Rural Community Hospital Demonstration provides lifeline to rural communities
Washington, D.C. — Colorado U.S. Senator Michael Bennet, co-chair of the Senate Rural Health Caucus, and Senator Chuck Grassley (R-Iowa) introduced the Rural Community Hospital Demonstration Reauthorization Act to extend the Rural Community Hospital Demonstration (RCHD) program for another five years. RCHD provides a lifeline to rural hospitals by allowing them to test innovative hospital payment models under Medicare that boost financial sustainability to maintain and improve health care access in rural communities.
Currently, there are four Colorado hospitals participating in RCHD: Delta Health, Valley View Medical Center, Montrose Regional Health, and San Luis Valley Health.
“Rural hospitals are the lifeline of rural communities. They keep families healthy, support local economies, and make it possible for people to live and work in rural Colorado,” said Bennet. “At a time when many rural hospitals are already under significant financial strain, extending the Rural Community Hospital Demonstration program is critical to maintaining access to care. If Congress fails to extend this program, hospitals not only lose a vital source of funding, but rural Coloradans could face longer drives, delayed care, and fewer options close to home. I’ve heard directly from rural hospitals across Colorado about what’s at stake, and I’ll keep fighting to protect health care access for every Coloradan.”
“The Rural Community Hospital Demonstration program gives rural hospitals a better shot at keeping their doors open to provide care for the community. With a proven track record of more than two decades, this program gives eligible hospitals financial stability to keep healthcare close to home for Iowans. While there’s more to be done, our Rural Community Hospital Demonstration Reauthorization Act is a key step to provide continued support for rural health care in America,” Grassley said.
The RCHD is specifically designed to boost the viability of rural hospitals. RCHD has helped more than 50 rural hospitals keep their doors open for acute inpatient care close to home.
The most recent performance data found that new RCHD hospitals significantly improved their Medicare margins and had higher capital investments, resulting in stronger financial conditions and helping with staff retention. Participating hospitals are mostly paid using a reasonable cost-based methodology instead of the inpatient prospective payment system. Today, all 30 spots are being used by the Centers for Medicare & Medicaid Services (CMS).
“We appreciate Senator Bennet’s leadership in supporting policies that recognize the challenges facing rural hospitals. The Rural Community Hospital Demonstration program provides a practical, proven approach to sustaining access to care by aligning Medicare payment with the real costs of providing services in rural communities. This program is about keeping care local, to ensure Colorado residents can receive timely, high-quality care, close to home,” said Jeff Tieman, Colorado Hospital Association’s President and Chief Executive Officer.
“Montrose Regional Health is proud to support Senator Bennet’s leadership in advancing a five-year extension of the Rural Community Hospital Demonstration program. This program is critical to sustaining access to high-quality care in rural communities like ours. It provides the stability and flexibility needed to navigate the unique financial and operational challenges we face, while continuing to invest in services that keep care close to home. We appreciate Senator Bennet’s ongoing commitment to strengthening rural healthcare across Colorado,” said Jeff Mengenhausen, Montrose Regional Health’s Chief Executive Officer
“As a rural health system serving the San Luis Valley, we are already seeing the benefits of participating in the Rural Community Hospital Demonstration Program,” said Konnie Martin, San Luis Valley Health’s Chief Executive Officer. “This program is helping us strengthen our financial footing and bring in the resources we need to preserve critical services for our community. As the only provider of Level III trauma and obstetric care within a 120-mile radius, our ability to remain open and fully operational is essential. The care we provide is not only vital to the health of our region, but also to its economic stability as the largest employer in the San Luis Valley. Senator Bennet’s legislation to extend this program will help ensure rural hospitals like ours can continue to serve our communities for years to come.”
“Rural hospitals like Delta Health operate on incredibly thin margins while serving vulnerable patient populations across Delta County,” said Nick Colleran, Delta Health’s Interim Chief Executive Officer and Chief Operating Officer. “The Rural Community Hospital Demonstration Program has been a lifeline for our rural hospital, providing the stable, predictable reimbursement we need to keep our doors open and continue delivering essential services, such as oncology care, to our community. At a time when we are facing mounting financial challenges such as our 2025 Medicare loss on charges of $45,161,765.00, as well the loss of critical resources and increasing administrative burdens, this program offers real, immediate support – not theoretical funding. Senator Bennet’s legislation to extend the Rural Community Hospital Demonstration Program is exactly the kind of commonsense solution rural providers need. It will help ensure that hospitals like Delta Health can continue to care for patients in the Western Slope for the next 100 years.”
