Bass, Berry & Sims attorneys Justin Brown and Travis Lloyd outlined considerations for rural hospitals that are considering converting to a new Medicare provider type – the rural emergency hospital (REH) – in an article published by American Health Law Association (AHLA). The authors point out that, “Although the REH is not, and is not intended to be, a one-size-fits-all solution for the problems rural hospitals face, this new Medicare provider type does offer a targeted solution for small rural providers that cannot continue to operate a full-service hospital.”
The attorneys examine several key considerations for an entity contemplating conversion, such as “suitability of ceasing inpatient operations, complex financial analyses, potential state law constraints, and significant uncertainties.”
There are estimated to be around 1,700 rural hospitals that are eligible to convert to an REH. While many will choose not to convert, the authors note, “for those on the brink of closure due to low inpatient volume, the REH designation offers a potential lifeline. Even for those not facing imminent closure, the REH may offer a more financially sustainable model that not only preserves but also expands access to important outpatient services.”
The full article, “Rural Emergency Hospitals: A New Provider Type Designed to Preserve Access to Outpatient Care in Rural Areas,” was published in the February 2023 issue of AHLA’s Health Law Connections magazine and is available online (subscription required).