HR 8245 — Rural Hospital Stabilization Act

CHANGES IN EXISTING LAW MADE BY THE BILL, AS
 REPORTED

 In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows.

 Changes in Existing Law Made by the Bill, as Reported

 In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

 SOCIAL SECURITY ACT

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 TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND
 DISABLED

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 Part A--Hospital Insurance Benefits for the Aged and
 Disabled

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 medicare rural hospital flexibility program

 Sec. 1820. (a) Establishment.--Any State that submits an 
application in accordance with subsection (b) may establish a 
medicare rural hospital flexibility program described in 
subsection (c).
 (b) Application.--A State may establish a medicare rural 
hospital flexibility program described in subsection (c) if the 
State submits to the Secretary at such time and in such form as 
the Secretary may require an application containing--
 (1) assurances that the State--
 (A) has developed, or is in the process of 
 developing, a State rural health care plan 
 that--
 (i) provides for the creation of 1 or 
 more rural health networks (as defined 
 in subsection (d)) in the State;
 (ii) promotes regionalization of 
 rural health services in the State; and
 (iii) improves access to hospital and 
 other health services for rural 
 residents of the State; and
 (B) has developed the rural health care plan 
 described in subparagraph (A) in consultation 
 with the hospital association of the State, 
 rural hospitals located in the State, and the 
 State Office of Rural Health (or, in the case 
 of a State in the process of developing such 
 plan, that assures the Secretary that the State 
 will consult with its State hospital 
 association, rural hospitals located in the 
 State, and the State Office of Rural Health in 
 developing such plan);
 (2) assurances that the State has designated 
 (consistent with the rural health care plan described 
 in paragraph (1)(A)), or is in the process of so 
 designating, rural nonprofit or public hospitals or 
 facilities located in the State as critical access 
 hospitals; and
 (3) such other information and assurances as the 
 Secretary may require.
 (c) Medicare Rural Hospital Flexibility Program Described.--
 (1) In general.--A State that has submitted an 
 application in accordance with subsection (b), may 
 establish a medicare rural hospital flexibility program 
 that provides that--
 (A) the State shall develop at least 1 rural 
 health network (as defined in subsection (d)) 
 in the State; and
 (B) at least 1 facility in the State shall be 
 designated as a critical access hospital in 
 accordance with paragraph (2).
 (2) State designation of facilities.--
 (A) In general.--A State may designate 1 or 
 more facilities as a critical access hospital 
 in accordance with subparagraphs (B), (C), and 
 (D).
 (B) Criteria for designation as critical 
 access hospital.--A State may designate a 
 facility as a critical access hospital if the 
 facility--
 (i) is a hospital that is located in 
 a county (or equivalent unit of local 
 government) in a rural area (as defined 
 in section 1886(d)(2)(D)) or is treated 
 as being located in a rural area 
 pursuant to section 1886(d)(8)(E), and 
 that--
 (I) is located more than a 
 35-mile drive (or, in the case 
 of mountainous terrain or in 
 areas with only secondary roads 
 available, a 15-mile drive) 
 from a hospital, or another 
 facility described in this 
 subsection; or
 (II) is certified before 
 January 1, 2006, by the State 
 as being a necessary provider 
 of health care services to 
 residents in the area;
 (ii) makes available 24-hour 
 emergency care services that a State 
 determines are necessary for ensuring 
 access to emergency care services in 
 each area served by a critical access 
 hospital;
 (iii) provides not more than 25 acute 
 care inpatient beds (meeting such 
 standards as the Secretary may 
 establish) for providing inpatient care 
 for a period that does not exceed, as 
 determined on an annual, average basis, 
 96 hours per patient;
 (iv) meets such staffing requirements 
 as would apply under section 1861(e) to 
 a hospital located in a rural area, 
 except that--
 (I) the facility need not 
 meet hospital standards 
 relating to the number of hours 
 during a day, or days during a 
 week, in which the facility 
 must be open and fully staffed, 
 except insofar as the facility 
 is required to make available 
 emergency care services as 
 determined under clause (ii) 
 and must have nursing services 
 available on a 24-hour basis, 
 but need not otherwise staff 
 the facility except when an 
 inpatient is present;
 (II) the facility may provide 
 any services otherwise required 
 to be provided by a full-time, 
 on site dietitian, pharmacist, 
 laboratory technician, medical 
 technologist, and radiological 
 technologist on a part-time, 
 off site basis under 
 arrangements as defined in 
 section 1861(w)(1); and
 (III) the inpatient care 
 described in clause (iii) may 
 be provided by a physician 
 assistant, nurse practitioner, 
 or clinical nurse specialist 
 subject to the oversight of a 
 physician who need not be 
 present in the facility; and
 (v) meets the requirements of section 
 1861(aa)(2)(I).
