A BILL FOR AN ACT

Relating to access to rural hospital and related clinical services.

Be It Enacted by the People of the State of Oregon:

SECTION 1. As used in sections 1 to 4 of this 2027 Act:

(1) “Authority” means the Oregon Health Authority.

(2)(a) “Hospital” means a facility in this state that is licensed by the authority under ORS 441.025 to provide general hospital services, provides acute inpatient care and operates an emergency department that accepts patients 24 hours each day. For purposes of the systemically important rural hospital designation under section 2 of this 2027 Act, “hospital” includes a facility licensed as a low occupancy acute care hospital if the facility provides those services.

(b) The unit of designation is the licensed hospital at its principal inpatient campus. “Principal inpatient campus” means the site identified as the hospital's main inpatient site on the license or, if the license does not identify the site, the licensed site with the greatest number of beds of the types described in subsection (3)(a) of this section. The authority shall resolve a tie by using the site with the greatest number of acute inpatient discharges in the most recent 12 completed calendar months for which complete data are available. If a tie remains, the authority shall use the main inpatient practice location in the hospital's current Medicare provider agreement if that location is one of the tied sites. If the preceding tests do not identify a site, the authority shall identify which tied site principally provides emergency stabilization and receives inpatient transfers based on documented service volumes or, if comparable volumes are unavailable or equal, the hospital's emergency and referral service plans. The authority shall state its reasons in the order under section 3 of this 2027 Act. A hospital may receive only one designation as a systemically important rural hospital for the same principal inpatient campus.

(c) A hospital may not combine the beds, licensure, admissions, Medicare classifications or service capabilities of a separately licensed facility to meet a criterion in section 2 of this 2027 Act. A parent organization, health system, outpatient site or satellite without a separately licensed acute inpatient hospital is ineligible to hold a separate designation.

(3)(a) “Licensed acute inpatient beds” means the maximum number of beds that the authority authorizes in writing under the hospital's license for general acute inpatient care at the principal inpatient campus on the applicable measurement date. Count a bed used for swing-bed services once if it is also licensed for general acute inpatient care. Exclude beds licensed solely for psychiatric, rehabilitation, long term care or other special inpatient services, observation stations that are not licensed for inpatient care and beds authorized only during a declared emergency. Include beds licensed for general acute inpatient care even if they are temporarily unstaffed or unoccupied.

(b) The authority shall use the license and its approved schedules or a written determination by the authority's licensing program based on those records. A count of staffed, occupied or federally reported beds does not establish licensed capacity under this subsection.

(4) “Nonmetropolitan location” means a principal inpatient campus physically located in an Oregon county that is outside a metropolitan statistical area identified in Office of Management and Budget Bulletin No. 23-01, issued July 21, 2023. A county's inclusion in a micropolitan statistical area or combined statistical area does not establish its inclusion in a metropolitan statistical area. A Medicare geographic adjustment, wage-index reclassification or treatment as rural for payment purposes does not change the hospital's physical location under this subsection.

(5) “Dual federal classification” means that the Centers for Medicare and Medicaid Services or its authorized contractor classifies the same hospital, in relation to the same principal inpatient campus and under the hospital's active inpatient prospective payment system provider agreement, as both a sole community hospital under 42 C.F.R. 412.92 and a rural referral center under 42 C.F.R. 412.96. The classifications must be simultaneously in effect on the measurement date. The authority shall establish the effective dates and the facility to which the federal determinations apply. An administrative payment file is evidence of status and must be reconciled with a later, conflicting or superseding determination, including a conversion to a critical access hospital.

