(Aug. 5, 2026) - As Congress’ session draws to a close, we are reporting on some recent positive developments related to long-standing Kansas Hospital Association priorities. On July 29, Senator Jerry Moran (R-KS) joined his colleague, Senator Tina Smith (D-MN), to introduce S.5164, the Rural Emergency Hospital Designation Improvement Act of 2026. This important bipartisan bill aims to address problems currently keeping Critical Access and Prospective Payment System Hospitals from fully committing to transition to the REH model, and to open the door for recently closed rural hospitals to reopen as REHs. We especially thank Senator Moran for his tireless support to see Kansas’ rural hospitals have access to this possibly facility-saving program.
According to Senators Moran and Smith’s bill explainer, S.5164, also known as REH 2.0 by rural health advocates, would:
- Allow previously closed rural hospitals to re-open and apply for the Rural Emergency Hospital designation if they can demonstrate they met all eligibility requirements between Jan. 1, 2015, and Dec. 27, 2020.
- Direct the Secretary of the U.S. Department of Health and Human Services to create a waiver program for facilities operating similarly to an REH to convert to an REH.
- Allow REH facilities to maintain or create a unit for inpatient psychiatric care and obstetric care, and allow for limited inpatient rehabilitation services.
- Require the Centers for Medicare & Medicaid Services to provide additional funding for laboratory services.
- Clarify REH facilities are eligible for Small Rural Hospital Improvement grants.
- Direct the Secretary of HHS to allow an REH to be eligible as a National Health Service Corps site.
- Authorize REH facilities to transfer patients from acute care to a Skilled Nursing Facility without leaving the hospital, in accordance with the Social Security Act.
- Allow an REH facility to revert back to a Critical Access Hospital to regain necessary provider status only if the facility was designated a necessary provider before converting to REH.
- Clarify state Medicaid agencies can pay REH facilities as hospitals.
This bill is a more comprehensive fix than other bills related to REH designation overhauls, such as H.R. 1775, the Second Chances for Rural Hospitals Act. We hope the discussion on the future of the REH designation includes all changes in the Senate’s REH 2.0 bill. We applaud Senator Roger Marshall (R-KS) for his co-sponsorship of this important bill as well as Congressman Ron Estes (R-KS) for his co-sponsorship of H.R.1775.
The House of Representatives is already on its August break, and the Senate will follow in the next 48 to 72 hours. However, before they leave town, the Senate is looking to pass a continuing resolution funding the federal government past the expiration of Fiscal Year 2026 on Sept. 30 to Dec.11. Importantly, passage of this Senate CR would clear a major hurdle, the 60-vote threshold in the 100-seat Senate, to ensure there is no government shutdown before the Nov. 3 midterm general election.
In practical terms, it would set the table for the House to take up the Senate-passed CR and forward it to President Donald Trump for his signature when the House returns to session in September. This bill will contain very few anomalies, or changes to funding levels already in place for the current FY. Congress would have strong motivation to pass individual appropriations bills, such as the one funding the Departments of Labor, Health and Human Services and Education, so necessary changes could be enacted as soon as possible.