The Medicare patch keeping 170 rural hospitals open expires again on December 31

Two Medicare payment programs keep small rural hospitals paid above the standard federal rate: the Medicare-Dependent Hospital (MDH) designation, for hospitals with 100 or fewer beds where at least 60% of patients are on Medicare, and the low-volume adjustment, a sliding-scale bonus of up to 25% for hospitals with under 3,800 discharges a year that sit more than 15 road miles from the next hospital.▸ Neither is permanent law. Both have to be renewed by Congress on a deadline, and in the fourteen months before this one, Congress let them lapse and revived them four separate times: the American Relief Act, 2025 (Pub. L. 118-158), signed December 21, 2024, carried them to March 31, 2025; Public Law 119-4, signed March 15, 2025, carried them to September 30, 2025; the continuing resolution that ended the 43-day shutdown (H.R. 5371, Pub. L. 119-37), signed November 12, 2025, carried them to January 30, 2026; and the Consolidated Appropriations Act, 2026 (H.R. 7148), signed February 3, 2026, carries them to December 31, 2026 — a deadline that now falls three months before the fiscal year it funds even ends. CMS's own fiscal note on the FY 2026 hospital payment rule put a number on what's riding on the next renewal: roughly $0.5 billion in payments to these hospitals for the fiscal year, contingent on Congress acting again.

MDH and low-volume payments are the smallest pieces of a larger set of Medicare programs built to keep rural hospitals open.▸ MedPAC's June 2025 Report to Congress tallies the annual value of each: Critical Access Hospitals, paid roughly their own costs rather than a standard rate, draw about $5.0 billion a year; Sole Community Hospitals, paid the higher of the standard rate or their historical costs, draw about $1.5 billion. Medicare-Dependent Hospitals draw about $0.2 billion, and hospitals with low-volume status alone — no SCH or MDH designation — draw about $0.1 billion. The first two categories are permanent features of Medicare law. The last two are not, which is why they are the ones that keep coming back to Congress on a clock.

The dollars are small next to the hospital count.▸ MedPAC counts about 170 hospitals nationally holding MDH status and about 230 more with low-volume status alone — smaller, cheaper categories than Critical Access (about 1,370 hospitals) or Sole Community (about 450), but not marginal to the hospitals that hold them. Six in ten Sole Community Hospitals, and nearly six in ten MDHs, also draw the low-volume add-on on top of their base designation — meaning a lapse in the low-volume policy alone would touch hospitals well beyond the roughly 230 with no other special status.

The renewal cycle isn't happening in isolation.▸ Chartis's 2026 Rural Health State of the State, published February 10, 2026 using its Rural Hospital Vulnerability index, counts 417 rural hospitals nationwide as vulnerable to closure — a minority of them MDH or low-volume hospitals specifically, since vulnerability is driven by margins, payer mix, and service lines rather than payment category alone, but the two lists overlap: MDHs exist precisely because a hospital is small, rural, and Medicare-heavy, the same profile that shows up disproportionately in Chartis's vulnerability model. Separately, UNC's Sheps Center has tracked 197 rural hospital closures or conversions since January 2005, 109 of them full closures, with 154 of the 197 — including 86 full closures — occurring since 2010 alone, as the pace has accelerated. MDH and low-volume status don't prevent closure by themselves; they are one of the levers that determines whether a marginal hospital's books close in the black or the red in a given year.

Dollar and hospital-count figures for MDH, low-volume, Sole Community, and Critical Access programs are MedPAC's 2022 estimates, the most recent year in its June 2025 report; the $0.5 billion FY2026 figure is CMS's own separate estimate from the FY2026 IPPS final rule fact sheet and is not additive with the MedPAC table. The Chartis vulnerability count and the Sheps Center closure count are independent trackers using their own methodologies, not a subset of MDH/low-volume hospitals specifically.