H.R. 3778 — PEAKS Act

This section modifies the definition of a rural area for purposes of direct Medicare payment to critical access hospitals (CAHs) for ambulance services under the ambulance fee schedule by allowing a 15-mile drive threshold (in addition to the existing 35-mile drive) from the nearest hospital, CAH, or ambulance provider in cases of mountainous terrain or areas with only secondary roads available. (CAHs are small rural hospitals eligible for cost-based Medicare reimbursement and may bill Part B directly for ambulance services originating in such rural areas and transported elsewhere.)

This section deems certain critical access hospitals (CAHs)—rural facilities eligible for enhanced Medicare cost-based reimbursement if located at least 35 miles from another hospital facility (or 15 miles for mountainous terrain or secondary roads)—to continue meeting the 15-mile distance requirement for mountainous terrain or secondary roads beginning January 1, 2026, despite a new hospital or facility opening 10 to 15 miles away after enactment. A qualifying CAH must (1) be designated as such as of enactment, (2) demonstrate it met the 15-mile requirement at its last certification, and (3) have the new facility meet the 10-to-15-mile distance. This section directs the Secretary to promulgate regulations to implement this provision within one year of enactment.