Rural Emergency Hospital Designation Improvement Act
Sponsored By: Representative Tokuda, Jill N. [D-HI-2]
Introduced
Summary
Expands access to rural emergency hospitals by loosening eligibility and aligning Medicare, Medicaid, payment, and workforce rules so more rural facilities can convert and offer more services.
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- Rural patients would get more local care options including inpatient behavioral health, inpatient rehabilitation, and obstetric units, plus extended post-acute care through swing-bed agreements.
- Rural hospitals and health systems could qualify across a broader time window beginning Jan 1, 2015 and regulators could waive certain eligibility rules to allow similar facilities to convert to rural emergency hospital status.
- Medicare would include a 5% add-on to laboratory payments for tests performed by rural emergency hospitals starting Jan 1, 2027, REHs could be paid for extended care on a cost-proxy basis, they would become eligible for small rural hospital grants, and REHs would be deemed for Health Professional Shortage Area status to access HRSA workforce programs.
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Bill Overview
Analyzed Economic Effects
6 provisions identified: 6 benefits, 0 costs, 0 mixed.
Local post-acute care at rural hospitals
If enacted, a rural emergency hospital could enter an agreement with the Secretary to provide extended care services that otherwise would be provided by a skilled nursing facility. Payment to the REH for those services would be based on reasonable cost under existing hospital cost-reimbursement rules, with the REH treated in place of 'hospital' for calculations. This could let Medicare patients get skilled nursing–type care closer to home instead of transferring far away.
Medicaid coverage for rural hospital services
If enacted, Medicaid's mandatory coverage would explicitly include rural emergency hospital services that are licensed or approved by the State and services in nursing facility distinct-part units of an REH. The change would apply on the date of enactment. States that require new state legislation would get extra time tied to their legislative session before being treated as out of compliance.
New inpatient units at rural hospitals
If enacted, rural emergency hospitals would be allowed to include separately licensed inpatient psychiatric units, inpatient rehabilitation units, and obstetric units (including labor and delivery or obstetric emergency departments). Each unit must be a distinct-part licensed unit inside the facility. This could let rural patients get behavioral health, rehab, or obstetric inpatient care closer to home.
5% higher Medicare lab pay for rural hospitals
If enacted, Medicare payment for qualifying clinical diagnostic lab tests furnished by rural emergency hospitals would be increased by 5 percent for tests on or after January 1, 2027. Any beneficiary copayment for those tests would be applied as if the 5 percent add-on did not exist, so patient cost-sharing would not increase because of the add-on. The add-on applies only to tests that are not treated as covered outpatient department services.
Easier rural emergency hospital conversions
If enacted, the bill would widen when a facility can meet the timing rule for rural emergency hospital (REH) designation by using a window beginning January 1, 2015. The Secretary would have to issue rules within one year to allow waivers so facilities that operate like REHs can convert. The Secretary would also have to issue rules within one year to let an REH that reverts to its prior critical access hospital regain prior necessary-provider status if it had that status before conversion.
More workforce and grants for rural hospitals
If enacted, the HHS Secretary would be required to treat rural emergency hospitals as health professional shortage areas for HRSA workforce programs like the National Health Service Corps. The bill would also make REHs eligible for Small Rural Hospital Improvement Program grants. These steps would help rural hospitals recruit clinicians and get federal grant support.
Sponsors & CoSponsors
Sponsor
Tokuda, Jill N. [D-HI-2]
HI • D
Cosponsors
Rep. Mann, Tracey [R-KS-1]
KS • R
Sponsored 9/3/2026
Rep. Davids, Sharice [D-KS-3]
KS • D
Sponsored 9/3/2026
Rep. Bergman, Jack [R-MI-1]
MI • R
Sponsored 9/3/2026
Rep. Davis, Donald G. [D-NC-1]
NC • D
Sponsored 9/3/2026
Rep. Miller, Carol D. [R-WV-1]
WV • R
Sponsored 9/3/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov