On June 3, 2025, Representative Graves (R-MO) and Representative Nikki Budzinski (D-IL) reintroduced H.R. 3684, the Save America’s Rural Hospitals Act. This bill proposes to address key financial and administrative challenges that rural hospitals currently face. The Save America’s Rural Hospital Act is updated and enhanced from last Congress to include new, much-needed reforms aimed at tackling the biggest pain points for rural hospitals.
This will support the financial stability of rural hospitals by:
- Eliminating Medicare sequestration for rural hospitals and Critical Access Hospitals (CAHs)
- Reducing cuts to reimbursement of bad debt from 30% to 15%
- Extending disproportionate share payments to sole community hospitals (SCHs) and Medicare Dependent Hospitals (MDHs)
- Updating base years for MDHs and SCHs paid under their hospital specific rates to FY 2024
This bill will remove administrative burdens and increase flexibilities for Critical Access Hospitals (CAHs) by:
- Eliminating the 96-hour average in-patient stay requirement for CAH designation
- Eliminating the 3-day hospitalization requirement for swing bed utilization
- Waiving the 35-mile distance requirement rule for certain CAHs by reopening the CAH necessary provider designation
- Equalizing beneficiary copayments for services furnished by CAHs compared to prospective payment system hospitals
- Reauthorizing the Medicare Rural Hospital Flexibility Program
Further, this bill improves access to health care for rural constituents by:
- Permanently allowing Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) to offer telehealth and improving Medicare reimbursement for such services
- Permanently increasing Medicare payments for rural ground ambulance services
Finally, this bill helps address rural workforce shortages associated with low provider retention by:
- Permanently increasing area wage index adjustments for hospitals below the 25th percentile in a neutral budget manner. This would effectively codify the low wage index policy implemented by the Centers for Medicare and Medicaid Services (CMS) since FY 2020 that has since been blocked by a recent court decision. In this year's Inpatient Prospective Payment System proposed rule, CMS is rescinding this policy. Codifying the policy in statute will reinstate CMS' authority to provide this benefit to low wage index hospitals.
- Establishing a floor on the area wage index for hospitals not located in frontier states for both inpatient and outpatient services
Please find NRHA's section-by-section summary here.
Please find our new rural hospital 101 resource here and rural hospital legislative priorities here.
If you have questions or would like additional information, please reach out to Alexa McKinley Abel (amckinley@ruralhealth.us).