[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3684 Introduced in House (IH)]

<DOC>






119th CONGRESS
  1st Session
                                H. R. 3684

To amend titles XVIII and XIX of the Social Security Act to provide for 
enhanced payments to rural health care providers under the Medicare and 
               Medicaid programs, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 3, 2025

  Mr. Graves (for himself and Ms. Budzinski) introduced the following 
  bill; which was referred to the Committee on Ways and Means, and in 
addition to the Committees on Energy and Commerce, and the Budget, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
To amend titles XVIII and XIX of the Social Security Act to provide for 
enhanced payments to rural health care providers under the Medicare and 
               Medicaid programs, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Save America's 
Rural Hospitals Act''.
    (b) Findings.--Congress finds the following:
            (1) More than 60,000,000 individuals in rural areas of the 
        United States rely on rural hospitals and other providers as 
        critical access points to health care.
            (2) Access to health care is essential to communities that 
        Americans living in rural areas call home.
            (3) Americans living in rural areas are older, poorer, and 
        sicker than Americans living in urban areas.
            (4) As of May 1, 2025, 151 rural hospitals have closed in 
        the United States, according to the University of North 
        Carolina's Cecil G. Sheps Center for Health Services Research, 
        and the rate of these closures is increasing.
            (5) Four hundred and thirty-two hospitals are operating at 
        margins similar to those that have closed over the past decade. 
        Of those, 216 are considered most vulnerable to closure.
            (6) Rural Medicare beneficiaries already face a number of 
        challenges when trying to access health care services close to 
        home, including the weather, geography, and cultural, social, 
        and language barriers.
            (7) Approximately sixty percent of all primary care health 
        professional shortage areas are located in rural areas.
            (8) Seniors living in rural areas are forced to travel 
        significant distances for care.
            (9) On average, trauma victims in rural areas must travel 
        twice as far as victims in urban areas to the closest hospital, 
        and, as a result, 60 percent of trauma deaths occur in rural 
        areas, even though only 20 percent of Americans live in rural 
        areas.
            (10) With the 432 hospitals on the brink of closure, 
        millions of Americans living in rural areas are on the brink of 
        losing access to the closest emergency room.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
             TITLE I--RURAL PROVIDER PAYMENT STABILIZATION

                      Subtitle A--Rural Hospitals

Sec. 101. Eliminating Medicare sequestration for rural hospitals.
Sec. 102. Reversing cuts to reimbursement of bad debt for critical 
                            access hospitals (CAHs) and rural 
                            hospitals.
Sec. 103. Permanently extending payment levels for low-volume hospitals 
                            and Medicare-dependent hospitals (MDHs).
Sec. 104. Extending disproportionate share payments for sole community 
                            hospitals and medicare-dependent hospitals.
Sec. 105. Rebasing target amounts for Medicare-dependent hospitals and 
                            sole community hospitals.
Sec. 106. Implementing area wage index adjustments.
                   Subtitle B--Other Rural Providers

Sec. 111. Making permanent increased Medicare payments for ground 
                            ambulance services in rural areas.
Sec. 112. Permanently extending Medicare telehealth service 
                            enhancements for federally qualified health 
                            centers and rural health clinics.
Sec. 113. Restoring State authority to waive the 35-mile rule for 
                            certain Medicare critical access hospital 
                            designations.
              TITLE II--RURAL MEDICARE BENEFICIARY EQUITY

Sec. 201. Equalizing beneficiary copayments for services furnished by 
                            CAHs.
                      TITLE III--REGULATORY RELIEF

Sec. 301. Eliminating 96-hour requirements with respect to inpatient 
                            CAH services.
Sec. 302. Eliminating hospitalization requirement for extended care 
                            services furnished by certain hospitals.
                 TITLE IV--FUTURE OF RURAL HEALTH CARE

Sec. 401. Medicare rural hospital flexibility program grants.

             TITLE I--RURAL PROVIDER PAYMENT STABILIZATION

                      Subtitle A--Rural Hospitals

SEC. 101. ELIMINATING MEDICARE SEQUESTRATION FOR RURAL HOSPITALS.