(6) “Functional criteria” means that the hospital:

(a) Has a nonmetropolitan location and provides general acute inpatient medical and surgical care, emergency stabilization and the ability to receive and care for patients transferred from another facility when medically appropriate. The hospital must maintain operative transfer arrangements for patients who require services that the hospital does not provide;

(b) Routinely provides at least one specified hospital service described in subsection (7) of this section at the hospital's principal inpatient campus and, for at least one such service, satisfies the 45-minute ordinary motor vehicle travel requirement in subsection (9) of this section; and

(c) In each of the two most recent completed calendar years, had a share of acute inpatient discharges of at least 20 percent as calculated under paragraph (d) of this subsection and admitted at least 50 acute inpatients by documented direct transfer from at least two other separately licensed health care facilities. Do not count movement between campuses of the same hospital as a qualifying direct transfer. The authority may accept auditable hospital records where other data are incomplete. The authority may not waive either threshold or substitute an earlier calendar year.

(d) For the 20 percent test in paragraph (c) of this subsection, the denominator is all acute inpatient discharges of Oregon residents at the principal inpatient campus during the calendar year and the numerator is the subset whose residence at admission was in a nonmetropolitan Oregon county other than the hospital's county. Count a discharge once. Use the geography in subsection (4) of this section. The hospital does not meet the test if the denominator is zero or the required data are unavailable.

(7) As used in subsection (6)(b) of this section, “specified hospital service” means one of the following services provided in person at the principal inpatient campus of the applicant:

(a) Emergency primary percutaneous coronary intervention for an adult with ST-elevation myocardial infarction, including the intervention and monitored inpatient care after the intervention.

(b) Hospital labor and delivery for a patient at or beyond 37 completed weeks of pregnancy who does not require subspecialty maternal or neonatal care at presentation, including emergency cesarean delivery when indicated and immediate maternal and newborn stabilization.

(c) Acute inpatient psychiatric treatment of an adult requiring admission for an acute psychiatric condition after medical stabilization, including overnight care in a licensed hospital or hospital unit authorized to provide the treatment.

(d) Emergency general surgery for adults who require inpatient hospital care for either uncomplicated acute appendicitis or uncomplicated acute cholecystitis. The operating program must be able to treat both conditions and must include the indicated operations, anesthesia and inpatient recovery.

(e) Adult intensive care for an acutely ill adult who requires both invasive mechanical ventilation and continuously infused vasoactive medication, including initiation or continuation of both forms of support and ongoing inpatient critical care. The reference patient does not require a tertiary specialty intervention.

(8)(a) The authority shall determine capability for a specified hospital service using the same clinical presentation, level of acuity and legally required admission authority, if applicable, for the applicant and for each potential receiving site. The authority may adopt uniform clinical and evidentiary specifications within the service categories in subsection (7) of this section. The authority may not add or remove a service category, require a particular proprietary technology or accept an applicant-specific patient description. A higher level of care counts if the potential receiving site can receive and provide the service for the same reference patient.

(b) A comparable receiving site is a lawfully operating hospital inpatient campus in Oregon or an adjoining state, other than the applicant's principal inpatient campus, that is authorized, staffed and equipped to receive and treat the applicable reference patient under a standing operating and acceptance schedule. The site must operate an emergency department that accepts patients 24 hours each day, except that a separately licensed inpatient psychiatric hospital or a hospital inpatient campus may qualify for the service in subsection (7)(c) of this section if it has an identified receiving entrance and is lawfully authorized and ordinarily staffed to receive appropriate direct transfers for that service. Evidence of outpatient care, stabilization for onward transfer, or diagnosis without definitive treatment does not establish comparable receiving capability. A site that operates under the same hospital license or shares the same owner or an affiliate may qualify if the site independently meets the requirements of this paragraph. Counting a site as a comparable receiving site does not authorize a separate designation for the site or allow the applicant to use another site's capabilities to meet its own service requirement.

(c) The authority shall review lawfully available and auditable evidence of service authority, standing coverage, staffing and actual operations. The authority shall apply the same evidentiary standards to the applicant and potential receiving sites and shall consider documented regional referral and emergency medical services practices. The lack of an answer or record from a plausible receiving site does not by itself establish that the site does not provide the service.

