New Rural Designation – Rural Emergency Hospital

Hospital survival and closures are unfortunately becoming common news headlines. When closures occur in a rural community, there is usually not another option for receiving critical healthcare services to Americans living in those communities. Challenges in providing healthcare to rural communities is not a new problem but has been exasperated with rising costs and lower reimbursement.

Congress established the Rural Emergency Hospital (REH) designation as part of the Consolidated Appropriations Act (2021) in response to rural hospital closures. The new designation was available to eligible facilities as of January 1, 2023. The intent of the new provider designation is to maintain outpatient services (including emergency and observation services) in rural communities where supporting a Critical Access Hospital (CAH) or small rural PPS hospital is not sustainable.

A REH would be reimbursed from Medicare with an enhanced Outpatient Prospective Payment System (OPPS) rate and a monthly facility payment. Each state also needs to accept the new REH designation and establish their payment rates. Rural Emergency Hospitals are not eligible to participate in the 340B program.

There are several factors, financial and clinical, to consider when determining if converting to a REH is advantageous for your community. Be sure to consider all factors and consult with a professional to perform an analysis before deciding which provider type is best for your rural community.

Thank you to all rural healthcare providers for your challenging role in providing essential and accessible healthcare services to rural Americans.

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Caren Puvalowski, CHFP is the Rural Healthcare Reimbursement Manager for The Rybar Group. She offers expertise in the area of Rural Hospital financial, accounting, revenue cycle, and reimbursement experience. Her hands-on experience working in a variety of roles in the finance departments of CAHs, including multiple years as a Chief Financial Officer, allows her to identify both present and future reimbursement and payment opportunities.

Reach out to Caren for more information regarding cost report and other reimbursement opportunities for CAH. She can be reached at 810-853-6185 or via email at cpuvalowski@therybargroup.com. 

Focusing exclusively in the healthcare arena, The Rybar Group brings in-depth industry knowledge to help clients create solutions designed to identify opportunities for revenue generation, isolate root causes for underperformance, accelerate cash in the door and support long-term margin improvement. The Rybar Group does not dabble in reimbursement and revenue cycle solutions; we specialize in it.