 (C) Recently closed facilities.--A State may 
 designate a facility as a critical access 
 hospital if the facility--
 (i) was a hospital that ceased 
 operations on or after the date that is 
 10 years before the date of the 
 enactment of this subparagraph; and
 (ii) as of the effective date of such 
 designation, meets the criteria for 
 designation under subparagraph (B).
 (D) Downsized facilities.--A State may 
 designate a health clinic or a health center 
 (as defined by the State) as a critical access 
 hospital if such clinic or center--
 (i) is licensed by the State as a 
 health clinic or a health center;
 (ii) was a hospital that was 
 downsized to a health clinic or health 
 center; and
 (iii) as of the effective date of 
 such designation, meets the criteria 
 for designation under subparagraph (B).
 (E) Authority to establish psychiatric and 
 rehabilitation distinct part units.--
 (i) In general.--Subject to the 
 succeeding provisions of this 
 subparagraph, a critical access 
 hospital may establish--
 (I) a psychiatric unit of the 
 hospital that is a distinct 
 part of the hospital; and
 (II) a rehabilitation unit of 
 the hospital that is a distinct 
 part of the hospital,
 if the distinct part meets the 
 requirements (including conditions of 
 participation) that would otherwise 
 apply to the distinct part if the 
 distinct part were established by a 
 subsection (d) hospital in accordance 
 with the matter following clause (v) of 
 section 1886(d)(1)(B), including any 
 regulations adopted by the Secretary 
 under such section.
 (ii) Limitation on number of beds.--
 The total number of beds that may be 
 established under clause (i) for a 
 distinct part unit may not exceed 10.
 (iii) Exclusion of beds from bed 
 count.--In determining the number of 
 beds of a critical access hospital for 
 purposes of applying the bed 
 limitations referred to in subparagraph 
 (B)(iii) and subsection (f), the 
 Secretary shall not take into account 
 any bed established under clause (i).
 (iv) Effect of failure to meet 
 requirements.--If a psychiatric or 
 rehabilitation unit established under 
 clause (i) does not meet the 
 requirements described in such clause 
 with respect to a cost reporting 
 period, no payment may be made under 
 this title to the hospital for services 
 furnished in such unit during such 
 period. Payment to the hospital for 
 services furnished in the unit may 
 resume only after the hospital has 
 demonstrated to the Secretary that the 
 unit meets such requirements.
 (d) Definition of Rural Health Network.--
 (1) In general.--In this section, the term ``rural 
 health network'' means, with respect to a State, an 
 organization consisting of--
 (A) at least 1 facility that the State has 
 designated or plans to designate as a critical 
 access hospital; and
 (B) at least 1 hospital that furnishes acute 
 care services.
 (2) Agreements.--
 (A) In general.--Each critical access 
 hospital that is a member of a rural health 
 network shall have an agreement with respect to 
 each item described in subparagraph (B) with at 
 least 1 hospital that is a member of the 
 network.
 (B) Items described.--The items described in 
 this subparagraph are the following:
 (i) Patient referral and transfer.