    (a) In General.--Section 256(d)(7) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 (2 U.S.C. 906(d)(7)) is amended 
by adding at the end the following:
                    ``(D) Rural hospitals.--Payments under part A or 
                part B of title XVIII of the Social Security Act with 
                respect to items and services furnished by a critical 
                access hospital (as defined in section 1861(mm)(1) of 
                such Act), a sole community hospital (as defined in 
                section 1886(d)(5)(D)(iii) of such Act), a medicare-
                dependent, small rural hospital (as defined in section 
                1886(d)(5)(G)(iv) of such Act), or a subsection (d) 
                hospital (as defined in section 1886(d)(1)(B) of such 
                Act) located in a rural area (as defined in section 
                1886(d)(2)(D) of such Act).''.
    (b) Applicability.--The amendment made by this section applies with 
respect to orders of sequestration effective on or after the date that 
is 60 days after the date of the enactment of this Act.

SEC. 102. REVERSING CUTS TO REIMBURSEMENT OF BAD DEBT FOR CRITICAL 
              ACCESS HOSPITALS (CAHS) AND RURAL HOSPITALS.

    (a) Rural Hospitals.--Section 1861(v)(1)(T)(v) of the Social 
Security Act (42 U.S.C. 1395x(v)(1)(T)(v)) is amended by inserting 
before the period at the end the following: ``or, in the case of a 
hospital located in a rural area, by 15 percent of such amount 
otherwise allowable''.
    (b) CAHs.--Section 1861(v)(1)(W)(ii) of the Social Security Act (42 
U.S.C. 1395x(v)(1)(W)(ii)) is amended by inserting ``, a critical 
access hospital'' after ``or (V)''.
    (c) Applicability.--The amendments made by this section apply with 
respect to cost reporting periods beginning more than 60 days after the 
date of the enactment of this Act.

SEC. 103. PERMANENTLY EXTENDING PAYMENT LEVELS FOR LOW-VOLUME HOSPITALS 
              AND MEDICARE-DEPENDENT HOSPITALS (MDHS).

    (a) Extension of Increased Payments for MDHs.--
            (1) Extension of payment methodology.--Section 
        1886(d)(5)(G) of the Social Security Act (42 U.S.C. 
        1395ww(d)(5)(G)) is amended--
                    (A) in clause (i), by striking ``, and before 
                October 1, 2025''; and
                    (B) in clause (ii)(II), by striking ``, and before 
                October 1, 2025''.
            (2) Conforming amendments.--
                    (A) Extension of target amount.--Section 
                1886(b)(3)(D) of the Social Security Act (42 U.S.C. 
                1395ww(b)(3)(D)) is amended--
                            (i) in the matter preceding clause (i), by 
                        striking ``, and before October 1, 2025''; and
                            (ii) in clause (iv), by striking ``through 
                        fiscal year 2025'' and inserting ``or a 
                        subsequent fiscal year''.
                    (B) Extending the period during which hospitals can 
                decline reclassification as urban.--Section 13501(e)(2) 
                of the Omnibus Budget Reconciliation Act of 1993 (42 
                U.S.C. 1395ww note) is amended by striking ``through 
                fiscal year 2025'' and inserting ``, or a subsequent 
                fiscal year''.
    (b) Extension of Increased Payments for Low-Volume Hospitals.--
Section 1886(d)(12) of the Social Security Act (42 U.S.C. 
1395ww(d)(12)) is amended--
            (1) in subparagraph (B)--
                    (A) in the subparagraph heading, by inserting ``for 
                fiscal years 2005 through 2010'' after ``increase''; 
                and
                    (B) in the matter preceding clause (i), by striking 
                ``and for discharges occurring in fiscal year 2026 and 
                subsequent fiscal years'';
            (2) in subparagraph (C)(i)--
                    (A) in the matter preceding subclause (I), by 
                striking ``through 2025'' and inserting ``and each 
                subsequent fiscal year'';
                    (B) in subclause (II), by adding ``and'' at the 
                end;
                    (C) in subclause (III)--
                            (i) by striking ``fiscal years 2019 through 
                        2025'' and inserting ``fiscal year 2019 and 
                        each subsequent fiscal year''; and
                            (ii) by striking ``; and'' and inserting a 
                        period; and
                    (D) by striking subclause (IV); and
            (3) in subparagraph (D)--
                    (A) by amending the heading to read as follows: 
                ``Permanent applicable percentage increase'';
                    (B) in the matter preceding clause (i), by striking 
                ``in fiscal years 2011 through 2025'' and inserting 
                ``in fiscal year 2011 or a subsequent fiscal year''; 
                and
                    (C) in clause (ii), by striking ``each of fiscal 
                years 2019 through 2025'' and inserting ``fiscal year 
                2019 and each subsequent fiscal year''.

