Rural emergency hospitals qualify for more Medicare funds under new state, federal laws

Corey Simon takes the school choice banner, and runs with it.

Florida is the 16th state to tap into a new federal law authorizing the establishment of “rural emergency hospitals” (REH) and increasing Medicare payments that flow to those facilities.

Gov. Ron DeSantis recently signed a batch of nine new measures. One of those was SB 644, sponsored by Republican Sen. Corey Simon. It takes effect July 1.

The new law is meant to help abate a rash of hospital closures and to take advantage of increased Medicare payments to rural hospitals as a means to keep them afloat.

Specifically, REHs would be paid for services at an amount that is equal to the amount that would be paid to a hospital for providing the equivalent outpatient service, plus an additional 5%.

Additionally, an REH will receive a monthly facility payment of $272,866 from the Medicare program until Oct. 1, 2024, after which the amount will be $267,408.68. In future years, the payment will increase by the hospital market basket percentage.

The REH designation was included in the federal Consolidated Appropriations Act of 2021 as a way to abate the rash of rural hospital closures nationwide.

The 2021 law created REHs. The Joe Biden administration’s rules subsequently required REHs to operate for the purpose of providing emergency department services, observational care and other outpatient medical and health services in which the annual per-patient average length of stay does not exceed 24 hours.

Under federal rules, only rural hospitals with 50 or fewer beds and critical access hospitals that were enrolled and certified to participate in Medicare on or before Dec. 7, 2020, can qualify for the REH certification.

There were 22 licensed rural hospitals in Florida as of January. According to a legislative staff analysis, three rural hospitals have closed in Florida over a 14-year period: Healthmark Regional Medical Center in DeFuniak Springs, Regional General Hospital in Williston and Shands Lake Shore Regional Medical Center in Lake City.

Fifteen states authorize REHs, including Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Montana, Nebraska, Nevada, New Mexico, New York, Oklahoma, South Dakota, Texas and West Virginia.