Dive Brief:

• The CMS has issued a proposed rule that would implement a new provider designation for rural hospitals, with the aim of preventing facility closures and preserving access to care, particularly emergency and other outpatient services.
• Congress enacted the Consolidated Appropriations Act of 2021 creating the new rural emergency hospital provider type to address growing concerns over closures of rural hospitals.
• The CMS proposal lays out conditions that facilities designated as rural emergency hospitals would need to meet to participate in Medicare and Medicaid programs. Payment and enrollment policies for the new Medicare provider type will be developed in a separate rulemaking process, the CMS said.

Dive Insight:

Rural hospitals can face the threat of closure when they lack sufficient patient volumes to support the traditional inpatient acute care services required for Medicare payment, according to the CMS. But with roughly 20% of Americans living in rural parts of the country, demand still exists for emergency and outpatient services in these areas.

Between 2010 and February 2022, 75 rural hospitals closed. Another 63 ended inpatient services but continued to provide some type of healthcare, the agency said. Rural hospital closings not only limit access to care, but reduce employment opportunities and hurt local economies. The result can be unmet health needs, delays in receiving appropriate care, inability to get preventive services, financial burdens and preventable hospitalizations.

People living in rural areas often have shorter life expectancies, higher all-cause mortality, higher rates of poverty, fewer local doctors, and greater distances to travel to see providers, compared to their urban and suburban counterparts, the CMS said.

The rural emergency hospital designation was developed to address these inequities and improve overall health outcomes in rural areas. 

Under the proposed rule, small rural hospitals that seek the new provider designation could provide continued access to emergency services, observation care and other medical and outpatient services that do not exceed a per-patient average of 24 hours annually. Outpatient care would include maternal health, behavioral health and substance use disorder services.

Critical access hospitals participating in Medicare when the Consolidated Appropriations Act was enacted or rural hospitals with fewer than 50 beds may submit an application to convert to a rural emergency hospital.

The proposed rule also would add a definition of "primary roads" to current location and distance requirements for determining if a facility qualifies as a critical access hospital. Those that are part of a larger health system would be allowed to integrate infection control and antibiotic stewardship programs, medical staff and quality improvement programs. CMS also is proposing to add a patient’s rights requirement for critical access hospitals. 

Rural emergency hospitals will be eligible to receive Medicare payments for services provided beginning Jan. 1, 2023.

The comment period for CMS’ proposed rule closes on Aug. 29.