PEAKS Act Boosts Rural Hospital Funding by Expanding Ambulance Coverage Beyond 35 Miles

The Preserving Emergency Access in Key Sites Act, or PEAKS Act, is a targeted piece of legislation focused squarely on protecting and supporting Critical Access Hospitals (CAHs)—the small, essential facilities that keep healthcare running in rural America. This bill makes two key modifications to how Medicare pays these hospitals, primarily ensuring they can keep their lights on and their ambulances running, especially in remote areas.

The Ambulance Distance Fix: When 35 Miles Isn’t Enough

The first thing the PEAKS Act tackles is ambulance reimbursement for CAHs. Right now, Medicare has specific rules about how far an ambulance can travel before the payment structure changes. This bill updates Section 1834(l)(8) of the Social Security Act to explicitly include longer trips in the existing payment calculations. Essentially, it ensures that when a CAH ambulance has to drive more than 35 miles to get a patient the care they need—say, driving from a remote clinic to a major regional trauma center—Medicare payment will properly account for that extended distance.

Think about it this way: If you live in a sprawling rural county, your nearest CAH might be 15 miles away, but the nearest specialist might be 50 miles away. That 50-mile trip costs time, fuel, and staff wages. This change provides better, more realistic reimbursement for those long-haul emergency runs, which is crucial for the financial survival of these smaller hospitals that often operate on thin margins. It’s a direct financial boost intended to keep emergency services accessible in areas where they are often the only option.

Securing the CAH Status: The Grandfather Clause

The second major change is a kind of “grandfather clause” for hospitals that already hold the coveted Critical Access Hospital designation. To be a CAH, hospitals usually have to meet certain distance requirements, like being at least 15 miles away from another hospital in mountainous or secondary road areas. The PEAKS Act creates a special rule, effective January 1, 2026, that automatically deems existing CAHs compliant with that 15-mile distance rule if they met it during their last certification review.

This matters because rural hospitals often face pressure to merge, consolidate, or build new facilities. Under Section 3, if a hospital was already a CAH when this law is enacted and met the distance rule at its last check-up, it gets to keep that designation automatically. Even if that hospital opens a new, related facility between 10 and 15 miles away from the original site, the special status remains. This provision removes a major administrative hurdle and potential threat to the CAH status, providing long-term stability for these essential healthcare access points. It’s a way of saying: if you’re already serving this remote community, we’re not going to pull the rug out from under you over a small change in facility location.

What This Means for Everyday People

For anyone living in a remote or rural area, the PEAKS Act is about reliability. Section 2 means that when you call 911, the ambulance service is more likely to be financially stable enough to make that long drive to the specialized care you need, without the hospital taking a big loss. Section 3 means the small hospital you rely on for basic care, lab work, and emergency stabilization is more likely to keep its CAH designation—which comes with better Medicare funding—ensuring that essential facility remains open in your community. The Secretary of Health and Human Services has one year after the law is passed to write the specific regulations for this grandfather clause, so the actual rollout of the new designation rules will take time, but the intent is clear: shore up the financial foundation of rural healthcare.