“Valley View has participated in the Rural Community Hospital Demonstration Program since 2017. The program has provided crucial support that allows Medicare patients to receive high quality care close to home. Continued participation in the program is essential to preserving critical services, maintaining staffing stability, and ensuring that rural Medicare beneficiaries can continue to receive high quality care in their own communities. Without this support, access to vital inpatient, specialty, and outreach services would be at risk for the residents who rely on us most,” said Brian Murphy, Valley View Hospital’s Chief Executive Officer.
“Many rural hospitals face financial uncertainty from low patient volumes, sicker patient populations, a challenging payer mix, geographic isolation, and shifts in care delivery. The Rural Community Hospital (RCH) Demonstration Extension Act allows hospitals to continue providing essential care in their communities by supporting the financial stability of participating rural hospitals. Hospitals with 50 beds or less are some of the most vulnerable to closure and the RCH demo offers an important model to maintain access in rural communities around the country. The AHA thanks Senator Grassley and Senator Bennet for their strong leadership to support America’s rural hospitals,” said Lisa Kidder Hrobsky, American Hospital Association’s Senior Vice President for Advocacy and Political Affairs.
“The National Rural Health Association (NRHA) is grateful to see the introduction of the Rural Community Hospital Demonstration (RCHD) Reauthorization Act, led by Senator Grassley and Senator Bennet. This bill would provide a 5-year extension of the RCHD Program, which offers much-needed support for small rural hospitals through enhanced Medicare reimbursement. The RCHD Program has demonstrated improvement in Medicare inpatient margins for participating rural hospitals and has been crucial in helping rural hospital leaders maintain rural hospital viability,” said Alan Morgan, CEO, National Rural Health Association.
Bennet remains committed to ensuring that Coloradans in rural areas have access to the best health care available. In March, Bennet joined U.S. Senator Jerry Moran (R-Kan.) to introduce the Rural Hospital Revitalization Act, which would provide zero-interest loans through the U.S. Department of Agriculture (USDA)’s Community Facilities Program to qualifying hospitals for new construction or renovation of existing hospital facilities. In February, Bennet celebrated the passage of six of his health care bills: the Accelerating Kids Access to Care Act, REAL Health Providers Act, Medicare Multi-Cancer Early Detection Screening Coverage Act, Give Kids a Chance Act, PREEMIE Act Reauthorization, and Prescription Drug Supply Chain Pricing Transparency Act.
In November 2025, Bennet joined Senators John Barrasso (R-Wyo.), Tina Smith (D-Minn.), and Marsha Blackburn (R-Tenn.) in designating November 20, 2025, as National Rural Health Day. In July 2025, Bennet and Barrasso introduced the Accelerating the Development of Advanced Psychology Trainees Act, bipartisan legislation to increase access and coverage to behavioral, psychological, and mental health services in rural areas. In April 2025, Bennet and Representative Jeff Hurd (R-Colo.) held a roundtable discussion with rural health providers on the Western Slope to discuss challenges to providing high-quality care in Colorado’s rural communities.
Bennet has also been a longtime champion for the RCHD program, having led the most recent reauthorization. In May 2020, Bennet joined U.S. Senators Lisa Murkowski (R-Alaska) and Dan Sullivan (R-Alaska) to introduce legislation to extend the RCHD Program for an additional five years, ensuring these essential hospitals do not face further budget instability during such challenging times.
In addition to Grassley and Bennet, Senate Finance Committee Chairman Mike Crapo (R-Idaho) and Ranking Member Ron Wyden (D-Ore.), as well as Sens. Dan Sullivan (R-Alaska), Ben Ray Luján (D-N.M.), Cindy Hyde-Smith (R-Miss.), Peter Welch (D-Vt.), Jerry Moran (R-Kan.), Angus King (I-Maine), Lisa Murkowski (R-Alaska), Jeff Merkley (D-Ore.), Pete Ricketts (R-Neb.), Martin Heinrich (D-N.M.), James Lankford (R-Okla.) and John Hickenlooper (D-Colo.) cosponsored this legislation.
The text of the bill is available HERE.
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