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New Rural Emergency Hospital Designation

Thinking about becoming a Rural Emergency Hospital? Learn more about the new Centers for Medicare & Medicaid Services (CMS) rule below and how Intellimed’s data can help you

In an effort to curb closures and provide an influx of cash to struggling rural hospitals, CMS recently announced a new Rural Emergency Hospital (REH) designation that is now effective as of January 1st, 2023. The new option is only available to current Critical Access Hospitals and rural hospitals who meet specific requirements.

To help rural providers understand the implications of becoming an REH, we’ve compiled an FAQ along with some benefits and drawbacks to consider when exploring changing your designation. We are also offering a comprehensive reporting package designed to get you all the information you need to make an informed decision, click here to schedule a time to learn more.

Who can become a Rural Emergency Hospital?

Critical Access Hospitals (CAHs) and rural hospitals, or hospitals that meet the criteria under 1886(d)(8)(E) of the Social Security Act, that do not have more than 50 beds and do not provide acute care inpatient services, with the exception of extended care services if they are provided in a unit licensed as a skilled-nursing facility, are eligible to become a Rural Emergency Hospital.

What services can Rural Emergency Hospitals provide?

Emergency services and observation care. The REH also has the ability to elect to provide some outpatient services, as long as they do not exceed 24 hours of care. The designation of outpatient services is purposely broad and includes all covered outpatient department services (as defined in section 1833(t)(1)(B) of the Act (other than clause (ii) of such section)).

REHs can also provide post-hospital extended care services, as long as the services are provided in a distinct unit that is licensed as a skilled nursing facility.

What is CMS’ primary goal in creating Rural Emergency Hospitals?

The Rural Emergency Hospital designation was established to promote health equity for rural populations and help facilitate nearby access to needed emergency services. CMS hopes that this will halt rural hospital closures and help rural facilities stay financially viable by reducing unneeded beds and improving efficiency.

Can Rural Emergency Hospitals provide inpatient care?

No, and rural hospitals who decide to become an REH will need to discontinue inpatient services. See other questions for more information.

What payment rate will REHs receive?

REHs will be paid equal to the Outpatient Prospective Payment System (OPPS) payment rate, for the equivalent covered outpatient department service, plus an additional 5% for REH services. Be aware that beneficiaries will not be charged coinsurance on the additional 5% payment.

As REHs can also provide a wide array of outpatient services and extended care services that meet the requirements, including some that are not otherwise paid under OPPS, please note that these services will not be considered REH services and instead be paid under the applicable fee schedule. These services will not receive the additional 5% payment increase applied to REH services.

Will REHs receive a monthly facility payment?

Yes, they will receive a monthly payment of $272,866 in 2023. Payment amounts then will adjust every year according to the hospital market basket percentage increase.

What are the conditions of participation?

The standards of care are similar to CAH CoPs standards and also closely align with current hospital and ambulatory surgical center standards with some exceptions. Specific requirements are listed below, and were taken directly from the CMS website here:

        • REHs must have a clinician on-call at all times and available on-site within 30 or 60 minutes depending on if the facility is located in a frontier area.
        • The REH emergency department must be staffed 24 hours per day and seven days per week by an individual competent in the skills needed to address emergency medical care, and this individual must be able to receive patients and activate the appropriate medical resources to meet the care needed by the patient.
        • REHs must develop, implement, and maintain an effective, ongoing, REH-wide, data-driven Quality Assurance and Performance Improvement (QAPI) program, and it must address outcome indicators related to staffing.
        • The annual per-patient average length of stay cannot exceed 24 hours, in accordance with the statute, and the time calculation begins with the registration, check-in, or triage of the patient and ends with the discharge of the patient from the REH (which occurs when the physician or other appropriate clinician has signed the discharge order or at the time the outpatient service is completed and documented in the medical record).
        • REHs must have an infection prevention and control and antibiotic stewardship program that adheres to nationally recognized guidelines.
Do Rural Emergency Hospitals have to enroll in Medicare?

Yes, providers are required to enroll in Medicare in order to receive payments for services and items provided to Medicare beneficiaries. Medicare provider enrollment regulations in 42 CFR Part 424, subpart P, will be updated to address enrollment requirements for REHs. There will be more information to come on this.

How can my hospital convert to a Rural Emergency Hospital?

