US SB502

Restores state authority to waive the 35-mile distance requirement for designating certain struggling rural hospitals as Critical Access Hospitals (CAHs) under Medicare, allowing them to receive cost-based reimbursement

Limits new CAH designations under this provision to 120 facilities nationwide and no more than 5 per state, with eligibility restricted to hospitals in rural or high-poverty areas that have experienced 2 consecutive years of negative operating margins

Requires eligible hospitals to attest to good governance, multi-year financial solvency plans, and commitment to open or expand high-demand services such as obstetrics or behavioral health care

Includes a 9-year sunset provision requiring facilities designated under this act to transition to alternative payment models, including MedPAC-recommended models, previous prospective payment, or rural emergency hospital status

Mandates GAO study within 6 years on implementation impacts and MedPAC study within 8 years on rural hospital payment systems, including value-based payment options