Congresswoman Terri Sewell

Representing the 7th District of Alabama

Rep. Sewell Introduces Legislation to Reduce Financial Burden on Rural Hospitals caused by the COVID-19 Pandemic

Jun 22, 2021
Press Release

Washington, D.C. - Today, U.S. Reps. Terri Sewell (AL-07) and Drew Ferguson (GA-03) introduced the Save Rural Hospitals Act of 2021This legislation would help curb the trend of hospital closures in rural communities by ensuring fairness in Medicare hospital payments through reimbursements from the federal government. As a result of the COVID-19 public health emergency, rural hospitals continue to lose revenue despite playing an essential role in serving their communities and providing lifesaving care during the largest public health crisis in a century. 

“As we continuously work to rebuild after the devastation of the past year, it is critically important that we acknowledge the lasting impact that the COVID-19 pandemic has had on rural hospitals across this nation,” said Rep. Sewell. “Even before the pandemic, rural hospitals struggled with inadequate reimbursements, low volume, and high operating costs. Now it is imperative that we provide the reimbursements these hospitals so desperately need. That is why I am proud to introduce the Save the Rural Hospitals Act of 2021 to ensure those in rural and underserved communities continue to receive the quality, affordable care they deserve.”

“By raising the Medicare reimbursement levels for rural hospitals, we will be strengthening health care for our rural and underserved communities,” said Rep. Ferguson. “Georgia has one of the lowest reimbursement rates nationwide, and we must ensure a level playing field for rural hospitals in the Peach State – and across the country. I am proud to work with Representative Sewell on this bipartisan legislation.”

Background on the Save the Rural Hospitals Act of 2021: 

In the U.S., rural hospitals are closing at an alarming rate with more than 130 rural hospitals having closed since 2010. During the COVID-19 pandemic, rural hospital closures accelerated to record levels with more than 20 rural hospitals closing in 2020. Low patient volumes and significant financial strain are often the primary factors in these closures and are compounded by the flawed Medicare Area Wage Index that results in rural hospitals receiving disproportionately low reimbursement rates. 

This legislation would establish an appropriate national minimum (0.85) for the Medicare Area Wage Index to ensure that rural hospitals receive their payment for the care they provide, while preserving the existing reimbursements for urban hospitals. This legislation would also help ensure fairness in reimbursements for hospitals across the country—including the many hospitals that are facing closures in rural areas—and fix severe and disproportionate disadvantages that unfairly penalize hundreds of communities and hospitals across the country. 

Companion legislation was introduced in the U.S. Senate by Sens. Mark Warner (D-VA), John Corryn (R-TX), Marsha Blackburn (R-TN), Rev. Raphael Warnock (D-GA), and Tim Kaine (D-VA). 

The Save the Rural Hospitals Act of 2021 is available here.