NOTE: All in-article links open in a new tab.

Rural Emergency Hospitals Proposed Conditions of Participation

Published on 

Wednesday, July 13, 2022

 | Billing 
 | Quality 

On June 30th, a proposed rule was released titled, Conditions of Participation for Rural Emergency Hospitals and Critical Access Hospital COP Updates (CMS-3419-P). A related CMS Fact Sheet (link) notes that “Rural Emergency Hospitals (REHs) are a new provider type established by the Consolidated Appropriations Act of 2021 to address the growing concern over closures of rural hospitals. The REH designation provides an opportunity for Critical Access Hospitals (CAHs) and certain rural hospitals to avert potential closure and continue to provide essential services for the communities they serve.”

The proposed CoPs for REH providers were modeled closely after the CoPs for Critical Access Hospitals (CAHs) and in some instances CoPs for hospitals and ambulatory surgery centers (ASCs).

Per CMS, discussion of Medicare payment; quality reporting and enrollment policies are to be included in the calendar year (CY) 2023 Outpatient Prospective Payment System-Ambulatory Surgery Center (OPPS/ASC) proposed rule. The REH CoPs final rule is expected to be included in the CY 2023 OPPS/ASC final rule.

Definition for a Rural Emergency Hospital

REHs are defined as being “A facility that is enrolled in the Medicare program as an REH; does not provide any acute care inpatient services (other than post-REH, that is after discharge from an REH, or post-hospital extended care services furnished in a distinct part unit licensed as a skilled nursing facility (SNF)); has a transfer agreement in effect with a level I or level II trauma center; meets certain licensure requirements; meets requirements of a staffed emergency department; meets staff training and certification requirements established by the Secretary of the Department of Health and Human Services (the Secretary); and meets certain CoPs applicable to hospital emergency departments and CAHs with respect to emergency services.”

Fast Facts about REHs

  • To become an REH, a facility must have been a CAH or have been classified as a rural hospital with not more than 50 beds as of the date the Consolidated Appropriations Act (CAA) of 2021 was signed into law on December 27, 2020.
  • REHs are required to provide emergency department services and observation care. An REH can elect to add additional outpatient medical and health services.
  • An REH must have a staffed Emergency Department 24 hours a day, 7 days a week.
  • An REH must have a physician, nurse practitioner, clinical nurse specialist, or physician assistant available to furnish rural emergency hospital services in the facility 24 hours a day.
  • An REH can act as an originating site for telehealth services furnished on or after January 1, 2023.

REH Payment

REH providers will begin receiving payment for services furnished on or after January 1, 2023. Like other providers participating in Medicare, REHs must enter into a provider agreement with CMS. REHs will receive Medicare payment that is:

  • Equal to the amount of payment that would otherwise apply under the Medicare Hospital OPPS for covered outpatient department services increased by 5 percent.
  • In addition, an additional monthly facility payment to an REH. The details of the payment policies for REHs will be developed in separate notice and comment rulemaking.
  • The beneficiary co-payments for these services will be calculated the same way as under the OPPS for the service, excluding the 5 percent payment increase.

REHs Relationship with Hospitals

CMS notes that “hospital admissions and transfers account for roughly 20 percent of all patient dispositions from the emergency department across the U.S. As a result, we can expect that REHs will transfer at least 20 percent of their patients so we agree with commenters and are therefore proposing to require that REHs have established relationships with hospitals that have the resources and capacity available to deliver care that is beyond the scope of care delivered at the REH.”

Outpatient Surgical Procedures in an REH

CMS acknowledges there will be a need for outpatient surgical services in communities where CAHs convert to an REH. They have proposed “at § 485.524(d) to set forth standards for an REH performing outpatient surgical services that are consistent with the CAH requirements for surgical services at § 485.639. These include proposed standards for ensuring that the services are conducted in a safe manner by qualified practitioners with specific protocols for administering anesthesia.” They expect “REHs, like ASCs, to provide surgical services to patients not requiring hospitalization and in which the expected duration of services would not exceed 24 hours following an admission.”

Condition of Participation: Discharge Planning

The proposed Discharge Planning CoPs for REHs are closely aligned with the requirements for hospitals and CAHs.

Distinct Part SNF Unit

Per CMS, “According to a policy brief published by RUPRI Center for Rural Health Policy Analysis, there were 472 nursing home closures between 2008 and 2018 in nonmetropolitan counties in the U.S. The policy brief noted that 10.1 percent of the country’s nonmetropolitan counties had no nursing homes. Given the closures of rural nursing homes and the lack of nursing homes in rural communities, residents living in rural areas may not have adequate access to SNF services. The provision of these services in distinct part units of REHs may help address this access issue.”

A study by the consulting firm CLA’s study (“A Path Forward: CLA’s Simulations on Rural Emergency Hospital Designation”), estimates between 11 and 600 CAHs would benefit from conversion to REH status.

Critical Access Hospitals

This proposed rule also includes proposed updates to the CoPs for CAHs by proposing to:

  • Add a definition of primary roads to the location and distance requirements,
  • Establish a patient’s rights CoP, and
  • Allow for a unified and integrated systems for infection control and prevention and antibiotic stewardship program, medical staff, and quality assessment and performance improvement program (if the CAH is part of a health system containing more than one hospital or CAH).

I encourage you to read the proposed rule and submit comments. One important issue CMS is seeking input on is whether REHs should be permitted to provide low-risk labor and delivery, and whether they should require an REH also provide outpatient surgical services in the event surgical labor and delivery intervention is necessary. CMS is accepting comments through August 29, 2022.


Proposed Rule - Conditions of Participation for Rural Emergency Hospitals and Critical Access Hospital COP Updates (CMS-3419-P): (link)

Article Author: Beth Cobb, RN, BSN, ACM, CCDS
Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Analytics at Medical Management Plus, Inc. Beth has over twenty-five years of experience in healthcare including eleven years in Case Management at a large multi-facility health system. In her current position, Beth is a principle writer for MMP’s Wednesday@One weekly e-newsletter, an active member of our HIPAA Compliance Committee, MMP’s Education Department Program Director and co-developer of MMP’s proprietary Compliance Protection Assessment Tool.

This material was compiled to share information.  MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.