 (ii) The development and use of 
 communications systems including (where 
 feasible)--
 (I) telemetry systems; and
 (II) systems for electronic 
 sharing of patient data.
 (iii) The provision of emergency and 
 non-emergency transportation among the 
 facility and the hospital.
 (C) Credentialing and quality assurance.--
 Each critical access hospital that is a member 
 of a rural health network shall have an 
 agreement with respect to credentialing and 
 quality assurance with at least--
 (i) 1 hospital that is a member of 
 the network;
 (ii) 1 peer review organization or 
 equivalent entity; or
 (iii) 1 other appropriate and 
 qualified entity identified in the 
 State rural health care plan.
 (e) Certification by the Secretary.--The Secretary shall 
certify a facility as a critical access hospital if the 
facility--
 (1) is located in a State that has established a 
 medicare rural hospital flexibility program in 
 accordance with subsection (c);
 (2) is designated as a critical access hospital by 
 the State in which it is located; and
 (3) meets such other criteria as the Secretary may 
 require.
 (f) Permitting Maintenance of Swing Beds.--Nothing in this 
section shall be construed to prohibit a State from designating 
or the Secretary from certifying a facility as a critical 
access hospital solely because, at the time the facility 
applies to the State for designation as a critical access 
hospital, there is in effect an agreement between the facility 
and the Secretary under section 1883 under which the facility's 
inpatient hospital facilities are used for the provision of 
extended care services, so long as the total number of beds 
that may be used at any time for the furnishing of either such 
services or acute care inpatient services does not exceed 25 
beds. For purposes of the previous sentence, any bed of a unit 
of the facility that is licensed as a distinct-part skilled 
nursing facility at the time the facility applies to the State 
for designation as a critical access hospital shall not be 
counted.
 (g) Grants.--
 (1) Medicare rural hospital flexibility program.--The 
 Secretary may award grants to States that have 
 submitted applications in accordance with subsection 
 (b) for--
 (A) engaging in activities relating to 
 planning and implementing a rural health care 
 plan;
 (B) engaging in activities relating to 
 planning and implementing rural health 
 networks;
 (C) designating facilities as critical access 
 hospitals; and
 (D) providing support for critical access 
 hospitals for quality improvement, quality 
 reporting, performance improvements, and 
 benchmarking.
 (2) Rural emergency medical services.--
 (A) In general.--The Secretary may award 
 grants to States that have submitted 
 applications in accordance with subparagraph 
 (B) for the establishment or expansion of a 
 program for the provision of rural emergency 
 medical services.
 (B) Application.--An application is in 
 accordance with this subparagraph if the State 
 submits to the Secretary at such time and in 
 such form as the Secretary may require an 
 application containing the assurances described 
 in subparagraphs (A)(ii), (A)(iii), and (B) of 
 subsection (b)(1) and paragraph (3) of that 
 subsection.
 (3) Upgrading data systems.--
 (A) Grants to hospitals.--The Secretary may 
 award grants to hospitals that have submitted 
 applications in accordance with subparagraph 
 (C) to assist eligible small rural hospitals in 
 meeting the costs of implementing data systems 
 required to meet requirements established under 
 the medicare program pursuant to amendments 
 made by the Balanced Budget Act of 1997 and to 
 assist such hospitals in participating in 
 delivery system reforms under the provisions of 
 and amendments made by the Patient Protection 
 and Affordable Care Act, such as value-based 
 purchasing programs, accountable care 
 organizations under section 1899, the National 
 pilot program on payment bundling under section 
 1866D, and other delivery system reform 
 programs determined appropriate by the 
 Secretary.
 (B) Eligible small rural hospital defined.--
 For purposes of this paragraph, the term 
 ``eligible small rural hospital'' means a non-
 Federal, short-term general acute care hospital 
 that--
 (i) is located in a rural area (as 
 defined for purposes of section 
 1886(d)); and
 (ii) has less than 50 beds.
 (C) Application.--A hospital seeking a grant 
 under this paragraph shall submit an 
 application to the Secretary on or before such 
 date and in such form and manner as the 
 Secretary specifies.
