The top 5 policies to transform rural health

The National Rural Health Association is mobilizing to work with policymakers to transform and uplift health care to meet the needs of the more than 60 million rural Americans. The rising numbers of rural hospital closures and workforce challenges have reached a tipping point in rural communities across America. As new leadership comes to D.C., it’s the ideal time to implement transformative policy changes to improve rural health care.

1. Reduce regulatory burden on small rural providers.

Since 2010, over 180 hospitals have closed or discontinued inpatient services. Nearly 50 percent of rural hospitals operate on negative margins. When a rural hospital closes, not only does the community lose access to vital health care, but a major employer and community lynchpin exits, affecting the larger community. Two major rulemakings by the Centers for Medicare and Medicaid Services (CMS) impose new, major burdens on already strained rural providers. NRHA calls on the Trump Administration to rescind these burdensome rules. 

• The Minimum Staffing Standards for Long-Term Care Facilities rule created mandatory nursing staff levels for nursing facilities with no true exemptions for rural facilities. Implementing federal staffing mandates will not increase availability of qualified workers in rural areas with current workforce deficits and will result in closure of rural facilities. 
• The CMS 2025 Medicare Outpatient Prospective Payment System rulemaking cycle finalized new conditions of participation (COPs) for hospitals that provide obstetric (OB) services, including rural hospitals and critical access hospitals. The current trend of OB unit closures, coupled with the impact one-size-fits-all COPs on rural hospitals and CAHs, will lead to loss of OB services in rural communities across the country.
  
  

2. Secure key rural health care programs.

Conditions in rural communities make providing health care challenging, including low patient volumes, complex patient population, workforce shortages, and inadequate reimbursement rates. Several special rural payment designations and federal programs exist to meet the needs of and alleviate particular challenges for subsets of rural providers. The following actions are needed to protect critical safety net rural programs.

• Medicare-Dependent Hospitals, hospitals receiving a Low Volume Hospital payment adjustment, and rural ground ambulance providers are stuck in an unpredictable cycle of Medicare payment “extenders” reliant upon Congress to reauthorize their designations. NRHA advocates for permanent designation, or a minimum 5-year extension, of these programs as part of a health care package. Rural providers need certainty around Medicare reimbursement for budgeting and planning purposes. A series of short-term extenders for these designations puts hospitals in an uncertain position that makes long-term financial planning more difficult. 
• The U.S. Department of Health and Human Services (HHS) implements key programs aimed at improving rural health delivery and outcomes. NRHA is working alongside members of Congress to ensure that core programs and key pilots are authorized, ranging from supporting rural hospitals through the Medicare Rural Hospital Flexibility Program, to providing start-up funding for rural physician training (Rural Residency Planning and Development Program) to combating opioid use (Rural Communities Opioid Response Program), to the Office of Rural Public Health at the Centers for Disease Control and Prevention.
  
  

3. Make Medicare Advantage work for rural health care.

Medicare Advantage (MA) enrollment has grown exponentially in recent years and rural areas are not immune from this trend. Almost half of rural beneficiaries are enrolled in an MA plan instead of Traditional Medicare, leading to ripple effects for rural providers. Providers that receive cost-based reimbursement, like CAHs, oftentimes do not receive payment from MA plans that is on par with their Traditional Medicare reimbursement, eroding the importance of their special rural designation. Further, plans delay and deny payments to rural providers that have already furnished the necessary services to patients and generally do not have ample cash on hand to sustain these losses. Given workforce shortages from physicians to front desk staff, rural providers struggle to keep up with prior authorization requests, denials, and appeals. NRHA looks to Congress and CMS to reign in prior authorization practices by MA plans and enforce the timeliness and adequacy of payments to rural providers.

4. Stop implementation of payment policies harmful to rural providers. 

Provider payment reforms being discussed in D.C. do not account for how rural providers on the ground would be disproportionately impacted due to their unique funding mechanisms and financial instability. Rural hospitals see a higher public payer mix and more uninsured patients and cannot sustain changes to Medicare and Medicaid financing. As such, NRHA strongly opposes attempts to expand site neutral payment policies. Data from CMS indicates that rural hospitals’ reliance on outpatient services has grown, with outpatient revenue rising from 66 percent in 2011 to nearly 75 percent in 2021. Medicare revenue represents a large share of this income, making full Medicare outpatient payments crucial for rural hospitals compared to their urban counterparts. While well-intentioned, site neutral policies will burden rural hospitals that rely heavily upon off-campus outpatient departments to meet their communities’ needs.

5. Sustain rural health care infrastructure.

Rural health care financing is made up of several different puzzle pieces of funding sources, like 340B savings, public and private payers, state and federal grant funds, and applicable rural payment designations. Congress must take the following actions to bolster these funding streams and in turn support key service lines and rural access to local care:

• Make transformative changes to Medicare payment for rural hospitals, including eliminating sequestration, extending disproportionate share payments for sole community and Medicare-dependent hospitals paid under their hospital specific rate, codifying the low wage index policy promulgated by CMS from 2020 to 2024, and establishing an area wage index floor.
• Authorize the Rural Hospital Technical Assistance program at the Department of Agriculture and continue to adequately fund the Rural Hospital Stabilization pilot program at FORHP.
• Make technical changes to the Rural Emergency Hospital (REHs) designation to make it a more accessible and sustainable option for rural hospitals considering conversion.
• Protect the 340B Drug Pricing Program for rural covered entities, particularly the use of contract pharmacies which enhance access for rural patients that do not live near a hospital or clinic.
• Improve rural hospitals’ ability to respond to obstetric emergencies. In the midst of an obstetric unit closure crisis in rural America, ensuring providers are well-equipped to manage obstetric emergencies without a dedicated labor and delivery unit is crucial.

These targeted policies would protect, sustain, and improve health care delivery for rural patients. NRHA calls on Congress and the Administration to prioritize rural health and ensure rural communities have the same accessible, quality health care that their urban counterparts enjoy.

For additional information, please see: Rural priorities for the Trump Administration, NRHA’s 119^th Legislative Agenda, and NRHA’s website.