A facility will be able to submit a change of information application (Form CMS-855A) instead of an initial enrollment application to convert from a CAH to an REH. This should help expedite the change from CAH to REH. It is not clear if this will also be available to rural hospitals without the CAH distinction.

How does this impact the Physician Self-Referral Law (“Stark Law”)?

According to the CMS website, revisions are being made to certain existing exceptions to include REHs in the CY 2023 OPPS/ASC final rule. CMS is not finalizing the proposed exception for ownership or investment interests in an REH. However, the rural provider exception, which includes only limited statutory requirements to ensure that the physician self-referral law does not create a barrier to care for residents of rural areas, remains available to REHs. This information was taken directly from the CMS website here.

What quality metrics will Rural Emergency Hospitals use and how will they be provided?

The Social Security Act requires the establishment of quality measurement reporting for REHs, however these are still being finalized by CMS. However, in order for REHs to participate in the Rural Emergency Hospital Quality Reporting (REHQR) Program, they will need an account with the Hospital Quality Reporting (HQR) secure portal and a designated Security Official (SO). CMS has sought comment on measures under consideration, alongside topics for further rulemaking. You can read more about this here.

Are there data available surrounding ED visits?

Yes, although availability does vary by state. Intellimed provides ED data from across the U.S., and also calculates use rates and forecasts based on the best available data in order to provide insights into regions without ED data. Intellimed is also offering a detailed report package to help you determine the best way to care for your community. The report package includes estimated impact on access to care, a detailed market assessment, and projected emergency department and discharge volumes to help determine if making the switch is financially viable. 

How can I determine if there is enough demand to justify the switch to an REH?

Intellimed provides an Emergency Department Forecast tool that can help you understand current and changing demand for ED services by zip code to determine if making the switch to an REH is right for you. You can also pair it with Intellimed’s discharge forecasting and other reports we have available to help in your analysis to determine if it is financially viable to continue providing inpatient care based on current and forecasted demand for services.

Intellimed’s Community Blueprint Initiative is designed to help get data into the hands of independent and rural healthcare providers like you, and includes our ED and Discharge forecasts for an affordable price.  If you are interested, you can schedule a time to learn more here

Reach out to our team here to learn more about how you can use data to determine if becoming an REH is right for your facility and community needs.

If we become an REH, how can we accurately measure patient outcomes after they have been transferred to a different facility?

Your facility would still be able to use discharge data and other datasets to quantify patient outcomes at the facilities you transfer patients to. This would also allow you to identify locations where patients have better outcomes and shape referral relationships with other providers. If you’re interested in comparing quality metrics for multiple facilities, schedule a time to chat with us here.

How does would becoming a Rural Emergency Hospital impact how far people in my community have to travel for care?

Overall, this depends on your specific facility and the care needs of your community. Depending on needs, some patients may have to travel further for some care or will need to be transferred to different facilities. We suggest identifying which service lines and procedures would be most impacted by discontinuing inpatient services and determining the closest available alternative. You can also utilize a transfers or outmigration report to determine where patients from your market are currently being transferred or traveling to. Reach out to us here to learn more about how you can use data to better understand the potential impact on your community.

What are the primary benefits to becoming a Rural Emergency Hospital?

Becoming a REH allows hospitals that may have otherwise closed a pathway to affordability with increased payment rates and a monthly facility payment.

What are some drawbacks to consider when thinking about becoming a Rural Emergency Hospital?

Some rural emergency hospitals may face issues with transfers being rejected as some CAHs and rural hospitals faced during COVID. Another possible worry is during weather issues, as it may be challenging or impossible to transfer patients to a different care facility when undergoing an emergency or transportation blockage.

Where can I find more information?
    • You can find a fact sheet on the CY 2023 OPPS/ASC Payment System Final Rule (CMS-1772-FC), here.
    • For a fact sheet on Rural Emergency Hospitals, go the CMS website here.
    • For a CMS blog on the behavioral health polices in the CY 2023 Physician Fee Schedule and Outpatient Prospective Payment System final rules, go here.
    • The CY 2023 OPPS/ASC Payment System Final Rule can be viewed here.
    • Intellimed is offering a comprehensive reporting package designed to get you all the information you need to make an informed decision, please click here to schedule a time to learn more.
    • Learn more about Intellimed’s Community Blueprint Initiative, which is designed to provide affordable data to rural and community healthcare providers here

Get In Touch

(888) 214-1415  I  contact@intellimed.com

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