(9)(a) For each otherwise qualifying comparable receiving site, the authority shall measure ordinary motor vehicle travel time over the shortest normally available public-road route from the applicant’s emergency department entrance to the receiving site’s emergency department entrance or, for an inpatient psychiatric site described in subsection (8)(b) of this section, to the receiving entrance ordinarily used for the service. The authority shall account for routine seasonal road closures and disregard temporary closures from isolated events. The nearest comparable receiving site is the site with the least ordinary travel time determined under this paragraph.

(b) The applicant satisfies a requirement of at least 45 minutes of ordinary motor vehicle travel to a comparable receiving site if the authority finds that every comparable receiving site is at least 45 minutes away under paragraph (a) of this subsection or affirmatively verifies that there is no comparable receiving site in Oregon or an adjoining state. An absence finding must be supported by a search of relevant facility and service records and documented review of each plausible site that could affect the finding.

(10) The authority shall publish the method, applicable reference patients and evidence periods used to apply subsection (6)(b) of this section. An order under section 3 of this 2027 Act shall identify each service relied on, material comparable sites considered, applicable times and any evidence limits. The authority shall publish a summary of those findings, subject to applicable disclosure restrictions. The authority shall assess standing service operations for certification, annual review and review of a material change under section 3 of this 2027 Act. An isolated staffing gap, individual transfer denial or isolated disruption in travel does not by itself establish a material change in eligibility. A material change may include a verified enduring change in service scope or hours at the applicant or a comparable receiving site. This subsection does not extend a provisional continuation period under section 3 of this 2027 Act.

SECTION 2. (1) A hospital is designated a systemically important rural hospital if the hospital:

(a) Has a nonmetropolitan location and dual federal classification; or

(b) Meets the functional criteria in section 1 (6) of this 2027 Act.

(2) The authority shall specify in its order the paragraph of subsection (1) of this section under which the hospital qualifies. If a hospital qualifies under both paragraphs, the authority shall make both findings and issue a single certification. A hospital may request review under paragraph (b) if it does not meet, or ceases to meet, paragraph (a).

(3) The criteria in subsection (1) of this section are applied as of the date of application or initiation of a determination by the authority, whichever first applies, and on recertification or a determination arising from a material change under section 3 of this 2027 Act. The authority shall apply the data periods specified in section 1 (6) of this 2027 Act for the functional criteria. The authority may not designate a hospital on a general finding of similarity or hardship without findings on each applicable criterion.

SECTION 3. (1) The Oregon Health Authority shall establish a process to certify each hospital meeting the requirements of section 2 of this 2027 Act. The authority may initiate a determination using available records. A hospital may apply at any time and provide evidence for a determination, correction, recertification or reinstatement. The authority shall give the hospital a reasonable opportunity to supply relevant evidence and shall specify any unavailable record necessary for a determination.

(2) No later than 180 days after the effective date of this 2027 Act, the authority shall publish its first roster of hospitals certified under section 2 of this 2027 Act. The authority shall complete an application determination within 90 days after receipt of a complete application and shall review the roster at least annually. The authority shall promptly update the roster after a final order affecting a listing. The roster shall identify the hospital, principal inpatient campus, state license number, active Medicare certification number if any, class and qualification pathway, determination date, evidence measurement dates and any applicable provisional continuation period. The authority shall publish the rules and methods used in making determinations and an explanation of any limits in the evidence used for the roster. The authority shall disclose the roster and a summary of its findings consistent with state and federal laws governing disclosure of information. The public roster may not contain patient identifying information or other information whose disclosure is prohibited by law.

(3) The authority shall issue a written order certifying, recertifying, reinstating, changing or denying certification. Except as provided in subsection (7) of this section for a temporary interruption, the authority may certify a hospital only if it finds the hospital meets the applicable criteria on the effective date of certification. An applicant shall inform the authority of any material change during the pendency of an application. The order shall state the applicable criteria, findings for each criterion, the sources and measurement dates on which the findings depend and the effective date of the action. An incomplete or contradictory administrative record shall be identified in the findings. The absence of an entry in a public file may not be treated as conclusive evidence of ineligibility if reliable underlying records are available.

