PEAKS Act Grandfathers Rural Hospitals to Preserve Critical Access Status Past 2026

The Preserving Emergency Access in Key Sites Act, or PEAKS Act, is a targeted piece of legislation aimed squarely at protecting rural healthcare access by stabilizing the status of small, essential hospitals. Specifically, Section 2 ensures that hospitals currently designated as Critical Access Hospitals (CAHs) will keep that designation even if they fail to meet a strict 15-mile distance requirement for mountainous or secondary roads after January 1, 2026. This stability is critical for these facilities, which rely on the CAH designation for specific Medicare reimbursement that keeps their doors open in isolated areas.

Why the Grandfather Clause Matters

To become a CAH, a hospital usually has to be located a certain distance from another hospital—often 15 miles in mountainous terrain. This bill creates a crucial 'grandfather' exception: if a hospital was already a CAH when this law passes, and it can prove it met that 15-mile rule the last time it was certified, it gets to keep its status after the 2026 deadline. This means that a small hospital serving a remote community—like one in rural Montana or upstate New York—won't suddenly lose its lifeline funding simply because a new clinic or facility pops up 10 miles away down the road. The whole point is to stabilize access for the people who live there, ensuring their local emergency room doesn't close due to a technicality.

The Secretary of Health and Human Services has been tasked with writing the official rules to implement this grandfathering within one year of the law’s enactment. While this provides regulatory clarity for the hospitals, it also means the Centers for Medicare & Medicaid Services (CMS) will need to dedicate administrative resources to this new rulemaking process. For existing CAHs, this provision is a huge win for long-term planning, effectively taking the threat of losing their designation off the table, provided they met the criteria previously.

Clearing the Air on Ambulance Rides

The second major piece of the PEAKS Act, Section 3, deals with how CAHs get paid for ambulance services under Medicare. Currently, Medicare often limits how far an ambulance can travel and still be covered, frequently tied to a 35-mile drive limit. Section 3 doesn't spell out the new rule, but it modifies the existing statute (Section 1834(l)(8) of the Social Security Act) to insert a new exception or clarification right after that 35-mile rule is mentioned.

Think of it this way: if a CAH ambulance has to drive 40 miles to pick up a patient in a severely isolated area, the hospital needs to know they will get reimbursed. This modification aims to clarify the rules for those longer, necessary transports that often happen in rural areas. While the exact clarification is vague in the bill text—it just says they are inserting new language—the intent is clearly to ensure CAHs are properly paid for essential emergency transport, reducing financial uncertainty when serving widely dispersed populations.