Grassley, Casey Introduce Bill To Provide Rural Hospitals With Financial Stability And Security

Press Release

Sens. Chuck Grassley (R-Iowa) and Bob Casey (D-Pa.) are continuing their support for rural health care by introducing the Rural Hospital Support Act. Their bipartisan proposal seeks to permanently extend two key Medicare rural hospital programs and establish a new rebasing year -- preventing closures that would disrupt access to care for individuals in rural communities. Grassley last led a successful reauthorization of these programs with Sen. Chuck Schumer (D-N.Y.) in the 2018 Bipartisan Budget Act.

"These programs bring a lot of value for rural residents and taxpayers," Grassley said. "Small, rural hospitals offer good-quality health care at a cost that compares well with urban hospitals' cost. Congress should extend the programs that help keep the doors open for rural Medicare beneficiaries."

"Every American deserves reliable access to health care," Casey said. "Rural hospitals can be the difference between life and death in many parts of the U.S. Often, a rural hospital means not only safe, dependable access to health care and emergency health needs, but economic safety and stability for an entire community. This legislation takes an important step to maintain that lifeline, especially for older adults and lower income Americans. I will continue to work to bring federal funding to rural communities and make sure older Americans have the health care support they need no matter where they live."

Rural hospitals often provide care to patients who are older and have lower incomes compared to national averages, as well as patients who are more likely to rely on Medicare and Medicaid. In addition to being the main providers of care in their communities, many rural hospitals serve as economic anchors -- accounting for around 14 percent of total employment in rural areas. Rural hospitals need predictable and stable resources to ensure that they can continue to serve their communities and provide quality care.

The Rural Hospital Support Act would permanently extend the Medicare-dependent Hospital (MDH) and Low-Volume Hospital (LVH) designations, and it would establish a new rebasing year for Sole Community Hospitals (SCH) and MDHs based on 2016 data.

MDH designations help rural hospitals that otherwise would struggle to maintain financial stability under Medicare's fee schedule due to their small size and large share of Medicare beneficiaries. There are currently 174 MDHs nationwide, three of which are in Iowa. LVH designations similarly offer a more feasible payment formula to hospitals that treat a low number of beneficiaries. The formula takes into consideration the fixed costs of treating fewer patients relative to the typical payment system that favors high beneficiary volume. There are currently 633 LVHs nationwide, six of which are in Iowa. SCH designations support rural hospitals where Medicare beneficiaries are unable to access another hospital within a reasonable distance and time. There are currently 464 SCHs nationwide, seven of which are in Iowa.

By helping hospitals keep their doors open, MDH and LVH designations are the safety net providers for rural Americans and are extremely important to rural economies. Without an extension, MDH and LVH will expire October 1, 2022.

As part of this legislative effort, Grassley will continue to work to pass his bipartisan False Claims Amendments Act authorized with Sen. Patrick Leahy (D-Vt.) and others, which passed out of the Judiciary Committee last October. The legislation clarifies existing law after courts have determined that obviously fraudulent contracts do not trigger a false claim if the government continues to make payment. Up to 80 percent of all false claim recoveries come from the health care industry. Since the False Claims Act was modernized and strengthened by Grassley in 1986, it has been responsible for more than $70 billion in recoveries of taxpayer money lost to fraud.

This legislation does not change other rural hospital Medicare designations or programs including critical access hospitals (CAH), rural referral centers (RRC) or the new rural emergency hospitals (REH). REH, a Grassley-backed program passed in 2020, is currently being implemented by the Centers for Medicare and Medicaid Services (CMS). The voluntary REH designation offers regulatory flexibility and financial support to struggling rural hospitals that can no longer support inpatient services. These rural programs offer unique flexibility to ensure health care services are accessible in rural America.

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