SEC. 104. EXTENDING DISPROPORTIONATE SHARE PAYMENTS FOR SOLE COMMUNITY 
              HOSPITALS AND MEDICARE-DEPENDENT HOSPITALS.

    Section 1886 of the Social Security Act (42 U.S.C. 1395ww) is 
amended--
            (1) in subsection (d)(5)(F)(i), by inserting ``, including, 
        with respect to discharges occurring in fiscal year 2026 and 
        each subsequent fiscal year, a subsection (d) hospitals that is 
        a sole community hospitals paid the amount described in 
        subparagraph (D)(i)(I) or a medicare-dependent, small rural 
        hospital paid the amount described in subparagraph (G),'' after 
        ``subsection (d) hospital''; and
            (2) in subsection (r)(2), by inserting ``(including, with 
        respect to fiscal year 2026 and each subsequent fiscal year, 
        subsection (d) hospitals that are sole community hospitals or 
        medicare-dependent, small rural hospitals described in 
        subsection (d)(5)(F)(i))'' after ``such subsection (d) 
        hospitals''.

SEC. 105. REBASING TARGET AMOUNTS FOR MEDICARE-DEPENDENT HOSPITALS AND 
              SOLE COMMUNITY HOSPITALS.

    Section 1886(b)(3) of the Social Security Act (42 U.S.C. 
1395ww(b)(3)) is amended--
            (1) in subparagraph (K)(i)--
                    (A) in subclause (I), by inserting ``(or, with 
                respect to discharges occurring on or after October 1, 
                2025, the 12-month cost reporting period beginning 
                during fiscal year 2024)'' after ``fiscal year 2002''; 
                and
                    (B) in subclause (II), by inserting ``(or, with 
                respect to discharges occurring on or after October 1, 
                2025, the first cost reporting period beginning on or 
                after such date)'' after ``October 1, 2006''; and
            (2) in subparagraph (L)(ii)--
                    (A) in subclause (I), by inserting ``(or, with 
                respect to discharges occurring on or after October 1, 
                2025, the 12-month cost reporting period beginning 
                during fiscal year 2024)'' after ``fiscal year 2006''; 
                and
                    (B) in subclause (II), by inserting ``(or, with 
                respect to discharges occurring on or after October 1, 
                2025, the first cost reporting period beginning on or 
                after such date)'' after ``January 1, 2009''.

SEC. 106. IMPLEMENTING AREA WAGE INDEX ADJUSTMENTS.

