Our White Paper At a Glance. A Summary of Our Early Learnings.

The Rural Emergency Hospital (REH) designation has emerged as a potential solution to the escalating crisis of rural hospital closures across America. Our white paper includes pivotal early learnings and serves as a useful resource for medical professionals navigating this new hospital designation.

Background and Rationale for Rural Emergency Hospital Designation

The REH designation was introduced as a new Medicare provider type to combat the escalating rate of rural hospital closures. This designation aims to maintain essential services for rural residents and reduce the likelihood of further hospital closures. Over 150 rural hospitals have closed since 2010, leading to diminished access to healthcare and adverse economic effects in rural areas.

RHRC as Support System for Transition

The Rural Health Redesign Center (RHRC), with funding from the Health Resources and Services Administration (HRSA), provides technical assistance through the Rural Emergency Hospital Technical Assistance Center (REH-TAC). This assistance includes education, financial modeling, application assistance, and strategic planning to support hospitals considering the REH designation. These services are provided at no cost to hospitals and tailored to the unique needs of their individual communities.

Eligibility and Operational Changes

Hospitals eligible for REH status must be licensed as Critical Access Hospitals or rural hospitals with fewer than 50 beds as of December 27, 2020. Once converted, REHs can no longer provide inpatient care but can offer emergency services, observation care, and other outpatient services.

Payment Structures and Reimbursement

The REH designation includes Medicare payment features, such as an annual facility payment of over $3.2 million in 2023, with yearly increases according to the hospital market basket rate.

More information about payment rules is available on the REH resources page of the RHRC website. 

Anticipated Impact and Conversion Considerations

Predictive models suggest that 68 hospitals could potentially convert to REH based on financial and operational metrics. 

Challenges and Hospital Concerns

Hospital leaders express concerns about discontinuing swing bed care and behavioral health services, as well as the financial implications of losing certain program revenues.

Potential regulatory adjustments and the loss of state-specific facility licensing pose additional challenges to conversion. 

Decision-making Process

Hospital leaders face tough decisions about whether the REH designation aligns with their community’s needs and whether they can overcome the challenges associated with the transition. The white paper suggests that many hospitals are taking a cautious approach, with ongoing evaluation needed to determine the long-term success and sustainability of the REH designation.

Conclusion

This white paper serves as an informative guide for medical professionals. It provides a comprehensive look at the newly created REH provider type and the process and considerations involved in transitioning to this designation.

Janice Walters
Executive Director
Janice has been leading the work of the RHRC since its inception. She has a background in health finance and is a highly rated rural health expert with over 20 years of relevant leadership experience.