The "Rebuild America’s Health Care Schools Act of 2025" expands Medicare coverage to include all direct and indirect costs hospitals incur for nursing and allied health education programs, ensuring better funding and preventing recoupment of previously covered costs.
Darin LaHood
Representative
IL-16
The "Rebuild America’s Health Care Schools Act of 2025" updates how Medicare reimburses hospitals for the costs of running nursing and allied health education programs. It broadens the definition of "reasonable costs" to include both direct and indirect expenses, regardless of whether they are incurred directly by the hospital or through related entities. The Act also requires the Secretary of Health and Human Services to issue rules implementing these changes and to refund hospitals for past cost reductions that would now be allowable. This aims to provide greater financial support for these crucial healthcare education programs.
Medicare to Cover More Nursing and Allied Health Education Costs Under New Bill, Refunds Past 6 Years of Denials
The "Rebuild America's Health Care Schools Act of 2025" is essentially revamping how Medicare pays for nursing and allied health education. Instead of just covering some costs, Medicare will now have to cover all direct and indirect costs hospitals rack up when training nurses and other allied health professionals. This is a big shift, and here's how it breaks down:
Paying for Education
The core change is that the bill expands what Medicare considers "reasonable costs" for these training programs (SEC. 2). Previously, there were limits. Now, any cost a hospital incurs to run a licensed or accredited program is covered. This includes costs directly paid by the hospital, costs passed down from a "related entity" (like a parent company or partner organization), or costs linked to students training at the hospital or a related site. The bill defines "related entity" pretty broadly, covering organizations with shared ownership, control, or even just a shared board (SEC. 2).
- Real-World Example: Imagine a large hospital system (St. Jude's) owns a nursing school (St. Jude's College of Nursing). Previously, only some costs of running that school might be covered by Medicare. Now, all costs—from instructor salaries at the college to supplies used by students training in the hospital—are on the table. Even if the St. Jude's system set up a separate company to manage the school, those costs could be passed through.
Getting the Rules Straight (and Getting Money Back)
The bill doesn't just change the rules; it also forces the government to act fast. The Secretary of Health and Human Services (HHS) has 120 days to issue new regulations reflecting these changes (SEC. 2). More importantly, the bill stops the government from clawing back money it already paid hospitals for these programs if those costs would be allowed under the new rules (SEC. 2). And, in a major win for hospitals, the government has to refund any money it took back in the last six years if those costs are now considered legit (SEC. 2).
- Real-World Impact: If a hospital was previously denied reimbursement for, say, the cost of specialized simulation equipment used in their nursing program, they could get that money back, plus get those costs covered going forward. This could mean a significant financial boost for hospitals running training programs, potentially freeing up resources for other areas or even expanding the programs themselves.
The Rebuild America's Health Care Schools Act of 2025 is a clear win for hospitals that train nurses and allied health professionals. While the goal is to bolster the healthcare workforce by reducing the financial burden of training, the broad definition of "related entities" and the retroactive refunds could lead to significant shifts in how Medicare dollars are spent. It's a big change, and it's happening fast.