RESOURCES

Financial or operational benefits from REH conversion are highly dependent on the circumstances of the hospital. 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, distinct part Skilled Nursing Facility services) are paid according to the facility’s respective fee
schedule and do not qualify for the additional 5 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 January 1 to align with the calendar year.

REHs also have the flexibility to determine the appropriate licensure and credentials for a 24/7 staffed emergency
department. Hospital leadership can elect to provide additional services that meet the needs of the community.

As the REH provider designation became active for Medicare on January 1, 2023, states have varied in their legislative and regulatory response 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 legislation related to REHs go to 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.

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. As a result, since the hospital closed prior to December 27, 2020, and was not functioning as a hospital as of this 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 versus. If the hospital closes prior to the REH designation, an on-site survey to ensure CoP compliance is required. More information is available in the Guidance for Rural Emergency Hospital Provisions, Conversion Process and Conditions of Participation memo.

The application process for converting to an REH includes a change of information application – Form CMS-855A. An eligible hospital can apply – submitting the Form along with an action plan and a transfer agreement. The complete process for eligible facilities to convert to an REH is outlined in the Medicare Enrollment of Rural Emergency Hospitals³ and the Guidance for Rural Emergency Hospital Provisions, Conversion Process and Conditions of Participation memos.