§2.Medicare rural hospital flexibility program grants
This section revises the Medicare Rural Hospital Flexibility Program (42 U.S.C. 1395i-4(g)), which provides grants to states to designate and support critical access hospitals (CAHs)—rural facilities offering emergency, inpatient, and outpatient services—and related rural health networks and quality improvement activities. Specifically, it (1) expands authorized grant purposes under paragraph (1)(D) to include support for CAHs, certified rural health clinics, and rural emergency hospitals for quality improvement, performance benchmarking, population health, service transformation, behavioral health linkages, and substance use disorder services responding to public health emergencies; (2) redesignates paragraphs (3) through (7) as paragraphs (4) through (8) and inserts new paragraph (3) authorizing the Secretary to award grants or cooperative agreements to existing grantees for technical assistance, data analysis, and evaluation to support other program activities; (3) revises redesignated paragraph (4) to shift small rural hospital grants from direct awards to hospitals to awards to State Offices of Rural Health, expand "eligible small rural hospital" to include rural emergency hospitals, require State Office applications, allocate funds proportionally based on each state's share of eligible small rural hospitals nationwide, authorize uses for software/hardware purchases, staff training in billing/quality/value-based efforts, and other delivery reforms approved by the Secretary, and update reporting requirements; (4) updates redesignated paragraph (5) to include grants under new paragraph (4) in funding priorities; and (5) adds paragraphs (9) and (10) to authorize (9) 5-year Rural Health Transformation Grants to State Offices of Rural Health and eligible rural providers (e.g., CAHs, rural health clinics, rural nursing homes, emergency providers) for transitions to new models such as rural emergency hospitals, extended stay clinics, freestanding emergency departments, behavioral/oral health integration, and telehealth, requiring local/State support, payer letters, and sustainability plans; and (10) grants or cooperative agreements for technical assistance, data analysis, and support to hospitals seeking or holding rural emergency hospital designation.