S. 335 — Rural Hospital Support Act

This section permits sole community hospitals to elect a rebased target amount—using the 12-month cost reporting period beginning during FY2016 as the base period—for Medicare inpatient hospital operating cost payments for cost reporting periods beginning on or after October 1, 2025, in lieu of the otherwise applicable amount under subsection (d)(5)(D)(i) if the rebased amount yields higher payment. (Sole community hospitals are rural facilities designated as a community's sole source of inpatient hospital services (i.e., no other hospitals within a specified distance) and receive special payment protections, including a target amount for costs updated by the hospital market basket index.) It makes conforming amendments to cross-references in subparagraphs (C) and (I)(i).

This section rebases the target amount calculation for Medicare-dependent, small rural hospitals (MDHs)—rural hospitals with no more than 100 beds for which Medicare patients represent at least 60% of total inpatient days or discharges—by substituting, for discharges occurring on or after October 1, 2025, the 12-month cost reporting period beginning during FY2016 for the base cost reporting period under subparagraph (D)(i), with references to the "first cost reporting period" deemed to mean the first such period beginning on or after that date. (Thus, the rebasing applies only if it increases the MDH target amount, which is used to determine additional payments equal to the difference between hospital-specific costs per discharge and prospective payment system rates.) The section also updates subparagraph (D) to reference both subparagraphs (K) and (N).

This section prohibits the Secretary, prior to October 1, 2015, from applying budget neutrality adjustments required under clause (iii) of 42 U.S.C. 1395ww(d)(4)(C)—for revisions to diagnosis-related group (DRG) classifications and weighting factors—to rebased target amounts described in subparagraphs (M) and (N) of subsection (b)(3) that are used to calculate Medicare inpatient prospective payment system (IPPS) payments for sole community hospitals (SCHs, i.e., the sole source of inpatient hospital services in their areas) and Medicare-dependent, small rural hospitals (MDHs, i.e., rural hospitals with at least 60% Medicare inpatient days). (Thus, SCHs and MDHs using those rebased target amounts are protected from payment reductions due to such adjustments until FY2016.)

This section permanently extends the Medicare-dependent hospital (MDH) program—which provides small rural hospitals (i.e., those with 100 or fewer beds and Medicare utilization of at least 60% in a baseline period) with blended Medicare inpatient payment rates blending national prospective rates and the hospitals' own historical costs—by removing scheduled expiration dates before April 1, 2025, from the payment methodology in SSA section 1886(d)(5)(G), target amount provisions in SSA section 1886(b)(3)(D), and hospital declination option under OBRA 1993 section 13501(e)(2) and instead applying them to subsequent fiscal years.

This section extends the Medicare low-volume hospital payment adjustment under the inpatient prospective payment system (IPPS)—which provides qualifying hospitals (generally those with fewer than 800 total annual discharges, including at least 5% Medicare discharges, often rural facilities) a supplemental percentage increase in base operating payments to help offset low volume—by (1) limiting the subparagraph (B) increase to fiscal years 2005 through 2010 (previously also applicable to discharges from April 1, 2025, through September 30, 2025, and fiscal year 2026 and subsequent fiscal years) via revised heading and struck text; (2) in subparagraph (C)(i), extending applicability preceding subclause (I) to fiscal year 2011 and subsequent fiscal years (from fiscal years 2011 through 2024 and the portion of fiscal year 2025 from October 1, 2024, through March 31, 2025), extending subclause (III) to fiscal year 2019 and subsequent fiscal years (from each of fiscal years 2019 through 2024 and the same portion of fiscal year 2025), replacing the semicolon with a period, and striking subclause (IV); and (3) in subparagraph (D), revising the heading to "Applicable percentage increase beginning with fiscal year 2011," extending applicability preceding clause (i) to fiscal year 2011 and subsequent fiscal years (from fiscal years 2011 through 2024 or the same portion of fiscal year 2025), and extending clause (ii) to fiscal year 2019 and subsequent fiscal years (from each of fiscal years 2019 through 2024 and the same portion of fiscal year 2025).