Bipartisan bill would extend key Medicare rural hospital programs

WASHINGTON, D.C. – Today, U.S. Senators Peter Welch (D-Vt.) and Chuck Grassley (R-Iowa), members of the Senate Finance Committee, introduced the bipartisan Rural Hospital Support Act, legislation to prevent rural hospital closures by extending and modernizing critical Medicare programs. The Senators’ legislation would permanently extend the Medicare-Dependent Hospital (MDH) program to ensure eligible rural hospitals are reimbursed for their costs. The bill would also permanently extend the Low-Volume Hospital (LVH) program to level the playing field for rural hospitals whose operating costs often outpace their revenue.  

Rural hospitals provide critical care for patients, many of whom rely on Medicare and Medicaid. These hospitals also serve as economic anchors – accounting for around 14% of total employment in rural areas. 

“Rural hospitals provide essential care to patients in rural communities, including to folks who rely on Medicare and Medicaid. In Vermont, rural hospitals are also job creators and economic drivers. But across the country, rural hospitals are struggling to stay open, and they need a lifeline,” said Senator Welch. “Our bipartisan legislation will help ensure rural hospitals are reimbursed for resources they need to continue delivering vital care in our rural communities.” 

“As a lifelong resident of rural Iowa, I know the importance of having access to health care services close to home. In addition to providing life-saving care, rural hospitals are a source of economic security for many rural communities,” said Senator Grassley. “Our bipartisan bill will ensure the continuity of these vital programs and help keep rural hospitals’ doors open.”  

The MDH and LVH programs have supported rural communities for decades. The programs were last extended as part of the Continuing Resolution on December 20, 2024, and would expire on March 31, 2025, without congressional action.  

The Rural Hospital Support Act does not change other rural hospital Medicare programs including critical access hospitals (CAH), rural referral centers (RRC), Rural Community Hospital Demonstration, or the new voluntary rural emergency hospitals (REH). Each of these rural programs offer unique flexibilities to ensure health care services are accessible in rural America. Additionally, the bill would also update the rebasing year for Sole Community Hospitals (SCH) and MDHs to allow hospitals to tie reimbursement estimates to more recent trends in costs.    

In addition to Sens. Welch and Grassley, the bill is cosponsored by Senators Shelley Moore Capito (R-W.Va.), Tim Kaine (D-Va.), Roger Wicker (R-Miss.), Jeanne Shaheen (D-N.H.), Jerry Moran (R-Kan.), Tina Smith (D-Minn.), Cindy Hyde-Smith (R-Miss.), John Fetterman (D-Pa.), John Boozman (R-Ark.), Mark Kelly (D-Ariz.), Roger Marshall (R-Kan.) and Gary Peters (D-Mich.).  

The Rural Hospital Support Act has garnered support from national stakeholders, including the Alliance for Rural Hospital Access, American Hospital Association, Iowa Hospital Association, MercyOne, National Rural Health Association, and UnityPoint Health. 

Learn more about the Rural Hospital Support Act. 

Read the full text of the bill. 

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