Rural Emergency Hospital Designation May Help Save Rural Hospitals

Apr 23, 2024 at 10:47 am by kbarrettalley

By Marti Webb Slay


When Rural Emergency Hospital (REH) designation took effect on January 1, 2023, Bob Bernstein, principal at Medovation Health, and the hospital leadership of Bullock County Hospital in Union Springs, Alabama, began investigating the process to achieve that designation.

Medovation Health had assumed contract management of financially-distressed Bullock County Hospital in 2022, and moving to become an REH seemed to make sense. “REH has the potential to be a savior for rural healthcare,” Bernstein said. “When care is delivered closer to home, treatable conditions are identified earlier, and with telemedicine and mobile diagnostics, patient compliance soars. It’s a win for everyone.”

REHs are required to provide 24-hour emergency and observation services and can elect to furnish other outpatient services. An REH cannot have inpatient beds, except those furnished in a distinct unit licensed as a skilled nursing facility. Facilities designated as an REH receive enhanced Medicare payments for certain outpatient services and additional monthly payments.

While Bernstein gives high marks to all the agencies involved, both state and federal, for being helpful in pursuing this new process, Medovation Health has hit a few bumps in the road in their effort to achieve REH designation.

The biggest stumbling block has been the federal requirement to eliminate all inpatient beds. Bullock County Hospital has more than 30 inpatient psychiatric beds, and with the shortage of mental health beds in the state, they were loath to close them. They hoped the solution would be to create a separate legal entity that would create a psych hospital in the facility that contracted services to the REH, but they were unable to achieve that goal because of regulations, cost and other legal barriers.

“BCH was the first to pursue REH and appears to still be the only active application in the state,” Bernstein said. “Our goal is to convert by May 1. It is likely that others will follow now that the process is better-defined.”

Medovation Health has enlisted the aid of the Rural Health Redesign Center (RHRC) and the Rural Emergency Hospital Technical Assistance Center (REH-TAC) to help with the process.

“The Rural Emergency Hospital designation works best to help hospitals that have low inpatient census,” said Anna M. Anna, RN, BSN, MHA, BC-NE, RHCEOC, program director of RHRC. “The goal of the REH designation is to help small rural hospitals stabilize and continue to provide current services in emergency care and observation care, as well as to offer and even expand outpatient services to meet the healthcare needs in their community. Hospitals that have general psych or behavioral health are concerned about losing these services for their communities. They may struggle as they try to determine what works best.”

The process for working with RHRC begins with a half hour introductory call, and if the hospital meets eligibility criteria, they are invited to be part of a cohort process to apply for REH status. “If they decide to go through the process, we provide them with technical assistance to help them figure out what it’s like to be an REH hospital and what that means for them. We also work with them on their individual community needs. Transitioning to an REH will be different than their current services, but it’s exciting to think they can grow, and bring more value to the community. And the financial stability that REH status could bring to some of these hospitals will allow them to invest in outpatient care,” Anna said. “They can start thinking differently about how they serve their community.”

“We are still learning a lot,” Bernstein said. “CMS came up with a global approach to this, but left implementation in large part to the individual states. How are they going to license it, what is their process going to be? As far as we know, we are still the first to try going online in Alabama so some of the state agencies, particularly ADPH which has licensure responsibility, are appropriately trying to figure out how this conversion jives with their responsibility to public health and building codes and other regulations out there. It’s a complex process.”

“The struggles that we see across the county in rural health care are real,” Anna said. “This is a solution. It may not be the right solution for all of the struggling rural hospitals, but it is the right solution for some of them, to help them survive and continue to meet the needs of their community.”

If you have questions or would like assistance determining feasibly for conversion to REH, contact RHRC at or Medovation Health at

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May 21, 2024 at 01:33 pm by kbarrettalley

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