 (D) Amount of grant.--A grant to a hospital 
 under this paragraph may not exceed $50,000.
 (E) Use of funds.--A hospital receiving a 
 grant under this paragraph may use the funds 
 for the purchase of computer software and 
 hardware, the education and training of 
 hospital staff on computer information systems, 
 to offset costs related to the implementation 
 of prospective payment systems and to 
 participate in delivery system reforms under 
 the provisions of and amendments made by the 
 Patient Protection and Affordable Care Act, 
 such as value-based purchasing programs, 
 accountable care organizations under section 
 1899, the National pilot program on payment 
 bundling under section 1866D, and other 
 delivery system reform programs determined 
 appropriate by the Secretary.
 (F) Reports.--
 (i) Information.--A hospital 
 receiving a grant under this section 
 shall furnish the Secretary with such 
 information as the Secretary may 
 require to evaluate the project for 
 which the grant is made and to ensure 
 that the grant is expended for the 
 purposes for which it is made.
 (ii) Timing of submission.--
 (I) Interim reports.--The 
 Secretary shall report to the 
 Committee on Ways and Means of 
 the House of Representatives 
 and the Committee on Finance of 
 the Senate at least annually on 
 the grant program established 
 under this section, including 
 in such report information on 
 the number of grants made, the 
 nature of the projects 
 involved, the geographic 
 distribution of grant 
 recipients, and such other 
 matters as the Secretary deems 
 appropriate.
 (II) Final report.--The 
 Secretary shall submit a final 
 report to such committees not 
 later than 180 days after the 
 completion of all of the 
 projects for which a grant is 
 made under this section.
 (4) Additional requirements with respect to flex 
 grants.--With respect to grants awarded under paragraph 
 (1) or (2) from funds appropriated for fiscal year 2005 
 and subsequent fiscal years--
 (A) Consultation with the state hospital 
 association and rural hospitals on the most 
 appropriate ways to use grants.--A State shall 
 consult with the hospital association of such 
 State and rural hospitals located in such State 
 on the most appropriate ways to use the funds 
 under such grant.
 (B) Limitation on use of grant funds for 
 administrative expenses.--A State may not 
 expend more than the lesser of--
 (i) 15 percent of the amount of the 
 grant for administrative expenses; or
 (ii) the State's federally negotiated 
 indirect rate for administering the 
 grant.
 (5) Use of funds for federal administrative 
 expenses.--Of the total amount appropriated for grants 
 under paragraphs (1) and (2) for a fiscal year (for 
 each of fiscal years 2005 through 2008) and, of the 
 total amount appropriated for grants under paragraphs 
 (1), (2), and (6) for a fiscal year (beginning with 
 fiscal year 2009), up to 5 percent of such amount shall 
 be available to the Health Resources and Services 
 Administration for purposes of administering such 
 grants.
 (6) Providing mental health services and other health 
 services to veterans and other residents of rural 
 areas.--
 (A) Grants to states.--The Secretary may 
 award grants to States that have submitted 
 applications in accordance with subparagraph 
 (B) for increasing the delivery of mental 
 health services or other health care services 
 deemed necessary to meet the needs of veterans 
 of Operation Iraqi Freedom and Operation 
 Enduring Freedom living in rural areas (as 
 defined for purposes of section 1886(d) and 
 including areas that are rural census tracks, 
 as defined by the Administrator of the Health 
 Resources and Services Administration), 
 including for the provision of crisis 
 intervention services and the detection of 
 post-traumatic stress disorder, traumatic brain 
 injury, and other signature injuries of 
 veterans of Operation Iraqi Freedom and 
 Operation Enduring Freedom, and for referral of 
 such veterans to medical facilities operated by 
 the Department of Veterans Affairs, and for the 
 delivery of such services to other residents of 
 such rural areas.
