S. 607 would extend the Rural Community Hospital (RCH) demonstration program for an additional five years, through the end of calendar year 2021. Under the demonstration program, Medicare pays certain hospitals in rural areas on the basis of the reasonable costs they incur instead of using the payment rates determined by Medicare’s Acute Inpatient Prospective Payment System (IPPS). CBO estimates that enacting S. 607 would increase direct spending by $27 million in fiscal year 2016 but that this additional spending would be offset in future years. Therefore, the bill, on net, would have no significant effect on direct spending over the 2016-2025 period. Pay-as-you-go procedures apply because enacting the legislation would affect direct spending. Enacting the legislation would not affect revenues.
S. 607 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.