Medicare proposes rule on how it measures distance for small rural hospitals

The federal agency that runs Medicare proposed Tuesday to write into its rules how it decides whether a small rural hospital is far enough from other hospitals to keep its special status. Alaska has 13 of those hospitals, from Utqiaġvik and Kotzebue to Dillingham, Sitka and Seward, according to federal health data.

To be a "critical access hospital," a facility generally has to be more than a 35-mile drive from the nearest hospital, or 15 miles over mountains or on secondary roads.

Under the proposal from the Centers for Medicare & Medicaid Services, only hospitals that admit patients for acute care would count as the nearest hospital. Psychiatric, long-term care and rehabilitation hospitals wouldn't, and neither would rural emergency hospitals. The agency says that's already its policy, laid out in 2016 guidance, and the rule would just make it official.

The proposal also carries out a new federal spending law that protects some hospitals that were told between December 2024 and January 2026 that they didn't meet the distance rule. Those that lost their status only over distance would get it back. CMS counts four such hospitals nationwide but didn't name them.

Separately, the proposal would drop staff training requirements for emergency readiness and obstetric care that CMS set for critical access hospitals in 2024. CMS projects the proposal's changes would save critical access hospitals $16.6 million a year nationwide.

Comments are due Jan. 11, 2027.