(4) Before denying an application or changing, suspending or terminating a certification adversely to a hospital, the authority shall give written notice of the proposed action, the basis and proposed effective date, and the opportunity to respond and request a contested case hearing within 30 days after service of the notice. A proceeding requested under this subsection is a contested case under ORS chapter 183. The authority shall state in the notice whether the hospital is eligible to apply under a different pathway. A final order is subject to judicial review under ORS 183.482. This subsection does not stay any licensure or safety action or authorize provision of services for which a license has ceased to be effective.

(5) A certified hospital shall notify the authority in writing of a material change that may affect a class criterion within 30 days after the hospital learns of the change. A material change includes a change to the operator, license, principal inpatient campus, active Medicare provider agreement or classification, inpatient bed schedule where a bed criterion applies, or the availability of services required for qualification. The authority shall review the certification after notice or on receipt of reliable evidence of a material change. A change in name or ownership does not itself disqualify a hospital. The authority shall reassess the eligible unit and criteria when a license, active federal provider agreement or location changes. The authority shall determine the effect of a consolidation or replacement campus under section 2 of this 2027 Act using the new operating and certification records. Certification may not be transferred by sale, assignment or use of a former Medicare certification number.

(6) A certified hospital that ceases all general acute inpatient operations on a permanent basis, or lacks an effective Oregon license authorizing the operations required for qualification, ceases to hold the designation when the operations permanently cease or the license ceases to be effective. The authority shall issue notice and afford review under subsection (4) of this section and correct the roster if the underlying fact or effective date was incorrect.

(7)(a) If a certified hospital continues lawful operation of its general acute inpatient and emergency services and there is a temporary interruption of a criterion other than nonmetropolitan location, the authority may enter a written order continuing the state designation for no more than 12 months after the effective date of the interruption, unless section 2 of this 2027 Act provides otherwise. A continuation order requires findings that the same principal inpatient campus continues to serve the access and referral function for which it qualified and that the hospital has supplied a documented plan and a reasonable schedule to restore the criterion or establish eligibility under another pathway. The authority may continue designation during a temporary interruption of inpatient or emergency services caused by a declared emergency if the license remains effective and the hospital has an approved reopening plan. The total continuation period for the same interruption may not exceed 12 months.

(b) A temporary interruption may include a correctable federal administrative lapse, a temporary reduction in licensed capacity where the bed count is a class criterion, or an interruption of a qualifying service. An intentional permanent service discontinuance, permanent conversion to a different Medicare payment system, or relocation that fails the applicable geography or campus criterion does not qualify for continuation. The authority shall record the basis and expiration date of the continuation and require reasonable periodic evidence of progress. The hospital may apply for reinstatement upon supplying evidence that it meets all criteria for the relevant pathway. A determination may correct the effective date if contemporaneous records establish that the condition did not lapse.

(c) An order under this subsection continues only the state designation. Payment eligibility, continued payment, settlement, reconciliation and recovery depend on the separate law and approvals governing each benefit. Designation may be reinstated prospectively on a new determination. A correction of the historical eligibility record does not independently authorize retroactive payments.

(8) If a federal rule is amended, replaced or repealed, the authority shall apply the facility's federal determinations and any applicable transition under this section. If the change removes a classification used by section 1 of this 2027 Act, substitutes a classification with materially different criteria or materially changes the Oregon class, the authority shall notify the interim committees of the Legislative Assembly related to health care and reimbursement in the manner provided by ORS 192.245 within 90 days after the authority identifies the change. The authority may not substitute a different eligibility criterion by rule. The authority shall recommend any statutory change necessary to continue the public purpose of the designation.

SECTION 4. (1) The systemically important rural hospital designation recognizes hospitals providing access to hospital care for their communities and receiving referrals from the region. For purposes of sections 1 to 4 of this 2027 Act, a decision on designation is based on the eligible hospital and the statutory criteria. A hospital's public, nonprofit or proprietary ownership, system affiliation, decision to contribute funds, or financial condition does not determine its eligibility. A hospital's trauma level does not determine eligibility except to the extent section 2 of this 2027 Act expressly provides otherwise. The authority may consider trauma designation as evidence of actual service capability where a functional criterion applies.

