WASHINGTON – The Finance Committee today passed legislation from Sens. Chuck Grassley of Iowa, Michael Bennet of Colorado, Lisa Murkowski of Alaska and Jerry Moran of Kansas to extend a Medicare demonstration program that helps rural hospitals in sparsely populated states keep their doors open.

“By extending the demonstration for five more years, this bill allows medium-sized hospitals participating in the demonstration to continue to seek out opportunities to expand and improve health services needed in their rural communities,” Grassley said.  “In Iowa, this benefits hospitals in Newton, Grinnell, Carroll, and Spirit Lake.”

“Colorado’s rural communities, like Delta County, Steamboat Springs, and Sterling, face unique challenges to ensuring access to critical health care services,” Bennet said. “This bill extends a lifeline to help rural hospitals continue to offer 24-hour emergency and inpatient care.” 

“Access to hospitals and quality health care services determines whether Kansans may remain in the communities they call home and whether their children may return to raise families of their own,” Moran said.  “To preserve medical access for Kansans and strengthen rural communities, health care providers must receive appropriate reimbursement for the care they provide. I will continue to work to advance legislation that reflects the realities of providing care in rural areas.”

The Finance Committee, with jurisdiction over Medicare, unanimously passed S. 607, the Rural Community Hospital Demonstration Extension Act, introduced in February.

Initiated in 2004, the Rural Community Hospital Demonstration Program is a five-year program created to help rural hospitals in the country’s 10 most sparsely populated states. The program was renewed for another five years in 2010 and expanded to include 20 of the most sparsely populated states. This program provides participating hospitals and tests the feasibility and advisability of a cost-based payment model for acute-care inpatient services. 

Eligible hospitals must be located in a rural area and within one of the 20 most sparsely populated states (Alaska, Arizona, Arkansas, Colorado, Idaho, Iowa, Kansas, Maine, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, and Wyoming); must have fewer than 51 inpatient beds; must offer 24-hour emergency care services; and are not eligible for designation as a Community Access Hospital.

Approximately 35 hospitals have participated in this program since its inception. Currently, there are 23 hospitals participating in the Rural Community Hospital Demonstration Program.