c) (2)
        (B) of the Social Security Act (42 U.S.C. 
 1395i-4
            (c) (2)
        (B) ).
            (d) GAO Study and Report.--

    (1) Study.--The Comptroller General of the United States 
 (in this section referred to as the ``Comptroller General'') 
 shall conduct a study on the implementation of the amendments 
 made by subsection

    (a) . To the extent such data are available 
 and reliable, such study shall include--
        (A) an analysis of--
            (i) 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) ;
            (ii) an analysis of the financial status 
 and outlook for such facilities based on their 
 designation as a critical access hospital 
 pursuant to such section; and
            (iii) an analysis of any increase in 
 expenditures under the Medicare program under 
 title XVIII of the Social Security Act (42 
 U.S.C. 1395 et seq.) as a result of such 
 designation, relative to the expected baseline 
 expenditures under the Medicare program if such 
 facilities had not received such designation; 
 and
        (B) an assessment of whether the authority to 
 designate facilities as critical access hospitals 
 pursuant to such 

section 1820
            (c) (2)
        (B)
            (i) 
            (III) promotes 
 access to care in rural areas.

    (2) Report.--Not later than 6 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.

SEC. 3. MEDPAC STUDY AND REPORT ON PAYMENT SYSTEMS FOR RURAL HOSPITALS.

    (a) Study.--The Medicare Payment Advisory Commission (in this 
section referred to as the ``Commission'') shall conduct a study, using 
data from 2018 through 2028, on payment systems for rural hospitals 
under the Medicare program under title XVIII of the Social Security Act 
(42 U.S.C. 1395 et seq.). Such study shall include an analysis of--

    (1) facilities designated as critical access hospitals 
 pursuant to 

section 1820
            (c) (2)
        (B)
            (i) 
            (III) of the Social 
 Security Act, as added by 

section 2

    (a) ;

    (2) features of payment systems for rural hospitals, 
 including value-based payment systems, that would--
        (A) ensure financial sustainability for the 
 Medicare program; and
        (B) preserve access to care for Medicare 
 beneficiaries; and

    (3) if the Commission recommends any new payment system for 
 rural hospitals under the Medicare program, to the extent 
 feasible, the impacts of transition from existing payment 
 systems to such new payment system.

    (b) Report.--Not later than 8 years after the date of enactment of 
this Act, the Commission shall submit to Congress a report on the study 
conducted under subsection

    (a) , together with recommendations for such 
legislation and administrative action as the Commission determines 
appropriate.
            (c) Definition of Rural Hospital.--In this section, the term 
``rural hospital'' means--

    (1) a critical access hospital (as defined in 

section 1861
            (mm) (1) of the Social Security Act (42 U.S.C. 
 1395x
            (mm) (1) ));

    (2) a subsection
            (d) hospital (as defined in 

section 1886
            (d) (1)
        (B) of the Social Security Act (42 U.S.C. 
 1395ww
            (d) (1)
        (B) )) that is located in a rural census tract of a 
 metropolitan statistical area (as determined under the most 
 recent modification of the Goldsmith Modification, originally 
 published in the Federal Register on February 27, 1992 (57 Fed. 
 Reg. 6725));

    (3) a sole community hospital (as defined in 

section 1886
            (d) (5)
            (D) 
            (iii) ) of the Social Security Act (42 U.S.C. 
 1395ww
            (d) (5)
            (D) 
            (iii) ));

    (4) a medicare dependent, small rural hospital (as defined 
 in 

section 1886
            (d) (5)
        (G)
            (iv) of the Social Security Act (42 
 U.S.C. 1395ww
            (d) (5)
        (G)
            (iv) )); and

    (5) a low-volume hospital (as defined in 

section 1886
            (d) (12)
            (C) 
            (i) of the Social Security Act (42 U.S.C. 
 1395ww
            (d) (12)
            (C) 
            (i) )).

SEC. 4. SUNSET.

 Not later than 9 years after the date of enactment of this Act, the 
Secretary shall establish a mechanism and provide guidance and 
technical assistance under which 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) of the Social Security Act, as added by 

section 2

    (a) , may transition within 1 year to one of the following 
payment models:

    (1) Such new model or models recommended by the Medicare 
 Payment Advisory Commission in the report submitted under 
 

section 3.

    (2) The prospective payment model (or models) under which 
 the facility received payment under title XVIII of the Social 
 Security Act (42 U.S.C. 1395 et seq.) prior to being so 
 designated pursuant to such certification.

    (3) Payment as a rural emergency hospital under 

section 1834
            (x) of the Social Security Act (42 U.S.C. 1395m
            (x) ).
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