Rural Emergency Hospitals Start to Take Shape

Sep 14, 2022 at 07:23 am by steve

CMS recently published a proposed rule describing the conditions of participation for a new type of Medicare provider, the rural emergency hospital. Noting that rural communities represent one-fifth of the U.S. population, in announcing the proposed rule CMS Administrator Chiquita Brooks-LaSure said "the new Rural Emergency Hospital provider type will maintain access to essential healthcare services and help to reduce disparities in rural communities."

Congress established this new provider type in the Consolidated Appropriations Act of 2021 to address concerns about the continuing closure of rural hospitals, which CMS tallies at 138 since 2010. As CMS stated in a press release, the alarming closure of rural hospitals means people living in rural communities "experience shorter life expectancy, higher mortality, and have fewer local healthcare providers, leading to worse health outcomes than in other communities." CMS called the new provider designation "an opportunity for small rural hospitals and critical access hospitals to right-size their service footprint and avoid potential closure so they can continue to provide essential services for their communities."

In general, rural emergency hospitals provide emergency department, observation care, and certain additional outpatient medical and health services, which the proposed rule states are items and services commonly furnished in a physician's office or another entry point into the healthcare delivery system (e.g., radiology, laboratory, outpatient rehabilitation, surgical, maternal health, and behavioral health services) that "align with the health needs of the community served" by the hospital.

Rural emergency hospitals may only provide inpatient services in distinct part units licensed as skilled nursing facilities, and a rural emergency hospital's annual per patient average length of stay may not exceed 24 hours. Additionally, a rural emergency hospital must have been a critical access hospital or rural hospital with no more than 50 beds on December 27, 2020.

Beginning January 1, 2023, Medicare will reimburse rural emergency hospitals at 105 percent of the rates in the Hospital Outpatient Prospective Payment System, and rural emergency hospitals will receive an additional monthly facility payment. In a separate proposed rule, CMS proposed that the facility payment in 2023 would be just over $268,000 per month, for a total of around $3.2 million per year for each rural emergency hospital.

The proposed rule defines the conditions that a rural emergency hospital must meet to participate in the Medicare program. Under these conditions, a rural emergency hospital must, among other things:

Have an organized medical staff that operates under bylaws approved by the hospital's governing body;

Maintain, or have available, diagnostic radiology services, including a full-time or part-time consulting qualified radiologist (or other qualified personnel) to interpret radiologic tests the medical staff determines require specialized knowledge;

Have a pharmacy or drug storage area maintained by a pharmacist or other qualified individual in accordance with state law;

Provide (either directly or through a contract) basic laboratory services essential to the immediate diagnosis and treatment of patients; and

Have an agreement with at least one level I or level II trauma hospital for the referral and transfer of patients who require emergency care beyond the rural emergency hospital's capabilities.

The proposed rule also states that rural emergency hospitals must staff their emergency services in the same way that critical access hospitals do. Under this requirement, practitioners do not have to be on-site at all times. Instead, a physician, physician assistant, nurse practitioner, or clinical nurse specialist must be on call and able to get to the hospital within a specific time, usually 30 minutes. CMS has requested comments about this requirement to gain insight about whether it is appropriate not to require that a practitioner be on-site at a rural emergency hospital at all times.

CMS also requested comments about whether rural emergency hospitals should be permitted to provide low-risk labor and delivery services and whether they should be required to provide outpatient surgical services if surgical labor and delivery intervention is necessary. Comments regarding these issues must be received by August 29, 2022, to be considered while comments to the proposed rule addressing the monthly facility fee must be received by September 13, 2022.

Nate Lykins is an associate at Waller where he assists healthcare providers with regulatory compliance matters ranging from the Stark Law and the Anti-kickback Statute to licensing regulations, Medicare certification, and other operational issues.

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