    (a) Codification of Low-Wage Index Hospital Policy.--Section 
1886(d)(3)(E) of the Social Security Act (42 U.S.C. 1395ww(d)(3)(E)) is 
amended by adding at the end the following new clause:
                    ``(v) Low-wage hospitals.--For discharges occurring 
                on or after October 1, 2025, the area wage index 
                applicable under this subparagraph for a fiscal year to 
                a hospital with an area wage index below the 25th 
                percentile area wage index shall be increased by \1/2\ 
                of the difference between the otherwise applicable 
                final area wage index for such fiscal year for such 
                hospital and the 25th percentile area wage index for 
                such fiscal year across all hospitals. Pursuant to the 
                fourth sentence of clause (i), the preceding sentence 
                shall be applied in a budget neutral manner.''.
    (b) Area Wage Adjustment for Hospitals Not Located in Frontier 
States.--
            (1) Hospital inpatient services.--Section 1886(d)(3)(E) of 
        the Social Security Act (42 U.S.C. 1395ww(d)(3)(E)), as amended 
        by subsection (a), is further amended by adding at the end the 
        following new clause:
                    ``(vi) Floor on area wage index for hospitals in 
                certain other areas.--
                            ``(I) In general.--For discharges occurring 
                        on or after October 1, 2025, the area wage 
                        index applicable under this subparagraph to any 
                        hospital which is not located in a frontier 
                        State (as defined in clause (iii)(II)) may not 
                        be less than 0.85.
                            ``(II) Ensuring budget neutrality.--In 
                        order to ensure that the aggregate payments 
                        made under this subsection for a fiscal year 
                        (beginning with fiscal year 2026) are not 
                        greater than the aggregate payments that would 
                        have been made under this subsection for such 
                        fiscal year without the application of 
                        subclause (I), as estimated by the Secretary, 
                        the Secretary shall establish pursuant to 
                        rulemaking a maximum area wage index to apply 
                        under this subparagraph to any hospital which 
                        is not located in a frontier State (as defined 
                        in clause (iii)(II)).
                            ``(III) No impact for hospitals with an 
                        area wage index between the floor and the 
                        maximum index.--Subclauses (I) and (II) shall 
                        have no effect on the area wage index 
                        applicable in a fiscal year to a hospital with 
                        an area wage index that is greater than the 
                        floor under subclause (I) but less than the 
                        maximum area wage index established under 
                        subclause (II) for the fiscal year.''.
            (2) Hospital outpatient department services.--Section 
        1833(t) of the Social Security Act (42 U.S.C. 1395l(t)), is 
        amended--
                    (A) in paragraph (2)(D), by striking ``paragraph 
                (19)'' and inserting ``paragraphs (19) and (23)''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(23) Floor on area wage adjustment factor for hospital 
        outpatient department services in areas other than in frontier 
        states.--
                    ``(A) In general.--With respect to covered OPD 
                services furnished on or after January 1, 2026, the 
                area wage adjustment factor applicable under the 
                payment system established under this subsection to any 
                hospital outpatient department which is not located in 
                a frontier State (as defined in section 
                1886(d)(3)(E)(iii)(II)) may not be less than 0.85.
                    ``(B) Ensuring budget neutrality.--In order to 
                ensure that the aggregate payments made under this 
                subsection for a year (beginning with 2026) are not 
                greater than the aggregate payments that would have 
                been made under this subsection for such year without 
                the application of subparagraph (A), as estimated by 
                the Secretary, the Secretary shall establish pursuant 
                to rulemaking a maximum area wage adjustment factor to 
                apply under the payment system established under this 
                subsection to any hospital outpatient department which 
                is not located in a frontier State (as defined in 
                clause (iii)(II)).
                    ``(C) No impact for hospitals with an area wage 
                adjustment factor between the floor and the maximum 
                factor.--Subparagraphs (A) and (B) shall have no effect 
                on the area wage adjustment factor applicable in a year 
                to a hospital with an area wage adjustment factor that 
                is greater than the floor under subparagraph (A) but 
                less than the maximum area wage adjustment factor 
                established under subparagraph (B) for the year.''.
    (c) Conforming Amendments.--Section 1886(d)(3)(E) of the Social 
Security Act (42 U.S.C. 1395ww(d)(3)(E)), as amended by subsections (a) 
and (b), is further amended--
            (1) in clause (i), by striking ``or (iv)'' and inserting 
        ``(iv), (v), or (vi)'';
            (2) in clause (iii), by adjusting the margins of such 
        clause 2 ems to the left; and
            (3) in clause (iv), by adjusting the margins of such clause 
        2 ems to the left.

                   Subtitle B--Other Rural Providers

SEC. 111. MAKING PERMANENT INCREASED MEDICARE PAYMENTS FOR GROUND 
              AMBULANCE SERVICES IN RURAL AREAS.

    Section 1834(l)(13) of the Social Security Act (42 U.S.C. 
1395m(l)(13)) is amended--
            (1) in the paragraph heading, by striking ``temporary 
        increase'' and inserting ``increase''; and
            (2) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by striking 
                ``, and before October 1, 2025''; and
                    (B) in clause (i), by striking ``, and before 
                October 1, 2025''.

SEC. 112. PERMANENTLY EXTENDING MEDICARE TELEHEALTH SERVICE 
              ENHANCEMENTS FOR FEDERALLY QUALIFIED HEALTH CENTERS AND 
              RURAL HEALTH CLINICS.

