S 1390119th CongressIn Committee

Physician Led and Rural Access to Quality Care Act

Introduced: Apr 9, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

This bill, the Physician Led and Rural Access to Quality Care Act, amends the Stark self-referral rules (physician self-referral exemptions under title XVIII of the Social Security Act) as they relate to physician-owned hospitals. It creates a new category called “covered rural hospital,” defines what that means, and clarifies that the self-referral exemptions do not apply to these covered rural hospitals. At the same time, the bill removes a prohibition on expanding physician-owned hospitals, allowing expansion to proceed without a prior sunset limitation. In short, the measure aims to (a) tailor self-referral exemptions away from certain rural, physician-owned hospitals, and (b) remove barriers to expanding physician-owned hospitals, potentially including rural facilities, to improve access to care.

Key Points

1Creation of “Covered rural hospital.”
2- A new sub-definition added to the law for a hospital located in a rural area (per existing rural area criteria) and that enrolls under the Medicare title meeting certain criteria specified in 1820(c)(2)(B). A note clarifies that no additional criteria are required beyond those listed.
3Exemption treatment for covered rural hospitals.
4- In the Stark self-referral exemptions, the bill inserts language indicating an exception for “covered rural hospitals” (i.e., certain rural physician-owned hospitals). Practically, this means the existing self-referral exemptions do not apply to these covered rural hospitals, differentiating them from other hospitals.
5Expansion of physician-owned hospitals.
6- The prohibition on expanding physician-owned hospitals is removed. The bill adds a new paragraph (7) under the expansion-related provision, stating that the expansion prohibition does not apply starting on the enactment date.
7Textual changes to the self-referral provisions.
8- To implement the above, the bill adjusts references in subsection 1877(d) so that the references to the exemptions explicitly account for “covered rural hospitals,” treating non-covered-rural hospitals differently from covered rural hospitals.
9Purpose and scope.
10- The overall aim is to enable physician-owned hospitals to expand (including potentially in rural areas) while controlling or limiting self-referral exemptions for a subset of rural, physician-owned facilities.

Impact Areas

Primary affected groups/areas- Physicians who own or may own hospitals, including potential expansion projects.- Rural patients and rural healthcare access, particularly where physician-owned hospitals operate or may operate.- Medicare program administrators and compliance officers who oversee Stark Law exemptions and hospital referrals.Secondary affected groups/areas- Other hospitals and health systems that compete with physician-owned hospitals, particularly in rural markets.- Policy makers and oversight bodies concerned with Stark Law compliance, patient safeguards, and cost containment.Additional impacts- Potential changes in referral patterns and Medicare spending stemming from expanded ownership and altered exemptions.- Implications for patient choice, hospital ownership arrangements, and potential conflicts-of-interest oversight in rural settings.- Possible need for additional regulatory monitoring or guidance around enrollment criteria for covered rural hospitals.

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