 (B) Application.--
 (i) In general.--An application is in 
 accordance with this subparagraph if 
 the State submits to the Secretary at 
 such time and in such form as the 
 Secretary may require an application 
 containing the assurances described in 
 subparagraphs (A)(ii) and (A)(iii) of 
 subsection (b)(1).
 (ii) Consideration of regional 
 approaches, networks, or technology.--
 The Secretary may, as appropriate in 
 awarding grants to States under 
 subparagraph (A), consider whether the 
 application submitted by a State under 
 this subparagraph includes 1 or more 
 proposals that utilize regional 
 approaches, networks, health 
 information technology, telehealth, or 
 telemedicine to deliver services 
 described in subparagraph (A) to 
 individuals described in that 
 subparagraph. For purposes of this 
 clause, a network may, as the Secretary 
 determines appropriate, include 
 Federally qualified health centers (as 
 defined in section 1861(aa)(4)), rural 
 health clinics (as defined in section 
 1861(aa)(2)), home health agencies (as 
 defined in section 1861(o)), community 
 mental health centers (as defined in 
 section 1861(ff)(3)(B)) and other 
 providers of mental health services, 
 pharmacists, local government, and 
 other providers deemed necessary to 
 meet the needs of veterans.
 (iii) Coordination at local level.--
 The Secretary shall require, as 
 appropriate, a State to demonstrate 
 consultation with the hospital 
 association of such State, rural 
 hospitals located in such State, 
 providers of mental health services, or 
 other appropriate stakeholders for the 
 provision of services under a grant 
 awarded under this paragraph.
 (iv) Special consideration of certain 
 applications.--In awarding grants to 
 States under subparagraph (A), the 
 Secretary shall give special 
 consideration to applications submitted 
 by States in which veterans make up a 
 high percentage (as determined by the 
 Secretary) of the total population of 
 the State. Such consideration shall be 
 given without regard to the number of 
 veterans of Operation Iraqi Freedom and 
 Operation Enduring Freedom living in 
 the areas in which mental health 
 services and other health care services 
 would be delivered under the 
 application.
 (C) Coordination with va.--The Secretary 
 shall, as appropriate, consult with the 
 Director of the Office of Rural Health of the 
 Department of Veterans Affairs in awarding and 
 administering grants to States under 
 subparagraph (A).
 (D) Use of funds.--A State awarded a grant 
 under this paragraph may, as appropriate, use 
 the funds to reimburse providers of services 
 described in subparagraph (A) to individuals 
 described in that subparagraph.
 (E) Limitation on use of grant funds for 
 administrative expenses.--A State awarded a 
 grant under this paragraph may not expend more 
 than 15 percent of the amount of the grant for 
 administrative expenses.
 (F) Independent evaluation and final 
 report.--The Secretary shall provide for an 
 independent evaluation of the grants awarded 
 under subparagraph (A). Not later than 1 year 
 after the date on which the last grant is 
 awarded to a State under such subparagraph, the 
 Secretary shall submit a report to Congress on 
 such evaluation. Such report shall include an 
 assessment of the impact of such grants on 
 increasing the delivery of mental health 
 services and other health services to veterans 
 of the United States Armed Forces living in 
 rural areas (as so defined and including such 
 areas that are rural census tracks), with 
 particular emphasis on the impact of such 
 grants on the delivery of such services to 
 veterans of Operation Enduring Freedom and 
 Operation Iraqi Freedom, and to other 
 individuals living in such rural areas.
 (7) Critical access hospitals transitioning to 
 skilled nursing facilities and assisted living 
 facilities.--
 (A) Grants.--The Secretary may award grants 
 to eligible critical access hospitals that have 
 submitted applications in accordance with 
 subparagraph (B) for assisting such hospitals 
 in the transition to skilled nursing facilities 
 and assisted living facilities.
 (B) Application.--An applicable critical 
 access hospital seeking a grant under this 
 paragraph shall submit an application to the 
 Secretary on or before such date and in such 
 form and manner as the Secretary specifies.
