[Pages S820-S821]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN (for himself, Mr. Lankford, and Ms. Smith):
  S. 502. A bill to amend title XVIII of the Social Security Act to 
restore State authority to waive for certain facilities the 35-mile 
rule for designating critical access hospitals under the Medicare 
program, and for other purposes; to the Committee on Finance.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 502

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Rural Hospital Closure 
     Relief Act of 2025''.

     SEC. 2. 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 ``or'' at the end;
       (ii) in subclause (II), by inserting ``or'' at the end; 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 Rural Hospital Closure 
     Relief Act of 2025, and before the date that is 9 years after 
     the date of enactment of this subclause, 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), or a subsection (d) hospital (as 
     defined in section 1886(d)(1)(B));
       ``(ii) is located in a rural area, as defined in section 
     1886(d)(2)(D), or a rural census tract of a metropolitan 
     statistical area (as determined under the most recent 
     modification of the Goldsmith Modification, originally 
     published in the Federal Register on February 27, 1992 (57 
     Fed. Reg. 6725));
       ``(iii)(I) is located--

       ``(aa) in a county that has a percentage of individuals 
     with income at or below the Federal poverty level in 2023 or 
     2024 that is higher than the national or statewide average in 
     that year; 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 in 2023 or 
     2024 that is higher than the national or statewide average in 
     that year;
       ``(iv) has attested to the Secretary that the hospital--

       ``(I) was operating as of the date of enactment of this 
     subparagraph; and
       ``(II) had 2 consecutive years of negative operating 
     margins preceding the date of certification described in 
     subparagraph (B)(i)(III), as defined by the Secretary in the 
     regulations or program instruction issued pursuant to section 
     2(b) of the Rural Hospital Closure Relief Act of 2025; and

       ``(v) submits to the Secretary, at such time and in such 
     manner as the Secretary may require, an application for 
     certification of the facility as a critical access hospital, 
     including an attestation outlining--

       ``(I) the good governance qualifications and strategic plan 
     for multi-year financial solvency of the hospital; and
       ``(II) the hospital's commitment to open and maintain, for 
     the duration of the hospital's designation as a critical 
     access hospital under this section, a new service line or 
     expanded service capacity for a service that is in high 
     demand or limited supply in the hospital's service area 
     (determined based on the hospital's most recent community 
     health needs assessment under section 501(r)(3) of the 
     Internal Revenue Code of 1986 (or other comparable 
     assessment)), such as obstetrics or behavioral health care 
     services.

       ``(G) Limitation on certain designations.--
       ``(i) In general.--Subject to clauses (ii) and (iii), 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 120 facilities as critical 
     access hospitals; and
       ``(II) within any one State, more than 5 facilities as 
     critical access hospitals.

       ``(ii) Process.--The Secretary shall follow the following 
     process in carrying out clause (i) with respect to each year 
     in which the Secretary determines that the limitation under 
     clause (i)(I) has not been reached:

       ``(I) Initial assessment.--The Secretary shall conduct an 
     initial assessment of the total number of hospitals described 
     in paragraph (2)(F).
       ``(II) Initial allocation.--Of the total number of 
     designations available under clause (i), the Secretary shall 
     allocate 1 for a hospital in each State that the Secretary 
     determines (based on the initial assessment under subclause 
     (I)) has one or more hospitals described in paragraph (2)(F).
       ``(III) Remaining allocation.--Of the total number of 
     designations available under clause (i), after application of 
     subclause (II), the Secretary shall allocate the remaining 
     number on a proportional basis based on the total number of 
     hospitals described in paragraph (2)(F) in each State that 
     are eligible (as determined based on the initial assessment 
     under subclause (I)).

       ``(iii) Sunset.--Effective beginning on the date that is 9 
     years after the date of enactment of this subparagraph, the 
     Secretary may not certify a hospital as a critical access 
     hospital pursuant to a certification by a State under 
     subparagraph (B)(i)(III).
       ``(H) Information submission requirements for hospitals 
     certified pursuant to rural hospital closure relief act.--
       ``(i) In general.--A critical access hospital that is 
     certified under subsection (e) pursuant to a certification by 
     a State under subparagraph (B)(i)(III) shall submit to the 
     Secretary the following at a time, and in a manner, specified 
     by the Secretary:

       ``(I) Reports.--Reports containing such information as the 
     Secretary may specify with respect to items and services 
     furnished as part of the new service line or expanded service 
     capacity for a service as described in the attestation 
     submitted by the critical access hospital under subparagraph 
     (F)(v)(II). To the extent practicable, the Secretary shall 
     align such reporting with other reporting requirements 
     applicable to critical access hospitals under this 
     subsection.
       ``(II) Notice.--If the critical access hospital materially 
     changes the new service line or expanded capacity for a 
     service as so described, notice of such changes along with a 
     plan to satisfactorily maintain access to care (as determined 
     by the Secretary).