(2) The designation does not change a hospital's state license, federal Medicare classification or any Type A, Type B, Type C or rural critical access hospital classification. Sections 1 to 4 of this 2027 Act do not change payment or access protections under existing law, impose a hospital assessment or contribution, authorize a transfer of public funds, appropriate money or entitle a hospital to payment. This subsection does not preclude the application of a separate provision of law expressly authorizing a benefit, reimbursement or obligation for a certified hospital. Qualification for a benefit and treatment of payments for the same service shall be determined under the law and required approvals governing the benefit.

(3) The authority may adopt rules to administer sections 1 to 4 of this 2027 Act. Rules may specify documentation, application forms, evidence verification, review periods, address reconciliation, computation and reporting. Rules may not expand or narrow an eligibility criterion or waive a geographic, service, federal-classification or numeric requirement established by law. The authority shall use existing reports when sufficient and require only evidence reasonably necessary to make and review the determination. Disclosure, retention and use of submitted information remain subject to applicable state and federal law.

SECTION 5. Sections 1 to 4 of this 2027 Act are added to and made a part of ORS chapter 442.

SECTION 6. This 2027 Act takes effect on the 91st day after the date on which the 2027 regular session of the Legislative Assembly adjourns sine die.

SECTION 7. (1) The Oregon Health Authority may enter into rural clinician and specialty access agreements with hospitals certified as systemically important rural hospitals under section 3 of this 2027 Act. A hospital may apply with an accredited training program, federally qualified health center, public or tribal entity or other licensed care or workforce partner. The certified hospital is accountable to the authority for the agreement and shall document the scope, price and responsibilities of each partner.

(2) To qualify for an agreement, the applicant must demonstrate a measurable shortage in a rural Oregon community served by the hospital, using documented wait times, provider availability, travel, referral patterns or difficulty maintaining a clinically necessary service. The proposal must identify the patients or trainees served, the existing service or training baseline and a measurable increment in access or training above the baseline. The proposal must also show that the increment is feasible under the applicable staffing, supervision, credentialing, accreditation and licensing requirements.

(3) The authority may approve reasonable net incremental costs to provide:

(a) Additional patient-facing clinical rotations, preceptor time or clinical backfill under an accredited professional training program. The applicant shall state the incremental training positions, rotations or supervised hours, any necessary accreditation approval and the underserved sites where trainees will receive clinical experience.

(b) An increase in availability of a priority specialty, including by a regularly scheduled visiting specialist, teleconsultation with an appropriate local clinical team, or additional hours of consultation and procedures. The agreement must specify the additional appointments, procedure or consultation sessions, coverage periods and applicable access requirements. The applicant shall show who can obtain those services and when.

(c) Recruitment or retention of a licensed clinician under a written rural service commitment that identifies the practice sites, patients eligible to receive services, minimum service period and repayment terms for uncompleted service. The authority may approve temporary transition or relocation costs integral to completing the documented commitment. An award under this paragraph may not pay a general housing development cost or create an incentive duplicating a separately financed service obligation.

(d) A minor facility adaptation or necessary equipment directly attributable to an activity under paragraph (a), (b) or (c) of this subsection if the cost is separately priced and the authority finds the adaptation or equipment is necessary and proportionate. A proposed expansion of general campus capacity is ineligible.

(4) The applicant shall submit an operational and financial baseline for the most recent 12 completed months for which complete information is available, the expected additional personnel and service volume and the net new cost after grants, training support, charges, payer reimbursement and other amounts attributable to the same costs. The applicant shall disclose pending applications and awards for overlapping activities, including Medicare or other graduate medical education support, Oregon workforce programs and rural transformation grants. The authority shall reconcile subsequent receipts under section 8 of this 2027 Act. The authority may approve a shorter baseline for a recently opened activity if it explains how it has controlled for incomplete periods and established a reliable comparison.

