Washington, D.C. – Today, U.S. Reps. Terri Sewell (AL-07) and Drew Ferguson (GA-03), introduced the Save Rural Hospitals Act of 2023. This legislation would help curb the alarming trend of hospital closures in rural communities by ensuring that rural hospitals are fairly reimbursed by Medicare.
“All across Alabama, we’ve seen the devastating impact of rural hospital closures which only accelerated during the COVID-19 pandemic,” said Rep. Sewell. “It is unacceptable that so many Alabamians are being forced to drive hours to receive life-saving care. With this bipartisan legislation, we’re taking action to help keep rural hospitals open by ensuring that they are fairly reimbursed for the critical services they provide. I’m proud to join Congressman Ferguson in this effort and urge my colleagues to join us!”
“Rural hospitals play an essential role in serving their communities and providing vital care to patients,” said Rep. Ferguson. “Georgia has one of the lowest reimbursement rates nationwide, and the Save Rural Hospitals Act would help put rural hospitals in the Peach State – and across the country – on a level playing field by raising their Medicare reimbursement levels. I am proud to work with Representative Sewell on this bipartisan legislation.”
In the U.S., rural hospitals are closing at an alarming rate with more than 194 rural hospitals having closed since 2005. During the COVID-19 pandemic, rural hospital closures accelerated to record levels. In February, the Alabama Hospital Association warned that more than a dozen of the state's rural hospitals are at immediate risk of closing. Low patient volumes and significant financial strain are often the primary factors in these closures, compounded by the flawed Medicare Area Wage Index that results in rural hospitals receiving disproportionately low reimbursement rates.
The Save Rural Hospitals Act would establish an appropriate national minimum (0.85) for the Medicare Area Wage Index to ensure that rural hospitals receive adequate 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.
“We applaud Congresswoman Sewell's steadfast priority for initiatives that strengthen access to health care for the most vulnerable citizens in Alabama,” said Danne Howard, Deputy Director of the Alabama Hospital Association. “The Save Rural Hospitals Act will help address the decades-old flaw in the Medicare reimbursement methodology that has negatively impacted Alabama hospitals more than in any state in our nation. Our hospitals have survived on reserves, cost-cutting measures, staff reductions, and eliminating services. Those options are counter to the mission of Alabama's hospitals in providing quality care to their communities. The compounded impact of the Medicare disparity has created pressures that are unsustainable. Our options have been exhausted. If nothing changes, more hospitals across our state will be forced to make difficult decisions about their future operations, the services and the jobs they support. Rural America has experienced more than 100 hospital closures since 2010, and many continue to face limited or no access to specialty care. The Save Rural Hospitals Act will ensure that Alabamians have equal access to care and are not disadvantaged for living in a majority rural state.”
Companion legislation was introduced in the U.S. Senate by Sen. Mark Warner (D-VA).
The Save the Rural Hospitals Act of 2023 is available here.