Are you with a State Office of Rural Health or an association and want to get your hospitals connected?

A facility is eligible to enroll as an REH if it is a critical access hospital (CAH) or a rural hospital with fifty beds or less as of the date of enactment of the Consolidated Appropriations Act, December 27, 2020.ⁱⁱ

Financial or operational benefits from REH conversion are highly dependent on the hospital’s circumstances. Rural hospitals facing a high likelihood of closure may benefit from enhanced payments made available to REHs. REHs will receive the Outpatient Prospective Payment System rate plus an additional 5 percent for REH-covered services. Non-REH services (such as laboratory and distinct part Skilled Nursing Facility services) are paid according to the facility’s respective fee schedule and do not qualify for the additional five percent payment. In addition, REHs will receive a monthly facility payment of $272,866 before sequestration in 2023, with annual increases determined by the hospital market basket. The hospital market basket adjustments are made on January 1 to align with the calendar year. REHs can also determine the appropriate licensure and credentials for a 24/7 staffed emergency department. Hospital leadership can elect to provide additional services that meet the community’s needs.

As the REH provider designation became active for Medicare on January 1, 2023, states have varied legislative and regulatory responses to recognizing the provider type. The National Conference of State Legislatures is currently tracking legislation and regulatory action in states related to REHs. To access the most recent information about state-level REH legislation, visit the Health Costs, Coverage and Delivery State Legislation database and filter on “Payment and Delivery Reform” under “Market” in the topic search section. You can also filter by state and status (as in, adopted, enacted, to the governor) of the legislation. For additional support related to state legislation: NASHP NACSL.

A hospital must meet all REH requirements and have been operating as a licensed hospital on the date the legislation passed allowing the new REH designation. Since the hospital closed before December 27, 2020, and was not functioning as a hospital as of that date, it is not currently eligible to be reopened as a licensed REH.

The enrollment process was simplified to allow existing hospitals and CAHs to submit the CMS-855A – change of information application to prevent closure of facilities that may disrupt services in the community. The hospital should submit its enrollment application prior to closure. If the hospital continues operating while the application is reviewed, it is eligible for the attestation of compliance. If the hospital closes before the REH designation, an on-site survey is required to ensure CoP compliance. More information is available in the Guidance for Rural Emergency Hospital Provisions, Conversion Process and Conditions of Participation memo. 

The REH must maintain rural status or remain in an area designated or reclassified rural per 42 CFR §412.103. When an REH plans to relocate, it must update the CMS-855A form and submit it for reapproval. More information is available in the Guidance for Rural Emergency Hospital Provisions, Conversion Process and Conditions of Participation memo.