       ``(ii) Revocation of certification for noncompliance.--If 
     the Secretary determines that a critical access hospital 
     described in clause (i) has failed to submit an annual report 
     required under subclause (I) of such clause or a notice 
     required under subclause (II) of such clause, the Secretary 
     may, as the Secretary determines appropriate, revoke the 
     certification of the critical access hospital under 
     subsection (e).''; and
       (2) in subsection (e), by inserting ``, subject to 
     subsection (c)(2)(G),'' after ``The Secretary shall''.
       (b) Implementation.--Not later than 1 year after the date 
     of the enactment of this Act, the Secretary of Health and 
     Human Services shall issue final regulations or program 
     instruction to carry out subsection (a).
       (c) Clarification Regarding Facilities That Meet Distance 
     or Other Criteria and Application of Other Criteria.--Nothing 
     in this section shall affect--
       (1) 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)); or

[[Page S821]]

       (2) the application of criteria for designation as a 
     critical access hospital described in clauses (ii) through 
     (v) of section 1820(c)(2)(B) of the Social Security Act (42 
     U.S.C. 1395i-4(c)(2)(B)).
       (d) GAO Study and Report.--
       (1) Study.--The Comptroller General of the United States 
     (in this section referred to as the ``Comptroller General'') 
     shall conduct a study on the implementation of the amendments 
     made by subsection (a). To the extent such data are available 
     and reliable, such study shall include--
       (A) an analysis of--
       (i) the characteristics of facilities designated as 
     critical access hospitals pursuant to section 
     1820(c)(2)(B)(i)(III) of the Social Security Act, as added by 
     subsection (a);
       (ii) an analysis of the financial status and outlook for 
     such facilities based on their designation as a critical 
     access hospital pursuant to such section; and
       (iii) an analysis of any increase in expenditures under the 
     Medicare program under title XVIII of the Social Security Act 
     (42 U.S.C. 1395 et seq.) as a result of such designation, 
     relative to the expected baseline expenditures under the 
     Medicare program if such facilities had not received such 
     designation; and
       (B) an assessment of whether the authority to designate 
     facilities as critical access hospitals pursuant to such 
     section 1820(c)(2)(B)(i)(III) promotes access to care in 
     rural areas.
       (2) Report.--Not later than 6 years after the date of the 
     enactment of this Act, the Comptroller General shall submit 
     to Congress a report containing the results of the study 
     conducted under subsection (a), together with recommendations 
     for such legislation and administrative action as the 
     Comptroller General determines appropriate.

     SEC. 3. MEDPAC STUDY AND REPORT ON PAYMENT SYSTEMS FOR RURAL 
                   HOSPITALS.

       (a) Study.--The Medicare Payment Advisory Commission (in 
     this section referred to as the ``Commission'') shall conduct 
     a study, using data from 2018 through 2028, on payment 
     systems for rural hospitals under the Medicare program under 
     title XVIII of the Social Security Act (42 U.S.C. 1395 et 
     seq.). Such study shall include an analysis of--
       (1) facilities designated as critical access hospitals 
     pursuant to section 1820(c)(2)(B)(i)(III) of the Social 
     Security Act, as added by section 2(a);
       (2) features of payment systems for rural hospitals, 
     including value-based payment systems, that would--
       (A) ensure financial sustainability for the Medicare 
     program; and
       (B) preserve access to care for Medicare beneficiaries;
       (3) if the Commission recommends any new payment system for 
     rural hospitals under the Medicare program, to the extent 
     feasible, the impacts of transition from existing payment 
     systems to such new payment system.
       (b) Report.--Not later than 8 years after the date of 
     enactment of this Act, the Commission shall submit to 
     Congress a report on the study conducted under subsection 
     (a), together with recommendations for such legislation and 
     administrative action as the Commission determines 
     appropriate.
       (c) Definition of Rural Hospital.--In this section, the 
     term ``rural hospital'' means--
       (1) a critical access hospital (as defined in section 
     1861(mm)(1) of the Social Security Act (42 U.S.C. 
     1395x(mm)(1)));
       (2) a subsection (d) hospital (as defined in section 
     1886(d)(1)(B) of the Social Security Act (42 U.S.C. 
     1395ww(d)(1)(B))) that is located in a rural census tract of 
     a metropolitan statistical area (as determined under the most 
     recent modification of the Goldsmith Modification, originally 
     published in the Federal Register on February 27, 1992 (57 
     Fed. Reg. 6725));
       (3) a sole community hospital (as defined in section 
     1886(d)(5)(D)(iii)) of the Social Security Act (42 U.S.C. 
     1395ww(d)(5)(D)(iii)));
       (4) a medicare dependent, small rural hospital (as defined 
     in section 1886(d)(5)(G)(iv) of the Social Security Act (42 
     U.S.C. 1395ww(d)(5)(G)(iv))); and
       (5) a low-volume hospital (as defined in section 
     1886(d)(12)(C)(i) of the Social Security Act (42 U.S.C. 
     1395ww(d)(12)(C)(i))).

     SEC. 4. SUNSET.

       Not later than 9 years after the date of enactment of this 
     Act, the Secretary shall establish a mechanism and provide 
     guidance and technical assistance under which any facility 
     that was designated as a critical access hospital pursuant to 
     a certification by a State under section 
     1820(c)(2)(B)(i)(III) of the Social Security Act, as added by 
     section 2(a), may transition within 1 year to one of the 
     following payment models:
       (1) Such new model or models recommended by the Medicare 
     Payment Advisory Commission in the report submitted under 
     section 3.
       (2) The prospective payment model (or models) under which 
     the facility received payment under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.) prior to being so 
     designated pursuant to such certification.
       (3) Payment as a rural emergency hospital under section 
     1834(x) of the Social Security Act (42 U.S.C. 1395m(x)).

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