H.R. 6240: Rural Hospital Closure Relief Act of 2025

This bill, known as the Rural Hospital Closure Relief Act of 2025, proposes to amend the Social Security Act to provide changes regarding the designation of critical access hospitals (CAHs) under the Medicare program. The main points of the bill are as follows:

1. Waiving the 35-Mile Rule

The bill seeks to restore the authority of states to waive the current 35-mile limit for the designation of certain hospitals as critical access hospitals under Medicare. This would allow hospitals located within 35 miles but deemed essential for healthcare access to be classified as CAHs even if they don’t meet the distance requirement.

2. Criteria for Hospital Designation

The criteria for hospitals to be considered as critical access hospitals include:

• The hospital must be a sole community hospital, a Medicare dependent small rural hospital, or other specified types of rural hospitals.
• It must be located in a rural area or a specified part of a metropolitan area.
• The hospital needs to be in a region with a high poverty level or in an area with a shortage of healthcare professionals.
• It should have negative operating margins in the preceding two years before certification.

3. Limitations on CAH Designations

The bill sets limitations on how many hospitals can be designated as critical access hospitals:

• No more than 120 facilities can be classified as CAHs nationwide.
• Within a single state, no more than 5 facilities can receive this designation.

4. Certification Process

For a hospital to be certified as a critical access hospital, it must:

• Submit an application that includes details on governance and financial sustainability.
• Commit to maintaining specific healthcare services that are in demand or limited in the service area.

5. Reporting and Compliance

Hospitals designated as critical access hospitals will be required to provide reports on their operations and changes to their service lines. If they fail to comply with reporting requirements, their CAH certification may be revoked.

6. Studies and Reports

The bill mandates several studies to evaluate:

• The characteristics and financial health of hospitals that receive CAH designation under the new rules.
• The impact of the designation on access to care in rural areas.

A report from the Government Accountability Office (GAO) is due 6 years after enactment, while a report from the Medicare Payment Advisory Commission (MedPAC) is expected 8 years after enactment.

7. Adjustments for Specific Territories

The bill also modifies certain requirements for rural hospitals in Guam, American Samoa, the Northern Mariana Islands, and the Virgin Islands, providing flexibility in acute care inpatient bed numbers.

8. Future Actions and Sunset Provision

Within 9 years after the enactment, any hospital designated as a CAH will have the opportunity to transition to new payment models as recommended by the Medicare Payment Advisory Commission to ensure sustainability.

9. Implementation Timeline

The Secretary of Health and Human Services is required to issue regulations to implement the provisions of the bill within one year after its enactment.

Relevant Companies

• HCA Healthcare (HCA) - HCA operates numerous hospitals across the United States and could be impacted by changes in critical access hospital designations, affecting their operational and financial strategies in rural areas.
• Amedisys, Inc. (AMED) - Amedisys, which provides home health care and could see changes in demand influenced by the status of nearby critical access hospitals.