U.S. Senators Tina Smith, Jerry Moran Introduce Bipartisan Bill to Help Save Rural Hospitals

WASHINGTON – U.S. Senators Tina Smith (D-Minn.) and Jerry Moran (R-Kan.) introduced bipartisan legislation to expand a lifeline for rural hospitals facing closure. The Rural Emergency Hospital Improvement Act would remove barriers for Critical Access Hospitals (CAH) and rural hospitals to convert to a Rural Emergency Hospital designation under Medicare. These changes would help rural hospitals facing closure to receive federal financial assistance to remain open and serving their communities through emergency stabilizing care and obstetric care, rather than closing and forcing community members to travel further distances for emergency care. In Minnesota, more than one-third of rural health care systems were in the red as of 2019.

“Rural hospitals provide health care in areas where it isn’t otherwise easy to access, so when their doors close, communities are left with almost no options, and that’s dangerous. If you’re dealing with a medical emergency or you just went into labor, the last thing on your mind should be whether your local hospital is still open,” said Senator Smith. “This bill is about public safety. It will make sure that if a hospital is in truly dire straits, they can remain open for emergency care – including obstetric care.”

“Access to emergency health care saves lives and helps keep rural communities prospering,” said Senator Moran. “Too many rural hospitals in Kansas and across the country are struggling to keep their doors open, and this legislation offers those hospitals a lifeline. The Rural Emergency Hospital designation has already helped save numerous rural hospitals, and expanding access to this successful program is a common-sense way to make certain more hospitals stay open.”

The Medicare designation for a Rural Emergency Hospital was created in 2021 and offers certain rural hospitals the opportunity to convert and continue operating with limited services rather than closing. In Minnesota, Mahnomen Health Center (MHC) is the first hospital to apply for the designation to continue providing emergency services and outpatient services in the area. The hospital serves over 5,000 residents in Mahnomen County, including the White Earth Reservation. MHC reported operating losses totaling 26% in 2022, and its unpaid patient debt is highest in the state. Without this program, the hospital’s dire financial situation likely would’ve led to closure. With this program, the hospital is able to avoid the potential of closure due to financial concerns and remain available to the community for life-saving care.

The Rural Emergency Hospital Improvement Act would:

  1. Allow previously closed rural hospitals to re-open and apply for the Rural Emergency Hospital (REH) designation if they can demonstrate they met all eligibility requirements between Jan. 1, 2015 and Dec. 27, 2020.
  2. Direct the Secretary of Health and Human Services (HHS) to create a waiver program for facilities operating similarly to an REH in order to convert to an REH.
  3. Allow REH facilities to maintain or create a unit for inpatient psychiatric care and allow for limited inpatient rehabilitation services, and allow REH facilities to maintain obstetric units.
  4. Require the Centers for Medicare & Medicaid Services to provide additional funding for laboratory services.
  5. Clarify that REH facilities are eligible for Small Rural Hospital Improvement grants.
  6. Direct the Secretary of HHS to allow an REH to be eligible as a National Health Service Corp site.
  7. Authorize REH facilities to transfer patients from acute care to a Skilled Nursing Facility without leaving the hospital, in accordance with the Social Security Act.
  8. Allow an REH facility to revert back to a Critical Access Hospital to regain necessary provider status, only if the facility was designated a necessary provider prior to converting to REH.