H.R. 1805 — ARCH Act

This section extends Medicare-dependent hospital (MDH) payment adjustments under the Medicare inpatient prospective payment system (IPPS)—which provide small rural hospitals (i.e., those with Medicare inpatient days comprising at least 60% of total inpatient days) a blended rate of prospective and cost-based payments—to October 1, 2031 (from April 1, 2025), including conforming extensions of the target amount calculation and permission for hospitals to decline sole community hospital reclassification through FY2031 (from FY2024 and partial FY2025 ending March 31, 2025). It also extends low-volume hospital (LVH) payment adjustments—which increase per-discharge payments by up to 25% for hospitals with Medicare discharges below specified thresholds (i.e., fewer than 1,300 in FY2023 or later)—through FY2031 (from FY2024 and partial FY2025 beginning October 1, 2024, and ending March 31, 2025), with incremental adjustment payments through FY2032 (from partial FY2025 beginning April 1, 2025, and FY2026).

This section requires the Comptroller General of the United States to submit to Congress, not later than 180 days after the date of enactment, a report on Medicare rural hospital classifications that includes the following: (1) the total number of hospitals classified in any of the five fiscal years preceding enactment as a critical access hospital, rural emergency hospital, rural referral center, sole community hospital, Medicare-dependent small rural hospital, or low-volume hospital; (2) an analysis of overlaps between criteria for these classifications; (3) recommendations for simplification of the classifications and overlaps, and for criteria changes to promote financial sustainability for rural hospitals and improve rural health care access; and (4) projected effects of allowing sole community hospitals and Medicare-dependent small rural hospitals to use a cost reporting period beginning in FY2021 to calculate adjusted payments under Medicare's inpatient hospital prospective payment system.