Representatives Carol Miller (R-WV) and Dave Taylor (R-OH) have introduced the Defend Rural Health Act, a bill aimed at ensuring that federal resources for rural hospitals are not diverted to large urban hospitals. The legislation addresses a loophole that has allowed some urban hospitals to claim both “urban” and “rural” status, giving them access to benefits meant specifically for rural health care providers.
Miller explained the importance of the bill by saying, “Living in West Virginia, I know that rural hospitals depend on strong federal support to serve their communities. Hundreds of thousands of Americans rely on these facilities for essential health care, yet urban hospitals have been exploiting a loophole to claim both urban and rural status, siphoning resources meant for rural providers. This bill protects rural hospitals by ending that practice and ensuring federal support stays where it is truly intended, serving rural communities.”
Taylor echoed this sentiment: “When it comes to health care, rural Ohioans need someone who will fight for them in Congress. And although there are federal benefits and programs that have been designed to uplift rural hospitals, urban hospitals in big cities like Manhattan, Boston, and San Francisco are taking advantage of a harmful loophole to siphon benefits intended for rural hospitals. I’m proud to right this wrong and protect the integrity of taxpayer dollars, rural hospitals, and rural America.”
Before 2016, the Centers for Medicare & Medicaid Services (CMS) typically prevented urban hospitals from receiving both urban and rural benefits after reclassifying as “rural.” However, two federal court decisions in 2016 permitted these dual classifications. As a result, urban hospitals could take advantage of higher Medicare wage indexes while also qualifying for additional programs reserved only for rural facilities. These include easier eligibility for the 340B Drug Pricing Program and increased funding options.
This dual classification has grown significantly—from just three cases in 2017 to over 425 by 2023—leading to concerns about limited resources being spread too thin among true rural providers who depend on them most.
The new bill proposes closing this loophole by setting stricter eligibility standards so only genuinely rural institutions can receive targeted federal support.
Carol Miller has served as U.S. Representative for West Virginia’s 1st District since 2019 after replacing Evan Jenkins. She previously held office in the West Virginia House of Delegates from 2006 through 2018 and was born in Columbus, Ohio in 1950 before moving to Huntington. Miller graduated from Columbia College in South Carolina with a Bachelor’s degree in 1972.
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