 (C) Additional requirements.--The Secretary 
 may not award a grant under this paragraph to 
 an eligible critical access hospital unless--
 (i) local organizations or the State 
 in which the hospital is located 
 provides matching funds; and
 (ii) the hospital provides assurances 
 that it will surrender critical access 
 hospital status under this title within 
 180 days of receiving the grant.
 (D) Amount of grant.--A grant to an eligible 
 critical access hospital under this paragraph 
 may not exceed $1,000,000.
 (E) Funding.--There are appropriated from the 
 Federal Hospital Insurance Trust Fund under 
 section 1817 for making grants under this 
 paragraph, $5,000,000 for fiscal year 2008.
 (F) Eligible critical access hospital 
 defined.--For purposes of this paragraph, the 
 term ``eligible critical access hospital'' 
 means a critical access hospital that has an 
 average daily acute census of less than 0.5 and 
 an average daily swing bed census of greater 
 than 10.0.
 (8) Rural hospital stabilization pilot program.--
 (A) In general.--Beginning January 1, 2026, 
 the Secretary, acting through the Director of 
 the Office of Rural Health Policy, shall award 
 grants to--
 (i) hospitals, critical access 
 hospitals, and rural emergency 
 hospitals that are located in a rural 
 area, as such term is used for purposes 
 of section 711 of this Act (in this 
 paragraph referred to as ``rural 
 hospitals'') that have submitted 
 applications to the Secretary, for 
 purposes of assisting such hospitals in 
 ensuring local access to services; and
 (ii) experienced technical assistance 
 providers that have submitted 
 applications to the Secretary, for 
 purposes of assisting such rural 
 hospitals in planning to apply for 
 grants under this paragraph and using 
 any amounts received under such a 
 grant.
 (B) Prioritization factors.--In making grants 
 to rural hospitals under this paragraph for a 
 fiscal year (and determining the amount of each 
 such grant), the Secretary shall consider the 
 following factors:
 (i) The average daily census of the 
 hospital.
 (ii) The distance between the 
 hospital and the next nearest hospital.
 (iii) The financial circumstances of 
 the hospital, as determined by such 
 hospital's most recently filed Medicare 
 cost report (or other applicable source 
 of information).
 (iv) The risk that the hospital will 
 close.
 (v) The risk that the hospital will 
 reduce or stop offering a class of 
 services.
 (C) Use of funds.--
 (i) Hospitals.--Amounts received by a 
 rural hospital under a grant under this 
 paragraph shall be used to sustain, 
 enhance, or expand the classes of 
 services offered by such hospital, or 
 to begin offering a new class of 
 service, and may be used for--
 (I) minor renovations to 
 buildings;
 (II) training with respect to 
 the delivery of new or existing 
 services;
 (III) recruiting or hiring 
 new staff or supplementing 
 compensation of existing staff; 
 and
 (IV) equipment acquisition or 
 refurbishment.
 (ii) Experienced technical assistance 
 providers.--Amounts received by an 
 experienced technical assistance 
 provider under a grant under this 
 paragraph shall be used to assist rural 
 hospitals--
 (I) in applying for a grant 
 under this paragraph; and
 (II) with respect to a rural 
 hospital that has been awarded 
 a grant under this paragraph, 
 in using amounts received under 
 such grant in accordance with 
 the requirements of clause (i).
 (D) Reports to congress.--
 (i) Initial report.--Not later than 
 January 1, 2029, the Secretary shall 
 submit to Congress a report on the 
 grants awarded under this paragraph 
 that includes the following 
 information:
 (I) The names of all 
 experienced technical 
 assistance providers that 
 received a grant under this 
 paragraph and, with respect to 
 each such experienced technical 
 assistance provider, an 
 analysis of the use of the 
 amounts received under such 
 grant.
 (II) The names and locations 
 of all rural hospitals that 
 received a grant under this 
 paragraph and, with respect to 
 each such hospital--
 (aa) the use of the 
 amounts received under 
 such grant;
 (bb) an analysis of 
 the financial 
 circumstances of such 
 hospital, as determined 
 by such hospital's most 
 recently filed Medicare 
 cost report (or other 
 applicable source of 
 information)--
 (AA) at the 
 time of the 
 receipt of such 
 grant; and
 (BB) at the 
 time the report 
 is submitted 
 under this 
 clause;
 (cc) an analysis of 
 the classes of services 
 offered by the 
 hospital--
 (AA) prior to 
 the receipt of 
 such grant; and
 (BB) 
 following such 
 receipt, as 
 determined at 
 the time the 
 report is 
 submitted under 
 this clause; 
 and
 (dd) an analysis of 
 any new classes of 
 services offered by the 
 hospital following the 
 receipt of such grant.
 (ii) Subsequent report.--Not later 
 than 2 years after the initial report 
 is submitted under clause (i), the 
 Secretary shall submit to Congress a 
 subsequent report on the grants awarded 
 under this paragraph that includes 
 updates to the information described in 
 subclauses (I) and (II) of such clause.
 (E) Funding.--There are authorized to be 
 appropriated from the Federal Hospital 
 Insurance Trust Fund under section 1817 for 
 making grants under this paragraph, $20,000,000 
 for each of fiscal years 2026 through 2029, to 
 remain available until expended.
 (h) Grandfathering Provisions.--
 (1) In general.--Any medical assistance facility 
 operating in Montana and any rural primary care 
 hospital designated by the Secretary under this section 
 prior to the date of the enactment of the Balanced 
 Budget Act of 1997 shall be deemed to have been 
 certified by the Secretary under subsection (e) as a 
 critical access hospital if such facility or hospital 
 is otherwise eligible to be designated by the State as 
 a critical access hospital under subsection (c).
 (2) Continuation of medical assistance facility and 
 rural primary care hospital terms.--Notwithstanding any 
 other provision of this title, with respect to any 
 medical assistance facility or rural primary care 
 hospital described in paragraph (1), any reference in 
 this title to a ``critical access hospital'' shall be 
 deemed to be a reference to a ``medical assistance 
 facility'' or ``rural primary care hospital''.
 (3) State authority to waive 35-mile rule.--In the 
 case of a facility that was designated as a critical 
 access hospital before January 1, 2006, and was 
 certified by the State as being a necessary provider of 
 health care services to residents in the area under 
 subsection (c)(2)(B)(i)(II), as in effect before such 
 date, the authority under such subsection with respect 
 to any redesignation of such facility shall continue to 
 apply notwithstanding the amendment made by section 
 405(h)(1) of the Medicare Prescription Drug, 
 Improvement, and Modernization Act of 2003.
 (i) Waiver of Conflicting Part A Provisions.--The Secretary 
is authorized to waive such provisions of this part and part D 
as are necessary to conduct the program established under this 
section.
 (j) Authorization of Appropriations.--There are authorized to 
be appropriated from the Federal Hospital Insurance Trust Fund 
for making grants to all States under subsection (g), 
$25,000,000 in each of the fiscal years 1998 through 2002, for 
making grants to all States under paragraphs (1) and (2) of 
subsection (g), $35,000,000 in each of fiscal years 2005 
through 2008, for making grants to all States under paragraphs 
(1) and (2) of subsection (g), $55,000,000 in each of fiscal 
years 2009 and 2010, for making grants to all States under 
paragraph (6) of subsection (g), $50,000,000 in each of fiscal 
years 2009 and 2010, to remain available until expended and for 
making grants to all States under subsection (g), such sums as 
may be necessary in each of fiscal years 2011 and 2012, to 
remain available until expended.

