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Protecting Rural Hospitals: Five Ways Policymakers Can Make a Difference

The COVID-19 pandemic has changed the landscape of delivering health care for providers in America, and no one has felt the impact more than our rural hospitals. 

Prior to the pandemic, rural health care providers were already operating on slim margins and struggling to sustain operations and services. Now, as providers navigate the “new normal” of pandemic response, rural hospitals are struggling more than ever to keep their doors open and preserve access to care in the communities they serve.

This year during National Rural Hospital Week (November 15-19), the Federation of American Hospitals (FAH) is highlighting five ways lawmakers can support rural providers by:

  • Preventing Medicare and Medicaid payments cuts to rural hospitals.
  • Strengthening our health care workforce.
  • Advancing rural health equity.
  • Expanding access to telehealth.  
  • Making permanent certain payment programs that serve as lifelines to rural hospitals and their patients. 

Prevent Medicare and Medicaid Payment Cuts to Rural Hospitals 

This month, FAH initiated an advocacy campaign urging Congressional leaders to act before the end of the year to prevent harmful reductions in Medicare payments to providers.


Beginning in 2022, hospitals in rural areas and across the country are facing a mandatory four percentage point cut to Medicare payments under statutory Pay-As-You-Go (PAYGO). In order to prevent these cuts from taking effect, we are calling on Congress to waive PAYGO in the next must-pass government funding legislation by December 3. 

Extend the 2% Medicare Sequester Moratorium 

In addition, the 2% Medicare sequester moratorium – originally put in place at the onset of the COVID-19 pandemic – is set to expire on December 31, 2021. While cases and hospitalization rates are decreasing, rural areas continue to be among the hardest hit in the nation. With COVID-19 outbreaks expected to continue into 2022, now is not the time to let the 2% Medicare sequester moratorium expire.  

Failure to waive PAYGO and extend the 2% Medicare sequester moratorium before year-end will result in an unsustainable 6% Medicare payment cut to rural providers who, in the midst of the pandemic response, are also facing unprecedented workforce shortages, supply chain issues, and many other challenging factors to providing care. 

Proposed Cuts to Medicaid DSH / Uncompensated Care Pools

As Congress deliberates the Build Back Better Act, FAH has offered its support of the provision closing the Medicaid coverage gap by providing ACA premium tax credits to uninsured individuals in the 12 remaining non-expansion states. However, FAH strongly opposes a provision in the reconciliation bill that severely penalizes hospitals in non-expansion states by reducing the state’s Disproportionate Share Hospital (DSH) allotment by 12.5% and also reduces uncompensated care (UC) pool payments in some states. This provision would be detrimental to rural hospitals and their patients, and we urge that it be struck from the reconciliation bill.

Strengthen Our Health Care Workforce 

Perhaps the greatest challenge facing rural hospitals today is maintaining an adequate

workforce. Hospitals are seeing a combination of provider burnout, physician and staffing shortages, and difficulty attracting workers to rural areas – all factors causing significant strain on hospital operations.

To help address these shortages, we call on Congress to support rural health care providers by passing:

  • The Healthcare Workforce Resilience Act to recapture 25,000 unused immigrant visas for nurses and 15,000 unused immigrant visas for physicians that Congress previously authorized, and allocate those visas to international physicians and nurses. 
  • The TRAIN Act to prohibit CMS from recouping overpayments made in past years to hospital-based programs when CMS failed to make technical annual updates to the program.
  • Enhanced investment in provider loan repayment programs, including the Nurse Corps, to incentivize providing care in rural and underserved communities.
  • The Conrad State 30 and Physician Access Reauthorization Act to improve and extend the existing program that allows international physicians trained in America to remain in the country if they practice in underserved areas.

At the same time, we also encourage the Administration to expedite and prioritize issuing immigrant visas to foreign-trained nurses and medical professionals to further support rural health.

Rural hospitals are bearing the burden of the provider workforce shortages plaguing the country, and lawmakers should use every tool at their disposal to ensure an adequate workforce is available on the frontlines.

Advance Rural Health Equity 

The events of the past two years exposed the need to address equity in many parts of American society, including health care. We applaud the Administration and Congress’ enhanced focus on health equity measures across the care continuum, and we urge lawmakers not to overlook the significant health disparities found in rural communities.

About 60 million Americans live in rural areas across the country. Patients in these underserved areas tend to be on average older, sicker, and less well-insured compared to their urban counterparts and to the overall population.

One step Congress can take to solve the inequities between rural and urban care is to pass legislation to remove the current, and arbitrary, 12% Medicare DSH Payment Adjustment Cap, which unjustly impacts rural hospitals by creating an unlevel playing field of payment policies for treating low-income, rural Americans. 

By passing Rural DSH Payment Parity legislation, Congress can ensure equity among rural and urban providers and set us on a path toward a healthier rural America.

Expand Access to Telehealth

One area of optimism to emerge from the COVID-19 pandemic is the ability of telehealth to expand access to rural patients and improve the quality of rural health.

Extending and making permanent certain telehealth provisions enjoys broad bipartisan support in Congress and we encourage lawmakers to work together to pass legislation to ensure every rural community has access to broadband and reliable telemedicine services.

The numerous COVID-19 regulatory waivers and implementation of legislatively mandated waiver policies have been critical in allowing hospitals to prepare for surges and continue to care for patients throughout the Public Health Emergency, while also protecting them from risk of exposure to COVID-19. We support efforts to transform certain temporary waivers into permanent Medicare policy, including the elimination of telehealth geographic and originating site restrictions. 

Ensure Rural Hospitals Can Keep Their Doors Open for Communities

The Medicare Dependent Hospital (MDH) and currently expanded Low-Volume Hospital (LVH) programs should be made permanent to ensure patient access to hospitals in rural America. These programs, which currently sunset in September 2022, help relieve some of the financial pressure on rural providers.

FAH is committed to the permanent extension of the current MDH and LVH programs that are essential for rural hospitals to continue to serve their communities. We urge policymakers to permanently extend these vital programs.

FAH will continue to work with lawmakers and regulators to achieve the above goals in order to increase access to quality health care for the 60 million people who call rural America home.