Medicare’s Rural Emergency Hospital Designation is Finally Here

November 16, 2022 Advisory

After being in the works for several years, and as formally created by the 21st Century Cures Act, effective Jan. 1, 2023, certain rural and critical access hospitals will have the option to elect a new Medicare designation status as a Rural Emergency Hospital (REH). REHs are facilities that convert from either a Critical Access Hospital (CAH) or a rural hospital (or one treated as such under section 1886(d)(8)(E) of the Social Security Act (the Act)) with 50 beds or less, and that does not provide acute care inpatient services, except for post-hospital extended care services furnished in a distinct part unit licensed as a skilled-nursing facility (SNF).

In addition to continuing to provide emergency services and observation care, a facility that converts to an REH can also provide additional outpatient services. Subject to the final rule, the conversion may be effected by submitting a Form CMS-855A (change of information application) rather than an initial enrollment application. This is aimed at expediting the conversion from CAH to REH.

REH Conditions of Participation (CoP)

The REH Conditions of Participation (CoP) establish a full range of health and safety standards specific to governance, services offered, staffing, physical environment and emergency preparedness. Specific requirements include:

  • maintaining a clinician on-call and available on-site within 30 or 60 minutes (depending on whether the facility is in a frontier area);
  • staffing the emergency department 24 hours per day and seven days per week by a qualified emergency medical care provider;
  • developing, implementing and maintaining an effective Quality Assurance and Performance Improvement program;
  • maintaining an annual per-patient average length of stay of less than 24 hours; and
  • maintaining an infection prevention and control and antibiotic stewardship program that adheres to nationally recognized guidelines.

REH Payment Policies

REH services will be reimbursed at the Medicare Outpatient Prospective Payment System (OPPS) payment rate, for the equivalent covered outpatient department service, plus 5%. Beneficiaries are not to be charged coinsurance on the additional 5% payment.

REHs will also receive a monthly facility payment. After the initial payment is established in calendar year 2023, the payment amount will increase in subsequent years by the hospital market basket percentage increase.

Rural Emergency Hospital Quality Reporting (REHQR) Program

There are several reporting requirements that have not yet been finalized. For example, Section 1861(kkk) (7) of the Social Security Act, as added by section 125(a)(1)(B) of Division CC of the CAA, requires the Secretary of Health and Human Services to establish quality measurement reporting requirements for REHs. Notably, too, the Centers for Medicare & Medicaid Services (CMS) plans to finalize in its rules that, for REHs to participate in the REHQR program, they must have an account with the Hospital Quality Reporting (HQR) secure portal and a designated Security Official.

Armstrong Teasdale Takeaways

Effective Jan. 1, 2023, CAHs and other qualifying rural hospitals will have an alternative designation option to consider. The REH status eliminates long-term inpatient care, in efforts to decrease overhead costs. To be eligible, the rural hospital will have to meet the CoP and obtain an HQR account. Payments to CAHs will be 5% higher than the OPPS rate, along with a monthly facility payment to be determined.

The final rule is expected to simplify the change in status procedure and will hopefully also streamline the review and approval process.

If you are interested in learning more about REHs or have any specific questions or concerns on this new designation status, please contact your regular Armstrong Teasdale lawyer, or one of the authors listed below.

Contact Us
  • Worldwide
  • Boston, MA
  • Denver, CO
  • Dublin, Ireland
  • Edwardsville, IL
  • Jefferson City, MO
  • Kansas City, MO
  • Las Vegas, NV
  • London, England
  • Miami, FL
  • New York, NY
  • Philadelphia, PA
  • Princeton, NJ
  • Salt Lake City, UT
  • St. Louis, MO
  • Washington, D.C.
  • Wilmington, DE
Worldwide
abstract image of world map
Boston, MA
800 Boylston St.
30th Floor
Boston, MA 02199
Google Maps
Boston, Massachusetts
Denver, CO
4643 S. Ulster St.
Suite 800
Denver, CO 80237
Google Maps
Denver, Colorado
Dublin, Ireland
Fitzwilliam Hall, Fitzwilliam Place
Dublin 2, Ireland
Google Maps
Edwardsville, IL
115 N. Second St.
Edwardsville, IL 62025
Google Maps
Edwardsville, Illinois
Jefferson City, MO
101 E. High St.
First Floor
Jefferson City, MO 65101
Google Maps
Jefferson City, Missouri
Kansas City, MO
2345 Grand Blvd.
Suite 1500
Kansas City, MO 64108
Google Maps
Kansas City, Missouri
Las Vegas, NV
1980 Festival Plaza Drive, Suite 750
One Summerlin
Las Vegas, NV 89135
Google Maps
Las Vegas, Nevada
London, England
Royal College of Surgeons of England
38-43 Lincoln’s Inn Fields
London, WC2A 3PE
Google Maps
Miami, FL
355 Alhambra Circle
Suite 1250
Coral Gables, FL 33134
Google Maps
Photo of Miami, Florida
New York, NY
7 Times Square, 44th Floor
New York, NY 10036
Google Maps
New York City skyline
Philadelphia, PA
2005 Market Street
29th Floor, One Commerce Square
Philadelphia, PA 19103
Google Maps
Philadelphia, Pennsylvania
Princeton, NJ
100 Overlook Center
Second Floor
Princeton, NJ 08540
Google Maps
Princeton, New Jersey
Salt Lake City, UT
201 South Main Street
Suite 750
Salt Lake City, UT 84111
Google Maps
Salt Lake City, Utah
St. Louis, MO
7700 Forsyth Blvd.
Suite 1800
St. Louis, MO 63105
Google Maps
St. Louis, Missouri
Washington, D.C.
1050 Connecticut Avenue NW
Suite 500
Washington, DC 20036
Google Maps
Photo of Washington, D.C. with the Capitol in the foreground and Washington Monument in the background.
Wilmington, DE
1007 North Market Street
Wilmington, DE 19801
Google Maps
Wilmington, Delaware