Rural Community Hospital Demonstration Program Reauthorization
Key claim: This bill would keep a Medicare experiment going for five more years so certain small rural hospitals that are too large to be critical access hospitals can still be paid based on their actual costs, and hospitals already in the program between late 2024 and the start of 2027 could stay in during the extension.
Abstract
(HR8967 · 119th Congress) Rural Community Hospital Demonstration Program Reauthorization This bill extends the Rural Community Hospital Demonstration Program for an additional five years. The program tests the feasibility of cost-based reimbursement under Medicare for small rural hospitals that are too large to qualify for special payment as critical access hospitals. The bill specifies that hospitals that participate in the program between December 30, 2024, and January 1, 2027, may continue to participate during the five-year extension period. Latest action (2026-05-21): Referred to the House Committee on Ways and Means.
Why this matters
Reauthorization determines whether a small set of rural hospitals continue receiving Medicare payments based on their actual costs rather than standard prospective payment rates, which affects their financial viability and the availability of inpatient care in rural communities. Because these hospitals are too large to convert to Critical Access Hospital status, the demonstration is one of the few tools preserving cost-based reimbursement for them, and a lapse would shift them back to standard IPPS rates.