S-5164-119
Read twice and referred to the Committee on Finance.
Sponsored by Jerry Moran (R-KS)
What it does
The bill would change how rural emergency hospitals are defined, paid and supported under Medicare and Medicaid. It would widen the window for hospitals to qualify (open at any point from Jan. 1, 2015), and would require the HHS Secretary to write rules waiving certain requirements for facilities that operate similarly. It would add 5 percent to Medicare payment for lab tests at these hospitals starting Jan. 1, 2027, and would allow swing-bed skilled nursing services paid at reasonable cost. It would also require HHS rules letting hospitals that revert to critical access status regain necessary provider status (only if they held it before converting), would require HRSA rules treating these hospitals as health professional shortage areas, would make them eligible for Small Rural Hospital Improvement grants, and would add their services to Medicaid coverage. As drafted, Section 3 adds psychiatric, rehabilitation and obstetric distinct-part units to the statutory list of what these hospitals maintain or include, and the text does not say whether these are required or optional. State legislation may delay Medicaid compliance, and other limits apply.
Who benefits
Rural emergency hospitals and hospitals considering conversion, which would gain broader eligibility, a 5 percent lab payment add-on, swing-bed payments, grant access and Medicaid coverage. Rural residents who may keep nearby emergency, behavioral health, rehabilitation, obstetric or skilled nursing services. Former critical access hospitals that could regain necessary provider status after reverting. Medicaid patients in rural areas, and clinicians who may gain access to National Health Service Corps programs at these sites.
Who is hurt
Federal taxpayers, who would bear added Medicare, Medicaid and grant costs, including the 5 percent lab payment increase. Small rural hospitals that, if the Section 3 unit language is read as mandatory, could face costs to license and staff psychiatric, rehabilitation and obstetric units. State Medicaid programs, which would share the cost of newly covered services and may need legislation to comply. Other rural and critical access hospitals competing for the same grants and shortage-area resources. HHS and HRSA, which would face rulemaking deadlines and administrative work.
Supporters argue
Supporters argue rural hospitals are closing and the rural emergency hospital designation, created in 2020 and effective in 2023, is too narrow to help many of them. They contend that wider eligibility, a lab payment add-on, swing-bed payments, grant access and Medicaid coverage would let struggling hospitals keep emergency services and add behavioral health, rehabilitation and obstetric care that rural areas often lack. They point to the bill's bipartisan Senate sponsors from rural states as evidence of broad demand for these fixes.
Opponents argue
Opponents argue the bill would raise federal Medicare, Medicaid and grant spending without offsetting costs, and the 5 percent lab add-on is a payment preference not tied to a documented cost study. They contend the Section 3 unit language, as drafted, could burden small hospitals with expensive licensing and staffing duties, and that open-ended waivers for facilities operating similarly would hand HHS broad discretion. They also argue states could face new Medicaid costs and added administrative work.
Constitutional context
Congress acts under the Spending Clause (Art. I, §8, cl. 1) and the Necessary and Proper Clause to set Medicare payment and Medicaid coverage rules. Medicaid changes that add state obligations implicate the coercion limit in NFIB v. Sebelius (2012), though this bill adds a covered service category and delays compliance where state legislation is needed.
Checks and balances
Congress sets payment and eligibility rules while giving HHS and HRSA rulemaking duties with 1-year deadlines, which expands executive discretion; courts review those rules independently after Loper Bright, and states keep some control through Medicaid plan approval and legislative timelines.
Historical precedent
Congress created the rural emergency hospital designation in the Consolidated Appropriations Act, 2021, and earlier created critical access hospital and swing-bed rules in the Balanced Budget Act of 1997.