Rural Hospital Closure Relief Act of 2025
Sponsored By: Senator Richard Durbin
Introduced
Summary
Temporarily lets more small, rural hospitals become Medicare Critical Access Hospitals to help keep local services and stabilize finances. It creates a new, limited pathway for eligible struggling hospitals that serve high-need communities and ties the change to studies and a nine-year sunset.
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- Small rural hospitals that serve Health Professional Shortage Areas or high-poverty counties and that had two consecutive years of financial losses can apply for the new CAH pathway. They must submit governance and multi-year solvency plans and commit to adding or maintaining a high-demand service such as obstetrics or behavioral health.
- Patients and local communities may keep or regain services when nearby hospitals qualify for CAH payments that can improve short-term financial viability. New CAH hospitals must report on the added service and notify regulators of material changes.
- The law limits new designations to 120 facilities nationwide and no more than 5 per State and sunsets the pathway after 9 years. It also directs the Government Accountability Office (GAO) and the Medicare Payment Advisory Commission (Medicare Payment Advisory Commission (MedPAC)) to study impacts and requires the Secretary of Health and Human Services to issue implementation guidance and transition rules.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 2 benefits, 0 costs, 1 mixed.
GAO study on rural hospital designations
If enacted, the bill would require the Government Accountability Office to study how the new State pathway was used. GAO must report within 6 years on which facilities were designated, their financial outlook tied to designation, any Medicare spending increases from designation, and whether the pathway improved rural access to care.
Temporary state pathway for rural hospitals
If enacted, this bill would let States certify some struggling rural hospitals so HHS can approve them as critical access hospitals (CAHs). Hospitals must be in a rural area, meet 2023 or 2024 poverty, shortage, or inpatient-day tests, show two straight years of negative operating margins, and apply with a solvency plan and a promise to open or expand a high‑need service (for example, obstetrics or behavioral health). No more than 120 hospitals nationwide and no more than 5 per State could get this designation. HHS must issue rules within 1 year and may revoke a certification for failure to file required reports. The pathway would end for new certifications 9 years after enactment.
Payment study and transition for rural hospitals
If enacted, the bill would direct MedPAC to study rural hospital payment systems using 2018–2028 data and report to Congress within 8 years. MedPAC must analyze payment features that keep Medicare sustainable and may recommend new payment models and transition impacts. The Secretary must also set up, within 9 years, a mechanism so designated hospitals move within 1 year to either MedPAC‑recommended models, their prior Medicare payment model, or rural emergency hospital payment. This could stabilize payments for some hospitals but would also require an end to the temporary CAH route for those facilities.
Sponsors & CoSponsors
Sponsor
Richard Durbin
IL • D
Cosponsors
James Lankford
OK • R
Sponsored 2/10/2025
Tina Smith
MN • D
Sponsored 2/10/2025
Cindy Hyde-Smith
MS • R
Sponsored 2/24/2025
Shelley Capito
WV • R
Sponsored 2/24/2025
Sen. Luján, Ben Ray [D-NM]
NM • D
Sponsored 4/1/2025
Roger Wicker
MS • R
Sponsored 5/8/2025
Adam Schiff
CA • D
Sponsored 10/27/2025
Roll Call Votes
No roll call votes available for this bill.
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