CMS issues updated rural emergency hospital guidance

CMS released updated guidance for hospitals interested in participating in Medicare and Medicaid as a rural emergency hospital.

The guidance provided details about the conditions of participation and the conversion process for eligible hospitals looking to participate in Medicare and Medicaid under the rural emergency hospital designation.

Rural hospitals have faced challenges with staying afloat as budget constraints limit their ability to provide care. A 2024 report from Chartis found that over 400 U.S. rural hospitals are vulnerable to closure, and 55% of independent rural hospitals are operating at a loss.

In response to concerns about rural hospital closures and access to care in rural communities, the Consolidated Appropriations Act of 2021 established rural emergency hospitals (REHs) as a new provider type, aiming to promote health equity.

CMS' updated guidance provided a fact sheet on how interested hospitals can go about enrolling in Medicare, determining eligibility and getting technical assistance throughout the process.

One benefit of the REH designation is that Medicare pays REHs an additional 5% over the Hospital Outpatient Prospective Payment System, or OPPS, rate to deliver REH services to Medicare patients.

CMS clarified that in most cases, REH standards align with the current critical access hospital conditions of participation, while accounting for the unique needs of REHs. Eligible critical access hospitals and small rural hospitals can apply to convert to an REH.

Once they have converted, these hospitals must meet specific requirements. For example, eligible facilities designated as REHs are only permitted to provide emergency department services, observation care, and additional outpatient medical services that do not exceed a 24-hour annual per-patient average length of stay.

REHs are not allowed to provide inpatient services "except those furnished in a distinct part licensed as a skilled nursing facility to furnish post-hospital extended care services," CMS noted.

REHs must also have a transfer agreement in effect with a Medicare-certified Level I or Level II trauma center and a staffed emergency department 24 hours a day, seven days a week.

CMS directed entities interested in becoming an REH to submit an application with their Medicare administrative contractor and refer to the Health Resources and Services Administration REH technical assistance center to determine whether an REH is the best care model for the community.

Jill McKeon has covered healthcare cybersecurity and privacy news since 2021.