    Section 1834(m)(8) of the Social Security Act (42 U.S.C. 
1395m(m)(8)) is amended--
            (1) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by striking 
                ``During the emergency period described in section 
                1135(g)(1)(B) and, in the case that such emergency 
                period ends before December 31, 2024, during the period 
                beginning on the first day after the end of such 
                emergency period and ending on September 30, 2025'' and 
                inserting ``Beginning on the first day of the emergency 
                period described in section 1135(g)(1)(B)''; and
                    (B) in clause (ii), by striking ``determined under 
                subparagraph (B)'' and inserting ``, for services 
                furnished during the period beginning on the first day 
                of the emergency period described in section 
                1135(g)(1)(B) and ending on the date that is 60 days 
                after the date of the enactment of the Save America's 
                Rural Hospitals Act, determined under subparagraph (B) 
                and, for services furnished after such period, an 
                amount equal to the amount that such center or clinic 
                would have been paid under this title had such services 
                been furnished without the use of a telecommunications 
                system''; and
            (2) in subparagraph (B)--
                    (A) by striking ``payment rule'' and all that 
                follows through ``The Secretary shall'' and inserting 
                ``payment rule.--The Secretary shall'';
                    (B) by striking ``during the periods for which 
                subparagraph (A) applies'' and inserting ``during the 
                period described in subparagraph (A)(ii)''; and
                    (C) by redesignating clause (ii) as subparagraph 
                (C), and adjusting the margin accordingly.

SEC. 113. RESTORING STATE AUTHORITY TO WAIVE THE 35-MILE RULE FOR 
              CERTAIN MEDICARE CRITICAL ACCESS HOSPITAL DESIGNATIONS.

    (a) In General.--Section 1820 of the Social Security Act (42 U.S.C. 
1395i-4) is amended--
            (1) in subsection (c)(2)--
                    (A) in subparagraph (B)(i)--
                            (i) in subclause (I), by striking at the 
                        end ``or'';
                            (ii) in subclause (II), by inserting at the 
                        end ``or''; and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(III) subject to subparagraph 
                                (G), is a hospital described in 
                                subparagraph (F) and is certified on or 
                                after the date of the enactment of the 
                                Save America's Rural Hospitals Act by 
                                the State as being a necessary provider 
                                of health care services to residents in 
                                the area;''; and
                    (B) by adding at the end the following new 
                subparagraphs:
                    ``(F) Hospital described.--For purposes of 
                subparagraph (B)(i)(III), a hospital described in this 
                subparagraph is a hospital that--
                            ``(i) is a sole community hospital (as 
                        defined in section 1886(d)(5)(D)(iii)), a 
                        medicare-dependent, small rural hospital (as 
                        defined in section 1886(d)(5)(G)(iv)), a low-
                        volume hospital that in 2021 receives a payment 
                        adjustment under section 1886(d)(12), a 
                        subsection (d) hospital (as defined in section 
                        1886(d)(1)(B)) that has fewer than 50 beds, or, 
                        subject to the limitation under subparagraph 
                        (G)(i)(I), is a facility described in 
                        subparagraph (G)(ii);
                            ``(ii) is located in a rural area, as 
                        defined in section 1886(d)(2)(D);
                            ``(iii)(I) is located--
                                    ``(aa) in a county that has a 
                                percentage of individuals with income 
                                that is below 150 percent of the 
                                poverty line that is higher than the 
                                national or statewide average in 2020; 
                                or
                                    ``(bb) in a health professional 
                                shortage area (as defined in section 
                                332(a)(1)(A) of the Public Health 
                                Service Act); or
                            ``(II) has a percentage of inpatient days 
                        of individuals entitled to benefits under part 
                        A of this title, enrolled under part B of this 
                        title, or enrolled under a State plan under 
                        title XIX that is higher than the national or 
                        statewide average in 2019 or 2020;
                            ``(iv) subject to subparagraph (G)(ii)(II), 
                        has attested to the Secretary 2 consecutive 
                        years of negative operating margins preceding 
                        the date of certification described in 
                        subparagraph (B)(i)(III); and
                            ``(v) submits to the Secretary--
                                    ``(I) at such time and in such 
                                manner as the Secretary may require, an 
                                attestation outlining the good 
                                governance qualifications and strategic 
                                plan for multi-year financial solvency 
                                of the hospital; and
                                    ``(II) not later than 120 days 
                                after the date on which the Secretary 
                                issues final regulations pursuant to 
                                section 113(b) of the Save America's 
                                Rural Hospitals Act, an application for 
                                certification of the facility as a 
                                critical access hospital.
                    ``(G) Limitation on certain designations.--
                            ``(i) In general.--The Secretary may not 
                        under subsection (e) certify pursuant to a 
                        certification by a State under subparagraph 
                        (B)(i)(III)--
                                    ``(I) more than a total of 175 
                                facilities as critical access 
                                hospitals, of which not more than 20 
                                percent may be facilities described in 
                                clause (ii); and
                                    ``(II) within any one State, more 
                                than 10 facilities as critical access 
                                hospitals.
                            ``(ii) Facility described.--
                                    ``(I) In general.--A facility 
                                described in this clause is a facility 
                                that as of the date of enactment of 
                                this subparagraph met the criteria for 
                                designation as a critical access 
                                hospital under subparagraph (B)(i)(I).
                                    ``(II) Nonapplication of certain 
                                criteria.--For purposes of subparagraph 
                                (B)(i)(III), the criteria described in 
                                subparagraph (F)(iv) shall not apply 
                                with respect to the designation of a 
                                facility described in subclause (I).''; 
                                and
            (2) in subsection (e), by inserting ``, subject to 
        subsection (c)(2)(G),'' after ``The Secretary shall''.
    (b) Regulations.--Not later than 120 days after the date of the 
enactment of this Act, the Secretary of Health and Human Services shall 
issue final regulations to carry out this section.
    (c) Clarification Regarding Facilities That Meet Distance or Other 
Certification Criteria.--Nothing in this section shall affect the 
application of criteria for designation as a critical access hospital 
described in subclause (I) or (II) of section 1820(c)(2)(B)(i) of the 
Social Security Act (42 U.S.C. 1395i-4(c)(2)(B)(i)).

