Understanding HR771: Rural Health Care Access Act of 2025

The Rural Health Care Access Act of 2025 proposes changes to how rural hospitals can qualify for critical access hospital (CAH) status under Medicare. Currently, a hospital must be located more than 35 miles from another hospital, or 15 miles in mountainous areas, to qualify. Alternatively, they must have been certified as necessary providers before 2006. This bill eliminates these distance requirements, allowing states to designate rural hospitals as CAHs without considering how far apart they are from other hospitals. This change means that more rural hospitals could qualify for CAH status, which comes with certain benefits. For example, CAHs receive higher Medicare reimbursement rates, which can help them stay financially stable. The bill amends the Social Security Act to reflect these changes, specifically targeting the Medicare Rural Hospital Flexibility Program. The bill was introduced in the House of Representatives on January 28, 2025, and is currently being reviewed by the House Committee on Ways and Means. As of now, no further actions have been taken, and the bill is still in its early stages.

This bill could have a significant impact on healthcare access in rural areas. By making it easier for hospitals to qualify for CAH status, the bill aims to prevent hospital closures in underserved regions. This is important because rural hospitals often provide essential services, including emergency care, to communities that might otherwise have limited access to healthcare. For rural residents, the bill could mean better access to medical services and more stable local healthcare facilities. Hospitals that qualify for CAH status can receive higher payments from Medicare, which can help them maintain services and staffing levels. This financial stability is crucial for rural hospitals, which often struggle to stay open due to low patient volumes and high operating costs.

- Rural Hospital Preservation: Supporters argue that removing distance requirements will help more rural hospitals qualify for CAH status, preventing closures and maintaining access to healthcare in underserved areas. - State Flexibility: The bill gives states more control over healthcare decisions, allowing them to designate CAHs based on local needs rather than federal distance rules. - Improved Access to Care: Enhanced Medicare reimbursement rates for CAHs could help hospitals maintain services and staff, improving healthcare access in rural communities. - Economic Stability: By stabilizing rural hospitals financially, the bill could support local economies, as hospitals are often major employers in rural areas.

- Increased Medicare Costs: Critics worry that expanding CAH eligibility could lead to higher Medicare expenses, as more hospitals would receive enhanced payment rates. - Potential for Inefficiency: Without distance requirements, there may be concerns about unnecessary duplication of services, leading to inefficient use of resources. - Lack of Need-Based Criteria: Opponents argue that the bill lacks alternative criteria to ensure that designated hospitals truly serve areas with inadequate healthcare access. - Risk of Misallocation: There is a concern that states might designate facilities for financial gain rather than genuine healthcare improvements, potentially misusing Medicare resources.