Source: United States House of Representatives – Congresswoman Carol Miller (R-WV)
“Living in West Virginia, I know that rural hospitals depend on strong federal support to serve their communities. Hundreds of thousands of Americans rely on these facilities for essential health care, yet urban hospitals have been exploiting a loophole to claim both urban and rural status, siphoning resources meant for rural providers. This bill protects rural hospitals by ending that practice and ensuring federal support stays where it is truly intended, serving rural communities,” said Congresswoman Carol Miller.
“When it comes to health care, rural Ohioans need someone who will fight for them in Congress. And although there are federal benefits and programs that have been designed to uplift rural hospitals, urban hospitals in big cities like Manhattan, Boston, and San Francisco are taking advantage of a harmful loophole to siphon benefits intended for rural hospitals. I’m proud to right this wrong and protect the integrity of taxpayer dollars, rural hospitals, and rural America,” said Congressman Dave Taylor.
A copy of the bill text can be found here.
Background
- Before 2016, CMS generally prevented urban hospitals that reclassified as “rural” from simultaneously receiving both urban and rural benefits. However, in 2016, two federal court ruled that urban hospitals could classify themselves as both urban and rural.
- This opened the door for urban hospitals to double-dip on benefits and essentially choose the best of options offered to both urban and rural hospitals
- Through dual classification, these hospitals can access higher urban Medicare wage indexes while also qualifying for rural-only benefits, such as a lower eligibility threshold for the 340B Drug Pricing Program, increased graduate medical education funding, and potential designation as sole community hospitals, rural referral centers, or Medicare-dependent small rural hospitals.
- These advantages divert limited federal resources away from truly rural hospitals that rely on them to keep their doors open and maintain access to care.
- This loophole has led to a dramatic increase in dual classifications, rising from just three hospitals in 2017 to more than 425 by 2023.
- The Defend Rural Health Act restores the integrity of federal rural health programs by eliminating the “dually classified” loophole and establishing stricter eligibility standards.
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