              TITLE II--RURAL MEDICARE BENEFICIARY EQUITY

SEC. 201. EQUALIZING BENEFICIARY COPAYMENTS FOR SERVICES FURNISHED BY 
              CAHS.

    (a) In General.--Section 1866(a)(2)(A) of the Social Security Act 
(42 U.S.C. 1395cc(a)(2)(A)) is amended by adding at the end the 
following: ``In the case of outpatient critical access hospital 
services for which payment is made under section 1834(g), clause (ii) 
of the first sentence shall be applied by substituting `20 percent of 
the lesser of the actual charge or the payment basis under this part 
for such services if the critical access hospital were treated as a 
hospital' for `20 per centum of the reasonable charges for such items 
and services'.''.
    (b) Applicability.--The amendment made by this section applies with 
respect to services furnished during a year that begins more than 60 
days after the date of the enactment of this Act.

                      TITLE III--REGULATORY RELIEF

SEC. 301. ELIMINATING 96-HOUR REQUIREMENTS WITH RESPECT TO INPATIENT 
              CAH SERVICES.

    (a) Physician Certification Requirement.--Section 1814(a) of the 
Social Security Act (42 U.S.C. 1395f(a)) is amended--
            (1) in paragraph (6), by adding ``and'' at the end;
            (2) in paragraph (7)(E), by striking ``; and'' and 
        inserting a period; and
            (3) by striking paragraph (8).
    (b) Average Length of Stay Requirement.--Section 1820(c)(2)(B)(iii) 
of the Social Security Act (42 U.S.C. 1395i-4(c)(2)(B)(iii)) is amended 
by striking ``for providing inpatient care for a period that does not 
exceed, as determined on an annual, average basis, 96 hours per 
patient''.
    (c) Applicability.--The amendments made by this section apply with 
respect to services furnished during a year that begins more than 60 
days after the date of the enactment of this Act.

SEC. 302. ELIMINATING HOSPITALIZATION REQUIREMENT FOR EXTENDED CARE 
              SERVICES FURNISHED BY CERTAIN HOSPITALS.

    Section 1812(f) of the Social Security Act (42 U.S.C. 1395d(f)) is 
amended by adding at the end the following new paragraph:
    ``(3) The Secretary shall provide for coverage under subsection 
(a)(2)(B) of extended care services (that are not posthospital extended 
care services) furnished on or after the date that is 60 days after the 
date of the enactment of this paragraph by a hospital described in 
subsection (b) of section 1883 pursuant to an agreement under such 
section for such a duration as the Secretary determines appropriate 
such that the coverage of such services for such duration does not 
alter the acute care nature of the benefit described in subsection 
(a)(2).''.

