On January 26, 2023, the Centers for Medicare and Medicaid Services (CMS) issued guidance for Rural Emergency Hospitals (REHs), through which CMS outlined requirements on eligibility, the conversion process for eligible facilities, and other related information. The guidance clarifies the final rule CMS issued in November that established REHs as a new Medicare provider type, effective January 1, 2023.

This provider type was established to address the concern over closures of rural hospitals, which was particularly problematic during the COVID-19 pandemic. The final rule set forth the Conditions of Participation (CoPs) that REHs must meet in order to participate in the Medicare and Medicaid programs. The standards for REHs closely align with the current CoPs for Critical Access Hospitals (CAHs), available here.

This article provides a brief overview of CMS’s recent eligibility guidance.

Requirements

According to the guidance issued by CMS, all hospitals seeking enrollment as an REH must meet the following requirements:

  • The hospital must have at least one medical staff member with training or experience in emergency care on-call at all times and reachable by phone or radio and available on-site within 30 or 60 minutes (depending upon whether the facility is located in a frontier area). That medical staff member must be either a clinician, doctor of medicine, doctor of osteopathy, physician assistant, nurse practitioner or clinical nurse specialist.
  • The emergency department must be staffed 24 hours per day, seven days per week.
  • The hospital must develop, implement and maintain a data-driven Quality Assessment and Performance Improvement Program.
  • The hospital’s annual per-patient average length of stay must not exceed 24 hours, calculated beginning with registration, check-in, or triage of the patient (whichever occurs first) and ending when the physician signs a discharge order.
  • The hospital must have infection prevention and control and antibiotic stewardship programs that adhere to nationally recognized infection prevent and control guidelines and best practices for antibiotic use.

Eligibility

The following facilities are eligible to be an REH, provided that they were enrolled and certified to participate in Medicare as of December 27, 2020:

  • Critical Access Hospitals (CAHs)
  • A “rural hospital”, which is defined as a subsection (d) hospital under Section 1886(d)(1)(B) of the Social Security Act that has not more than 50 beds and  is either in a rural area as defined in Section 1886(d)(2)(D) or that was treated as being in a rural area pursuant to Section 1886(d)(8)(E). Some examples of hospitals that are specifically excluded from the definition of a rural hospital under Section 1886(d)(1)(B) and, thus, are not eligible to be an REH include: 1) psychiatric hospitals, 2) rehabilitation hospitals, 3) hospitals whose inpatients are predominantly under 18 years of age, and 4) hospitals with an average inpatient length of stay greater than 25 days.
  • Facilities that were enrolled as CAHs or rural hospitals with not more than 50 beds as of December 27, 2020, and then subsequently closed after that date, are also eligible to seek REH designation if they re-enroll in Medicare and meet all the CoPs and requirements for REHs.

Enrollment

To enroll as an REH, eligible facilities that satisfy the eligibility criteria outlined above must submit a change of information application, rather than an initial enrollment application, except in the case of facilities that were enrolled as CAHs as of December 27, 2020 and subsequently closed, in which case the facility must re-enroll in Medicare. Prospective facilities should complete the Form CMS-855A change of information application and submit the completed application to their designated Medicare Administrator Contractor for review and approval. The purpose of this is to expedite the conversion process and decrease provider burden. Additional details pertaining to REH enrollment policies are available in the Medicare Integrity Manual.

Action Plans/Transfer Agreements/Attestations

A facility seeking to be designated as an REH must create an action plan outlining the facility’s plan for conversion to an REH and the initiation of REH specific services, including the provision of emergency department services, observation care and other medical and health services elected by the REH. The action plan should include the following elements:

  • Details regarding staffing provisions and the number and type of qualified staff for the provision of REH services, including the provision of emergency department services, observation care, and other medical health services to be provided by the REH.
  • A detailed transition plan listing the specific services the facility with retain, modify, add, and discontinue.
  • A description of services the facility intends to furnish on an outpatient basis, if elected.
  • Information regarding how the facility intends to use the additional facility payment, including a description of the services that the additional facility payment would be supported (i.e. operation and maintenance of the facility and furnishing of services, such as telehealth and ambulance services).

The action plan must be on letterhead and be signed by the facility’s legal representative or administrator, and will be available to the public and posted to the CMS website.

The facility must also have a transfer agreement with at least one Medicare-certified hospital that is designated as a level I or level II trauma center. Finally, an REH must file an attestation that it meets the CoPs for Rural Emergency Hospitals set forth at new Subpart E of 42 CFR Part 485.

Upon receipt of all of these items, the state survey agency will review the submissions and forward its recommendation to CMS as to whether to enroll the hospital as an REH. This new provider type has the potential to significantly impact access to care in rural areas, including by provided increased funding to providers in these vulnerable areas.

Reed Smith will continue to track developments on the regulation of Rural Emergency Hospitals as a provider type. For further information or for advice on how this guidance affects you, please reach out to the author of this post or to your health care lawyer at Reed Smith LLP.