This legislation aims to support financially vulnerable rural hospitals by allowing states to designate them as Critical Access Hospitals (CAHs) under Medicare, even if they do not meet the standard 35-mile distance requirement from another hospital. This new pathway is available for a limited period of nine years, starting from the bill's enactment, and is capped at 120 facilities nationwide, with no more than five per state. To qualify, hospitals must be located in rural areas, have experienced two consecutive years of negative operating margins , and commit to establishing or expanding a high-demand service line, such as obstetrics or behavioral health, based on community needs. They must also submit a strategic plan for multi-year financial solvency and good governance qualifications. The bill mandates that the Secretary of Health and Human Services implement these provisions within one year and establishes reporting requirements for newly designated CAHs, with potential certification revocation for non-compliance. It also adjusts the acute care inpatient bed limit for CAHs in Guam, American Samoa, the Northern Mariana Islands, and the U.S. Virgin Islands, allowing the Secretary to determine an appropriate number of beds for these territories instead of the standard 25-bed limit. This change aims to better accommodate the unique healthcare needs and infrastructure of these insular areas, while still requiring a 96-hour average length of stay. Furthermore, the legislation requires a Government Accountability Office (GAO) study on the implementation and impact of these new CAH designations, including an analysis of their financial effects on the facilities and Medicare expenditures, and their contribution to rural access to care. The Medicare Payment Advisory Commission (MEDPAC) is also tasked with studying payment systems for rural hospitals, including those newly designated, and recommending potential new models to ensure financial sustainability and preserve access to care for Medicare beneficiaries. Finally, the bill includes a sunset provision, requiring the Secretary to establish a mechanism for these newly designated CAHs to transition to alternative payment models, such as those recommended by MEDPAC or rural emergency hospital status, within one year after the nine-year designation period ends.