(5) For the activities funded, the agreement must include a plan for serving Oregon Health Plan enrollees and other underserved patients on substantially the same clinical access terms as other eligible patients. The authority shall evaluate aggregate completed rotations and preceptor hours, actual new specialist access and completed rural service commitments, as applicable. Measures must permit review of patient access and delivery of the purchased increment. The authority may consider continued local practice after completion of a service commitment as an evaluation measure.

SECTION 8. (1) The Oregon Health Authority shall publish uniform application procedures and award criteria. The criteria shall consider severity of documented access barriers, expected benefit to underserved patients, additional service available, feasibility, reasonable net incremental cost, workforce effects and the availability of alternative funding. The authority shall publish a reasoned determination on each award, amount, recipient, defined activity, service period and aggregate performance, excluding information made confidential by law.

(2) Before executing an agreement, the authority shall require the applicant to document its consultation with affected community and workforce representatives, including the applicable hospital staffing committee and exclusive employee representative if any. The applicant shall address relevant workload, clinical coverage and continuity issues. The applicant shall certify that implementation complies with existing staffing, labor, licensing and patient safety requirements. Nothing in sections 7 to 9 of this 2027 Act alters those requirements or a collective bargaining agreement, or makes an award contingent on concessions by employees.

(3) A hospital or proposed partner shall disclose related ownership, governing roles and financial interests, and identify all affiliated-party amounts and duties. The authority shall obtain an independent price and need review for a proposed affiliated-party payment, including a payment involving a coordinated care organization in which the hospital or its owner has a financial interest. A person with a disclosed financial interest may supply relevant information and may not participate in the authority’s decision or independent review. The authority may approve a transaction only on documented terms comparable to an arm’s-length transaction for the same service and shall require separate accounting. Ownership or affiliation does not establish award eligibility, permit a distribution to an owner or satisfy a matching requirement.

(4) An agreement must specify the service term, covered incremental activities, maximum award, milestones, clinical and administrative responsibilities, schedules for disbursement and reconciliation, monitoring, early termination, and recovery terms. The authority shall disburse funds on documented progress or delivery. An advance for a necessary start-up cost requires a written finding and an enforceable repayment obligation. A recipient shall notify the authority within 30 days of a change in licensing, certification, service scope, partner availability, or another material condition. The authority shall suspend new obligations if certification or other essential authority ceases and may suspend or terminate payments for an undelivered increment. The authority may reimburse a lawful, verified increment delivered before the relevant change. Affected patients and trainees must have a reasonable transition plan consistent with applicable law.

(5) A recipient shall retain relevant records for six years after final reconciliation, allow the authority to audit the use of public funds, report performance and all funds attributable to covered costs, and return unspent, duplicate or unsupported payments. The authority shall recover amounts due and may offset them against later amounts under the agreement. An award may not fund general operating losses, repayment of preexisting debt, a distribution to an owner or a cost reimbursed from another source. The authority shall account separately for receipts, obligations and disbursements. The authority may make rules to implement sections 7 to 9 of this 2027 Act.

SECTION 9. (1) The Oregon Health Authority may make an agreement under section 7 of this 2027 Act only from state money expressly appropriated or otherwise lawfully available for that purpose. The authority may not obligate an amount exceeding money lawfully available to meet all obligations of the agreement. A payment under section 7 purchases the specific increment in the agreement. Sections 7 to 9 do not authorize an assessment or intergovernmental transfer, establish a Medicaid rate or directed payment, or authorize a federal matching claim. The authority may not seek federal reimbursement for the same cost under an award.

(2) The authority may enter into new agreements under section 7 during the biennium beginning July 1, 2027. No agreement may require performance after June 30, 2030. Expiration of the authority to make an agreement does not end reporting, auditing, reconciliation and repayment duties or affect hospital designation under sections 1 to 4 of this 2027 Act.