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Reps. Cartwright, Young Introduce Bipartisan Bill to Support Rural Hospitals

May 22, 2020
Press Release

Washington, D.C. – Today, U.S. Representative Matt Cartwright (PA-08) and Republican U.S. Rep. Don Young (AK-At Large) introduced the Rural Hospital Sustainability Act to provide financial stability to struggling rural hospitals, and maintain access to quality health care for rural Americans throughout the COVID-19 pandemic.

Even before the coronavirus pandemic, many rural hospitals that depend on fee-for-service payments faced financial uncertainty as their communities’ populations dwindled. In 2019, 1 in every 5 rural hospitals was at risk of closure due to financial instability, and nearly half of all rural hospitals in Pennsylvania were operating with negative margins. The pandemic has only added to the financial strain, as elective procedures have been postponed and as patients have delayed seeking care for fear of being exposed to the virus.

The Rural Hospital Sustainability Act would provide a financial backbone for struggling rural health systems by expanding upon an existing demonstration program through the Centers for Medicare & Medicaid Services (CMS). It would allow states to voluntarily implement a global budget for rural hospitals in lieu of the existing fee-for-service model. Under this program, private and public insurers pay rural hospitals a fixed amount of revenue — a global budget — to cover all inpatient and hospital-based outpatient services.

“No one should have to worry about where they can get medical treatment, especially during a public health crisis,” said Rep. Cartwright. “If we don’t make a change, some struggling hospitals will be forced to shut down and vulnerable patients in rural areas will have to travel longer distances to receive medical services. This legislation provides hospitals with the financial stability to help them focus on treating patients, not balancing the books.”

“Alaska is the biggest state in the Union, and our rural hospitals have been a lifeline to many communities in the most remote areas of our state,” said Congressman Don Young. “More than ever, our rural hospitals are feeling the financial strain caused by the COVID-19 pandemic. Our legislation is critical to helping provide financial certainty and a sense of stability to rural health care providers across our state and nation.”

This legislation has been endorsed by the Hospital and Healthsystem Association of Pennsylvania and the National Rural Health Association.

“The COVID-19 crisis has taken an especially troubling toll on Pennsylvania’s rural hospitals, many of which already were financially strained. Now, more than ever, Pennsylvanians living in rural areas cannot afford to lose the essential health care, community health and wellness resources, and family-sustaining jobs that our hospitals provide,” said Andy Carter, President and CEO, The Hospital and Healthsystem Association of Pennsylvania. “HAP thanks Representative Cartwright for sponsoring this important legislation which will continue efforts already underway in Pennsylvania under the Rural Health Model, to evaluate new payment mechanisms as a means for ensuring rural hospital viability.”

“NRHA applauds Representatives Cartwright and Young for their introduction of the Rural Hospital Sustainability Act,” said Alan Morgan, CEO of National Rural Health Association. “Rural hospital infrastructure must change to ensure rural communities have access to sustainable, quality rural hospitals and health clinics. This important legislation will expand the innovative and transformational Global Budget Model throughout rural America.”

Geisinger President & CEO Dr. Jaewon Ryu said the following in support of the Rural Hospital Sustainability Act:

“Geisinger supports the testing of innovative payment models for rural hospitals such as global budgets,” said Ryu. “Rural hospitals need a pathway to transform in a manner that is sustainable. Global budgets offer a promising path for hospitals to continue to offer essential health care in rural communities.”

Three states – Maryland, Vermont and Pennsylvania – operate under existing CMS approved payment models. In Pennsylvania, three out of the five rural hospitals that operated with a global budget in 2019 experienced a significant improvement in their operating margins.

Companion legislation was previously introduced in the U.S. Senate by Senator Bob Casey (PA).

Text of the bill can be viewed here.