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Rural Health Policy Update

March 2024

Update provided by Andrew Coats, NOSORH Legislative Liaison 

Congressional Leadership Moves Ahead with Continuing Resolution
As February ends, House and Senate leadership appear to have reached a “deal in principle” on extending FY 2023 funding deeper into March. The new deadlines for Congress to pass an FY 2024 bill are now March 8 and March 22, respectively. The former deadline includes FDA funding, and the latter includes HHS and rural health programs.      

As a reminder, below are the FY 24 funding levels for rural health programs that have been passed through the committee level in each chamber:   

Medicare Rural Hospital Flexibility program  

  • House:  $74,277,000 of that amount, $25,942,000 for the Small Rural Hospital Improvement Grant program  
  • Senate: $64,277,000 of that amount, $20,942,000 for the Small Rural Hospital Improvement Grant program 

Rural Emergency Hospital Technical Assistance  

  • House: $5,000,000 
  • Senate: $5,000,000 

State Offices of Rural Health grant program  

  • House: $12,500,000 
  • Senate: $12,500,000 

Rural Residency Programs  

  • House: $12,700,000 
  • Senate: $12,500,000 

Rural Communities Opioids Response Program   

  • House: $0 
  • Senate: $155,000,000 

Chartis Study Reveals Dire Reality for Rural Hospitals
Healthcare advisory firm Chartis released new research indicating that 50% of the nation’s rural hospitals are operating at a loss, and 418 are vulnerable to closure. Key findings from this study include: 

  • 50% of America’s rural hospitals are operating in the red. 
  • 55% of independent rural hospitals are operating in the red, while 42% of system-affiliated rural hospitals are operating at a loss. 
  • Medicare Advantage now accounts for 35% of all Medicare-eligible patients in rural communities. In 7 states, penetration exceeds 50%. 
  • A record 28 rural communities lost access to inpatient care last year as a result of rural hospital closures or conversion to a model excluding inpatient care. 
  • 418 rural hospitals are ‘vulnerable to closure.’ 
  • 267 rural hospitals—nearly 25% of America’s rural OB units—dropped OB services between 2011 and 2021. 
  • 382 rural hospitals stopped providing chemotherapy services between 2014 and 2022. 

Notable Legislation Introduced this Month

  • 340B Discussion Draft: A bipartisan group of senators, Sens. John Thune (R-SD), Debbie Stabenow (D-MI), Shelley Moore Capito (R-WV), Tammy Baldwin (D-WI), Jerry Moran (R-KS) and Ben Cardin (D-MD), released for stakeholder feedback a discussion draft of legislation to clarify in statute Congress’ intent for the 340B program to help safety net providers maintain, improve and expand patient access to health care services by requiring drug manufacturers that participate in Medicaid and Medicare Part B to provide discounts and rebates to covered entities that serve a disproportionate share of low-income and underserved patients. The draft Supporting Underserved and Strengthening Transparency, Accountability, and Integrity Now and for the Future of 340B Act or the “SUSTAIN 340B Act” includes many provisions to clarify covered entities’ use of contract pharmacies and enhance program transparency.  
  • Legislation filed to define “essential hospital”: A bill to “amend title XVIII of the Social Security Act to establish a definition of essential health system in statute” was introduced by Rep. Lori Trahan (D-MA) and Rep. David Valadao (R-CA) to create a new federal designation: “essential health system.” The bill’s crafters said the measure would be given to the more than 1,000 hospitals nationwide that deliver five times more uncompensated care on average than their peers but are historically underfunded. The qualification proposed defines eligible hospitals as private, non-profits designated as a “disproportionate share” qualifier with a Medicare disproportionate % of at least 35%.  

Senate HELP Ranking Member Releases Health Data Privacy Report
Senate HELP Committee Ranking Member Sen. Bill Cassidy released a report outlining ways to improve privacy protections for Americans’ crucial health data. 

New House Artificial Intelligence Taskforce Created
House Leadership announced the creation of a 24-member bipartisan panel tasked with examining how Congress should respond to AI. The group will aim to release a comprehensive report on AI, providing principles, recommendations, and bipartisan policy proposals on the technology. Majority Leader Schumer stated he remains committed to acting within the year on AI legislation, though stakeholders are skeptical given the task in an already busy election year.