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 VII. DISSENTING VIEWS

 H.R. 8245, the Rural Hospital Stabilization Pilot Program 
(Feenstra, R-IA), requires the Secretary of Health and Human 
Services (HHS) to award $80 million in grants from the Medicare 
Hospital Insurance (HI) Trust Fund to Critical Access Hospitals 
(CAHs), hospitals and Rural Emergency Hospitals (REHs) that are 
located in rural areas beginning on January 1, 2026 and at a 
rate of $20 million for each fiscal year from 2026 to 2029. The 
grants are also eligible to be disbursed to ``experienced 
technical assistance providers'' to help rural hospitals apply 
for and use the grants. No rules govern how many hospitals 
receive the grants or the amount of grant funding the hospital 
receives, nor is there a definition of experienced technical 
assistance providers, which could encompass a number of 
businesses that have interests in rural hospitals. Under this 
provision, the Secretary has the discretion to elect to award 
the entire amount to a handful of hospitals.
 For grants directed to hospitals, the Secretary must 
consider factors including the daily census of the hospital, 
the distance between the hospital and the next nearest 
hospital, the financial circumstances of the hospital, and the 
risk that the hospital will close or reduce services lines. 
Hospitals are required to use the funding to sustain, enhance, 
or expand their current services or offer new services. It is 
unclear how the Secretary will ensure those dollars are going 
to those services. Few parameters speak to which entities in 
rural communities should receive the grants or the size of the 
grants.
 The grants to technical assistance providers are designed 
to help hospitals apply for the grants and assist the hospitals 
in using the grants. There are no other requirements on the 
technical assistance providers, nor is there a limit on the 
amount of funding these entities can receive.
 CAHs are already paid at 101 percent of their costs and 
REHs receive generous monthly payments and per-service payment 
bumps; these grants would be on top of their generous payment 
rates. The Medicare Payment Advisory Commission (MedPAC) has 
recently expressed concern about the financial stability of 
safety net hospitals, noting that that their Medicare payments 
are insufficient. However, CAHs are paid at payment rates over 
cost, so it is unclear why additional Medicare Trust Fund 
dollars are being allocated to these hospitals and not the 
safety net hospitals--which include rural, community, and urban 
underserved hospitals--that data show need additional 
support.\1\ Under then-Chairman Richard Neal, the Ways and 
Means Committee established a bipartisan Rural and Underserved 
Task Force that worked on the similar challenges that afflict 
both the rural and underserved communities. Rather than 
building on this bipartisan work, this bill ignores the key 
conclusions of that work--that rural and underserved 
communities face similar obstacles, and policies should address 
problems faced both in rural and underserved. Safety-net 
hospitals that are not located in rural areas are excluded from 
applying for these grants.
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 \1\https://democrats-waysandmeans.house.gov/sites/evo-subsites/
democrats-waysandmeans.
house.gov/files/documents/
WMD%20Health%20Equity%20Report_07.2020_FINAL.pdf.
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 Additionally, there is a significant private equity (PE) 
presence in rural hospitals, and the bill does not effectively 
ensure that these grants do not simply pad PE profits. PE 
ownership of rural hospitals and facilities is growing and 
poses significant risks to patients. At least 26 percent of all 
PE-owned hospitals serve rural populations, and 16 CAHs are now 
PE-owned.\2\ PE-backed health care companies accounted for over 
one-fifth of all health care bankruptcies in 2023 and three of 
six hospital closures in 2021 and 2022 were backed by PE.\3\\4\ 
PE has a track record of squeezing resources out of facilities 
by raising administrative costs and siphoning money out through 
related parties. In addition, across care types, research show 
that PE-owned facilities have lower quality of care and worse 
patient outcomes--as a result of profit-driven medical 
decisions.\5\\6\
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 \2\https://pestakeholder.org/private-equity-hospital-tracker/.
 \3\https://pestakeholder.org/private-equity-healthcare-
bankruptcies-are-on-the-rise/.
 \4\https://pestakeholder.org/news/new-data-reveals-extent-of-pe-
ownership-of-rural-hospitals/.
 \5\https://jamanetwork.com/journals/jama/article-abstract/2813379.
 \6\https://www.washingtonpost.com/opinions/2024/01/10/private-
equity-health-care-costs-acquisitions/.
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 Richard E. Neal.