December 9, 2023

Two Medicare programs that boost rural hospital payments would be temporarily extended as part of a stopgap federal spending bill that advanced past an initial vote in the Senate Tuesday.

Congress must act before the end of the week to prevent a government shutdown because the federal fiscal year ends Friday. Senate Majority Leader Chuck Schumer (D-N.Y.) unveiled the spending package Monday. Seventy-two senators supported moving forward on the bill Tuesday, giving it enough support to prevent a Republican filibuster on the final vote, which is expected this week. House leaders have yet to make public the lower chamber’s version of the continuing resolution to keep the government operating.

Under the Senate measure, the Medicare Dependent Hospital and Low-Volume Hospital programs would be extended through Dec. 17. If Congress fails to approve those extensions before Saturday, the former program would expire and the latter would revert to narrower criteria that limit hospital participation. 

Congress established the Medicare Dependent Hospital program to boost financial support for rural hospitals with at least 60% of their patients covered by Medicare. About 180 hospitals—6% of all inpatient prospective payment system facilities—met the requirements this year, according to the Congressional Research Service, Congress’ nonpartisan policy institution. Medicare made about $119 million in additional payments through the program in fiscal 2018, according to a 2020 report from the Government Accountability Office. That same year, Congress extended the policy for another five years.

The continuing resolution would extend the current eligibility standards for the Low-Volume Hospital program. Congress broadened the criteria in 2018 to include hospitals with fewer than 3,800 discharges that are located more than 15 miles from the nearest inpatient hospital. Just under 20% of inpatient prospective payment system hospitals qualify for the, according to the Congressional Research Service. If Congress doesn’t pass an extension, eligibility for this program would be limited to facilities that are more than 25 miles from the nearest other hospital and that discharge fewer than 200 patients per year.

With many rural hospitals beleaguered by rising costs, provider consolidation and challenges associated with the COVID-19 pandemic, hospital groups have signaled their support for temporary funding measures as well as proposals to further extend and strengthen the two Medicare programs.

The inclusion of these Medicare rural hospital provisions in an otherwise targeted spending bill is “extremely significant,” Federation of American Hospitals President and CEO Chip Kahn said. “The big issue is hopefully not whether but rather for how long they’ll authorize the programs to go forward,” he said. The American Hospital Association supports legislation extending the Medicare Dependent Hospital and Low-Volume Hospital programs, a spokesperson said. 

Lawmakers including Sen. Bob Casey (D-Pa.) introduced bills to permanently extend these two rural hospital programs. ”We are looking for additional paths to get a longer bill done, but nothing concrete at this point,” a Casey spokesperson wrote in an email. Rep. Sam Graves (R-Mo.), who authored similar legislation, is working to pass his either on its own or as part of a broader package, a spokesperson said.

The Senate spending bill does not address the continuing federal response to the COVID-19 pandemic or the monkeypox outbreak, despite a White House request for a combined $26 billion to tackle the infectious diseases.

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