Goodsurance

Policy & oversight

Senate Passes Rural Community Hospital Medicare Reimbursement Demonstration Extension by Unanimous Consent; House Has Not Yet Acted

A bipartisan bill that would extend cost-based Medicare reimbursement testing for small rural hospitals cleared the Senate in May 2026 without a single objection, but the House companion has sat at the desk with no floor vote as the August recess ends.

By the Goodsurance editorial teamAugust 12, 2026

The Senate passed S.4460, the Rural Community Hospital Demonstration Program Reauthorization Act, by unanimous consent on May 20, 2026. Introduced by Senator Chuck Grassley of Iowa with bipartisan cosponsors, the bill would extend the Rural Community Hospital Demonstration for an additional five years. The companion measure, H.R.8967, has been held at the House desk since May 21, 2026, with no floor vote announced.

The Rural Community Hospital Demonstration, first authorized in 2003, tests whether cost-based Medicare reimbursement is viable for small rural acute-care hospitals with 50 or fewer beds that do not meet the distance or size thresholds to qualify as Critical Access Hospitals. Cost-based reimbursement allows participating hospitals to recover their actual documented costs of treating Medicare patients rather than relying on prospective payment rates, which can fall short at facilities with limited patient volume.

The Senate unanimously extended a rural Medicare hospital payment program. The House has not yet voted.

Approximately 30 hospitals across multiple states currently participate in the program. A separate CMS application cycle that opened in 2024 added 10 new participants beginning in 2025. Without further congressional action, the demonstration authority for current participants will eventually expire.

The Senate passage came as Congress grappled with several other expiring rural hospital provisions. Medicare Dependent Hospital and Low-Volume Adjustment payment designations are among the rural payment mechanisms also set to lapse December 31, 2026, if Congress does not act before then.

In plain words

Small rural hospitals that treat many Medicare patients but are not large enough for special Critical Access Hospital status get extra payment help through a federal test program. This program lets hospitals recover their real costs from Medicare instead of a fixed rate. The Senate voted to keep this program going for five more years. Every senator agreed, and no one objected. But the House has not voted yet. About 30 hospitals are in this program now. Other rural hospital Medicare payment programs also expire at the end of 2026 if Congress does nothing.

Source: Congress.gov
Read at the source →

More news

Other stories on what is moving in Medicare.

Policy & oversight

CMS Barred a Puerto Rico Medicare Advantage Plan From Accepting New Members for 2027

The Centers for Medicare and Medicaid Services issued an enrollment suspension notice on September 3 prohibiting MMM Healthcare LLC from enrolling new Medicare Advantage beneficiaries under contract H7522 for contract year 2027. Existing members are not affected.

September 23, 2026

Policy & oversight

Missouri Receives More Than 45 Million Dollars in Federal Rural Health Grants for Hospitals, Behavioral Care, and EMS Training

Today's announcement directs funds to facility upgrades at 20 rural hospitals, psychiatric consultation access for children and families, and training for hundreds of emergency medical workers.

September 22, 2026

Policy & oversight

OIG Found About 2.3 Million Dollars in Medicare Telehealth Billing Violations That CMS Safeguards Did Not Catch

A federal audit found that Medicare paid for virtual check-ins and e-visits that violated billing timing rules because CMS and its contractors lacked automated detection tools.

September 21, 2026

Policy & oversight

New Mexico Receives 74 Million Dollars in Federal Rural Health Funds to Expand Specialty Care Across Frontier and Tribal Communities

Six Regional Hub Organizations will use the five-year grant to bring telehealth, e-consults, chronic disease management, and workforce support closer to rural, frontier, and Tribal residents statewide.

September 21, 2026

Policy & oversight

Traditional Medicare Required Prior Authorization for Certain Services in Six States for the First Time Starting January 2026, KFF Finds

A KFF examination of the WISeR Model, active in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington, found it targets services whose spending grew about 400 percent between 2019 and 2024.

September 21, 2026

Policy & oversight

CMS Releases Final Mandatory Participant List for New Medicare Specialist Payment Model Starting January 2027

Cardiologists and certain pain, orthopedic, and neurosurgery specialists treating Medicare patients for heart failure or low back pain in selected areas are now on notice that a mandatory payment model ties their Part B reimbursement to outcomes beginning January 1.

September 20, 2026