November 18, 2025 - National Harbor, Md. — Responding to growing financial uncertainty facing many rural hospitals, physicians and 
medical students at the Interim Meeting of the American Medical Association (AMA) voted to adopt standards for designing alternative payment models (APMs) that could work to bolster rural hospital sustainability.
John C. Fremont Hospital in Mariposa, California
“Rural hospitals provide essential care for nearly one-fifth of Americans and ensuring they remain open and financially viable is critical to community health,” said AMA Board Member Ilse Levin, DO, MPH & TM. “To sustain and strengthen access to health care for rural residents, the AMA believes that alternative payment models that meet the AMA’s new minimum standards will best support the financial viability of rural hospitals struggling to stay open within traditional payment structures.”
Many rural hospitals face severe financial pressures. A recent analysis found that half of rural hospitals nationwide operate at a deficit, and many have been forced to discontinue vital services like obstetric/gynecological, emergency, mental health, and cancer care if they do not close all together. These hospitals often serve older, sicker populations, with low patient volumes, high uncompensated care, and growing administrative burdens.
The AMA’s new standards for rural hospital-focused payment models aim to address these challenges. They include fixed-cost payments on a predictable schedule, adequate rates for variable services, and affordable patient cost-sharing. Models must also ensure high-quality, evidence-based care led by physicians and minimize administrative burdens.
The AMA will continue to monitor payment reforms, educate rural communities, and advocate that funds are used as intended. By setting these standards, the AMA underscores its commitment to keeping rural hospitals financially sustainable and accessible, safeguarding essential services for rural communities in the years ahead.
About the American Medical Association
The American Medical Association is the physicians’ powerful ally in patient care. As the only medical association that convenes 190+ state and specialty medical societies and other critical stakeholders, the AMA represents physicians with a unified voice to all key players in health care. The AMA leverages its strength by removing the obstacles that interfere with patient care, leading the charge to prevent chronic disease and confront public health crises and, driving the future of medicine to tackle the biggest challenges in health care.
Source: American Medical Association
