Will Rural Emergency Hospitals Save Rural Health Care?

All eyes are on the new proposal put forth by CMS to create Rural Emergency Hospitals.

Although the vast majority of the US population live in non-rural areas, illness can strike at any time, in any location. And if one is traveling, the presence of a blue “H” on a sign on the highway “in the middle of nowhere” may be a life-saving sight. Slowly but surely though those H signs are disappearing. Rural hospital closures are not a new phenomenon. Since 2010, 138 rural hospitals have closed, including 44 critical access hospitals.

In an attempt to preserve the availability of emergency and outpatient care in rural areas, Congress included within the Consolidated Appropriations Act of 2021 a provision that establishes a category of hospital referred to as “Rural Emergency Hospital.”  

Last week, the Centers for Medicare & Medicaid Services (CMS) released the proposed rule CMS-3419-P establishing rules and conditions of participation for a rural emergency hospital, abbreviated REH. Such a hospital will be permitted to provide emergency care, observation services, and other outpatient care. Inpatient care will not be permitted, although the hospital may also have a distinct part skilled nursing facility that provides inpatient part A skilled nursing care.

As with all proposed rules, CMS has laid out what they see as the operational guidelines for such a facility and a comment period will be opened on July 6 for 60 days, so the final rules are yet to be known. In summary, these facilities will be required to provide emergency care 24 hours a day, 7 days a week. The requirement is that there be staff on site at all times who can competently receive a patient, such as a nurse, nursing assistant, clinical technician, or an emergency medical technician. This staff person would then activate the appropriate medical resources by contacting a physician, nurse practitioner, clinical nurse specialist, or physician assistant.

The REH can also provide observation services to patients if clinically indicated and may provide outpatient surgical services. The REH must have on site laboratory services, with CMS even going so far as to specify which tests they would require, including troponin, BNP, D-Dimer, lactate, urine toxicology and many of the common tests such as blood counts and chemistry panels. CMS also requires radiology services but unlike laboratory services, they delineate no specific imaging modalities, instead specifying that the services “meet the needs of their patients.”

There are no specific requirements regarding the provision of providing maternal health services including low-risk labor and delivery or emergent c-sections, but CMS does ask for comment on whether such services should be allowed. Outpatient behavioral health can also be provided but not inpatient psychiatric care.

Just as critical access hospitals are limited to an annual inpatient care limit of 96 hours, CMS is proposing that REHs have an annual per patient average of under 24 hours. In the proposed rule, CMS does not address how this is calculated with no indication if this refers simply to patients who receive observation services, ED visits and observation services, or all patients. As was pointed out to CMS, it is a national problem to find hospital care for patients requiring acute psychiatric care and as a result, REHs may be forced to hold some patients for many days awaiting transfer. CMS acknowledges this but notes that “However, we believe that this will occur at a frequency that will not seriously affect the REH’s average length of stay.”

The definition of “under 24 hours” will require significant clarification from CMS. When CMS sets chart limits for recovery audit contractors (RACs), they count every claim submitted by a provider, meaning that a patient who walks into the lab for a fasting lipid panel is counted the as one claim, just as is the patient who is hospitalized for inpatient surgery. This inclusion of every claim drastically increases the number of charts the RACs can request. Likewise, a REH should be able to count the 15 minutes that an ambulatory patient spends in the hospital getting their blood test as part of the calculation of their average time spent by their patients to meet the 24 hour or less standard.

REHs will be required to have a formal transfer agreement with a hospital that is a level I or level II trauma center. This agreement could be with a hospital in another state if necessary, and the REH will also be allowed to have other agreements for transfer to non-trauma hospitals if desired.

While it can be hoped that establishing such a category of hospital will help reduce the lack of access to care in rural areas, CMS also understands the financial difficulties that hinder rural care. They are therefore proposing to pay for care at the Outpatient Prospective Payment System (OPPS) rate plus five percent, along with providing an unspecified “additional monthly facility payment.” To avoid increased beneficiary liability, CMS will limit patient coinsurance to the amount due on the OPPS payment excluding the five percent.

It is worth noting that while REHs are permitted to provide Part A skilled nursing care, this must be provided in a distinct area of the facility. This is not the same as swing bed services that can be offered at critical access and rural hospitals where the patient does not have to change rooms. This perhaps is an opportunity for an existing SNF to convert a part of their facility into a REH.

Finally, CMS does propose a full set of conditions of participation, including requirements for discharge planning that mandate addressing patient’s goals of care and treatment preferences and arranging post-acute care as indicated, along with nursing, environment of care, medical record conditions, and others.

It is exciting to see CMS address the rural health crisis with this proposal. Let us all hope that this is successful. I know that as I travel around the country, knowing there are rural hospitals provides me great comfort in case of the unexpected.

Programming Note: Listen every Monday at 10 Eastern as Dr. Hirsch makes his Monday Rounds on Monitor Mondays, sponsored by R1RCM.


Ronald Hirsch, MD, FACP, CHCQM, CHRI

Ronald Hirsch, MD, is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays. The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

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