Chuck Grassley

United States Senator from Iowa





Grassley, Schumer Introduce Bill to Extend Key Medicare Rural Hospital Programs

Feb 03, 2015

WASHINGTON – Sens. Chuck Grassley (R-Iowa) and Chuck Schumer (D-N.Y.) continue their support of rural health care into the new Congress and have introduced new legislation to permanently extend two key Medicare rural hospital programs. 

“These programs bring a lot of value for rural residents and taxpayers,” Grassley said.  “Small, rural hospitals offer good quality health care at a cost that compares well with urban hospitals’ cost.  Congress should extend the programs that help keep the doors open for rural Medicare beneficiaries.”

“Strong rural hospitals are essential to quality care, and they are the lifeblood of rural communities,” said Schumer. “These hospitals serve a vital public need, employ several thousands of people, and they deserve our support in their continuous efforts to provide the highest level of care to residents. These two federal programs are a key lifeline for these hospitals, and it is time to extend them on a permanent basis. Rural hospitals need certainty that this critical funding stream will be available year after year, and this bill will do just that.” 

The Grassley-Schumer bill, S. 332, introduced last night, would permanently extend the Medicare Dependent Hospital (MDH) and Low-Volume Hospital (LVH) programs.  The Medicare Dependent Hospital designation helps rural hospitals that otherwise would struggle to maintain financial stability under Medicare’s fee schedule because of their small size and the large share of Medicare beneficiaries who make up their patient base. There are currently more than 200 Medicare Dependent Hospitals in 32 states, six of which are in Iowa and eight in New York.  Congress enacted payment modifications to help keep these hospitals open as a critical health care source for rural Medicare beneficiaries.  

The Low-Volume Hospital designation similarly offers hospitals that treat a low number of beneficiaries a payment formula that recognizes the fixed costs of treating these patients relative to the prospective payment system that favors high beneficiary volume. This funding is critical to the survival of these programs because they are frequently under financial stress due to their low volume in comparison to their urban counterparts. 

Without an extension, these two programs will expire April 1, 2015.  Medicare Dependent Hospitals and Low-Volume Hospitals are the safety net providers for rural Americans and are extremely important to the economy of rural areas.  In rural communities, hospitals are one of the biggest employers in the area, accounting for around 14 percent of total employment. For more than 1.3 million residents of rural Iowa and 1.5 million rural New Yorkers, these hospitals guarantee access to care and strengthen the economy. These programs have helped end the cycle of hospital closures, Grassley and Schumer said.