                 TITLE IV--FUTURE OF RURAL HEALTH CARE

SEC. 401. MEDICARE RURAL HOSPITAL FLEXIBILITY PROGRAM GRANTS.

    Section 1820(g) of the Social Security Act (42 U.S.C. 1395i-4(g)) 
is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (C), by striking ``and'' at the 
                end;
                    (B) in subparagraph (D), by striking the period at 
                the end and inserting a semicolon; and
                    (C) by adding at the end the following new 
                subparagraphs:
                    ``(E) rural emergency hospitals providing support 
                for critical access hospitals to convert to rural 
                emergency hospitals to stabilize hospital emergency 
                services in their communities; and
                    ``(F) supporting certified rural health clinics for 
                maintaining and building business operations, 
                increasing financial indicators, addressing population 
                health, transforming services, and providing linkages 
                and services for behavioral health and substance use 
                disorders responding to public health emergencies.'';
            (2) by redesignating paragraphs (3) through (7) as 
        paragraphs (4) through (8), respectively;
            (3) after paragraph (2), by inserting the following new 
        paragraph:
            ``(3) Activities to support carrying out flex grants.--The 
        Secretary may award grants or cooperative agreements to 
        entities that submit to the Secretary applications, at such 
        time and in such form and manner and containing such 
        information as the Secretary specifies, for purposes of 
        supporting States and hospitals in carrying out the activities 
        under this subsection by providing technical assistance, data 
        analysis, and evaluation efforts.'';
            (4) in paragraph (4), as redesignated--
                    (A) in subparagraph (A), by inserting ``State 
                Offices of Rural Health on behalf of eligible hospitals 
                and'' after ``award grants to'';
                    (B) by amending subparagraph (C) to read as 
                follows:
                    ``(C) Application.--The State Office of Rural 
                Health shall submit an application, on behalf of 
                eligible rural hospitals, to the Secretary on or before 
                such date and in such form and manner as the Secretary 
                specifies.'';
                    (C) by amending subparagraph (D), to read as 
                follows:
                    ``(D) Amount of grant.--A grant to a hospital under 
                this paragraph shall be determined on an equal national 
                distribution so that each hospital receives the same 
                amount of support related to the funds appropriated.'';
                    (D) by amending subparagraph (E), to read as 
                follows:
                    ``(E) Use of funds.--State Offices of Rural Health 
                and eligible hospitals may use the funds received 
                through a grant under this paragraph for the purchase 
                of computer software and hardware; the education and 
                training of hospital staff on billing, operational, 
                quality improvement and related value-focused efforts; 
                and other delivery system reform programs determined 
                appropriate by the Secretary.''; and
            (5) by adding at the end the following new paragraph:
            ``(9) Rural health transformation grants.--
                    ``(A) Grants.--The Secretary may award 5-year 
                grants to State Offices of Rural Health and to eligible 
                rural health care providers (as defined in subparagraph 
                (D)) on the transition to new models, including rural 
                emergency hospitals, extended stay clinics, 
                freestanding emergency departments, rural health 
                clinics, and integration of behavioral, oral health 
                services, telehealth and other transformational models 
                relevant to rural providers as such providers evolve to 
                better meet community needs and the changing health 
                care environment.
                    ``(B) Application.--An applicable rural health care 
                provider, in partnership with the State Office of Rural 
                Health in the State in which the rural health care 
                provider seeking a grant under this paragraph is 
                located, 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 
                rural health care provider unless--
                            ``(i) local organizations or the State in 
                        which the hospital is located provides support 
                        (either direct or in kind); and there are 
                        letters of support from key State payers such 
                        as Medicaid and private insurance; and
                            ``(ii) the applicant describes in detail 
                        how the transition of the health care provider 
                        or providers will better meet local needs and 
                        be sustainable.
                    ``(D) Eligible rural health care provider 
                defined.--For purposes of this paragraph, the term 
                `eligible rural health care provider' includes a 
                critical access hospital, a certified rural health 
                clinic, a rural nursing home, skilled nursing facility, 
                emergency care provider, or other entity identified by 
                the Secretary. An eligible rural health care provider 
                may include other entities applying on behalf of a 
                group of providers such as a State Office of Rural 
                Health, a State or local health care authority, a rural 
                health network, or other entity identified by the 
                Secretary.''.
                                 <all>