Bass, Berry & Sims attorney Travis Lloyd provided insight on the new Medicare payment model for rural emergency hospitals and why many rural hospitals have opted not to take advantage of it. The new payment model was signed into law in late 2020 and was fleshed out in regulations that were finalized in November 2022. The law is intended to stem the tide of rural hospital closures. However, the stipulations for adoption – including the elimination of inpatient beds and the loss of various payment incentives – do not make financial sense for many rural hospitals.

“The final version of the legislation offers a lifeline for a very limited class of hospitals,” said Travis. “It is not the broad-based antidote that rural hospitals need to alter the trajectory of closures.”

Outside of the financial burden required to transition to the new model, Travis said there are other factors for consideration. “There’s also the emotional reaction that hospitals face when they stop providing inpatient care. Those are big factors as to why I haven’t seen a lot of activity and interest.”

The full article, “For Many Rural Hospitals, New Payment Model Doesn’t Add Up,” was published by Modern Healthcare on January 16 and is available online (subscription required).