S1868

The Critical Access for Veterans Care Act (S1868) amends Title 38, U.S. Code, Section 1703, to include critical access hospitals and affiliated rural health clinics in the Veterans Community Care Program. This change allows veterans residing within 35 miles of such facilities to receive care without prior authorization or referral. This is a direct expansion of the addressable market for these facilities. The bill mandates that critical access hospitals be reimbursed at the Medicare critical access hospital rate, and affiliated rural health clinics at the rate specified under Section 1833 of the Social Security Act. This ensures a standardized and generally favorable reimbursement structure for services provided to veterans. The money trail flows directly from the Department of Veterans Affairs (VA) to critical access hospitals and rural health clinics. By mandating Medicare rates, the bill establishes a clear and predictable revenue stream for these facilities. This eliminates the uncertainty often associated with VA reimbursement rates, making it more attractive for private providers to participate. The expansion of the Veterans Community Care Program means a larger pool of patients for these facilities, translating to increased service utilization and revenue. The VA's budget for community care will directly fund these services, with payments flowing to the healthcare providers. Historically, expansions of government-funded healthcare programs have led to increased revenue for participating providers. For example, when the Affordable Care Act (ACA) expanded Medicaid in various states, hospitals in those states experienced a significant reduction in uncompensated care and an increase in revenue. While not directly comparable in scale, the mechanism of expanding access to a funded patient population is similar. The market reaction to such expansions typically sees a positive sentiment for healthcare providers, especially those with significant exposure to the newly covered population. For instance, when Medicare Advantage enrollment expanded, companies like UnitedHealth Group ($UNH) and Humana ($HUM) saw sustained growth in their Medicare segments. Specific winners from this legislation include large hospital operators with critical access hospitals or rural health clinics in their networks, such as HCA Healthcare ($HCA) and Universal Health Services ($UHS). Medical facility REITs like Ventas ($VTR) and Sabra Health Care REIT ($SBRA), which own or lease properties to critical access hospitals and rural health clinics, will also benefit from the improved financial health and increased occupancy rates of their tenants. There are no direct losers from this bill, as it expands access and reimbursement without cutting existing programs. The bill was introduced on May 22, 2025, and referred to the Committee on Veterans' Affairs. The next step is committee consideration and potential markup. If it passes committee, it will move to a floor vote in the Senate. Given the bipartisan sponsorship (Sen. Cramer, R-ND, and Sen. Sheehy), the bill has a reasonable chance of progressing through the legislative process.