Medicare Compliance Rac Oig

Medicare spells out proposed conditions of participation for rural emergency hospitals

July 5, 2022 2:59 pm
  • Proposed regulations define Medicare conditions of participation for rural emergency hospitals, which will be a new category of provider starting in 2023.
  • Staffing requirements would deviate from those for critical access hospitals in that REHs wouldn’t need to have a physician or advanced practitioner on-site at all times.

Seeking to offer a new option for struggling rural hospitals, CMS issued a proposed rule that establishes recommended regulations for the rural emergency hospital (REH) category.

In 2023, certain hospitals can designate themselves as REHs, meaning they would halt inpatient operations “and provide continued access to emergency services, observation care and additional medical and outpatient services,” according to a CMS news release. Eligibility for the designation is limited to critical access hospital (CAHs) or rural hospitals with 50 or fewer beds.

Background on the REH designation

The state of rural healthcare is considered dire. CMS notes that during a 12-year period ending in February 2022, 138 rural hospitals — including 44 CAHs — stopped providing inpatient services. Among that group, 75 closed completely.

“REHs are expected to help address the barriers in access to healthcare, particularly emergency services and other outpatient services that result from rural hospital closures, and by doing so, may help address observed inequities in healthcare in rural areas,” CMS states.

As established by December 2020 legislation, some of the general requirements for REHs include:

  • Not providing any acute care inpatient services aside from post-discharge care in a distinct unit licensed as a skilled nursing facility
  • Establishing a transfer agreement with a level I or level II trauma center (which can be out of state)
  • Limiting average duration per patient stay per year to no more than 24 hours

The time limit on stays may draw some concerns, but CMS said the issue should not be significant.

“We would expect an REH to transfer patients whom the REH determines require a higher level of care as soon as possible,” CMS states in the rule. “We do understand that there may be occasional circumstances in which a facility is not immediately available to provide a higher level of care, resulting in patients receiving services at the REH for more than 24 hours. However, we believe that this will occur at a frequency that will not seriously affect the REH’s average length of stay.”

The proposed regulations detail the Medicare conditions of participation (CoPs) for REHs. There’s a lot of crossover with the requirements that have been on the books for CAHs. Some highlights:

Telemedicine policies

REHs will be authorized as originating sites for the provision of telemedicine services. As with CAHs and other hospitals, an REH will have the option of implementing a streamlined credentialing and privileging process for practitioners who would provide telemedicine services to the REH’s patients.

Specifically, CMS proposes that REHs be allowed to establish agreements with a Medicare-participating hospital, and that the distant-site hospital be responsible for ensuring compliance with staff regulatory requirements.

Specific accountability standards would apply for agreements with both Medicare-participating hospitals and telemedicine-specific entities that might not participate in Medicare. In the case of the latter, more responsibility would fall on the REH to ensure compliance with Medicare CoPs.

Service availability

REHs would need to establish relationships with hospitals that “have the resources and capacity available to deliver care that is beyond the scope of care delivered at the REH,” with CMS noting that REHs would be projected to transfer at least 20% of their patients.

The proposed COPs describe the various services that REHs must provide. A few highlights:

Emergency services. An REH generally must comply with CAH emergency service requirements and “provide the emergency care necessary to meet the needs of its patients in accordance with acceptable standards of practice.”

Ancillary services. REHs must provide basic lab services that are essential to the immediate diagnosis and treatment of patients. REHs should consider going beyond CAH requirements for lab services, incorporating features such as a complete blood count, basic metabolic panel, cardiopulmonary tests and urine toxicology. Emergency diagnostic lab services would need to be available 24/7.

Radiologic service requirements generally would mirror those of hospitals and CAHs.

Outpatient services. REHs can provide outpatient radiology, lab, rehabilitation, surgical, maternal health and behavioral health services, among others, according to the proposed rule. Decisions on services should be based on a systematic health needs assessment.

Standards for outpatient surgical services would be consistent with those that apply to CAHs.

For maternal health services, CMS is seeking input as to whether REHs should be permitted to provide low-risk labor and delivery services and — when needed — surgical labor and delivery interventions on an outpatient basis.

Behavioral health services may include substance-use disorder services if they’re provided on an outpatient basis, according to the proposed rule.


CMS wrote that “many of the CAH staffing requirements are appropriate for application to REHs,” including that a registered nurse, clinical nurse specialist or licensed practical nurse be on duty whenever the REH has at least one patient receiving emergency services or under observation.

Unlike CAHs, however, REHs would not be required to ensure a physician or advanced practitioner is available to furnish patient care services at all times of operation. A physician or practitioner would need to be on call and immediately available by phone or radio contact, and able to be on-site within a specified time frame.

REHs would not need to have a board-certified emergency physician in the position of medical director but should have a physician in that role “if possible.”

Miscellaneous provisions

Infection prevention and control and antibiotic stewardship programs generally would have requirements similar to those for CAHs. Discharge planning requirements likewise would be similar.

Patients’ rights when receiving care in an REH would be codified by provisions that generally track those for other hospitals but would be “less prescriptive” in that REHs would have leeway to develop policies and procedures based on their scope of services and patient populations. For example, regulations about patient restraints and seclusion wouldn’t be as exacting because patients for whom such steps are required typically would be transferred to a higher level of care.

“We are specifically soliciting comments on the appropriateness of the patient’s rights requirements proposed for restraint and seclusion,” CMS wrote.

REHs would have to “develop, implement and maintain an effective, ongoing, REH-wide, data-driven” quality assessment and performance improvement program. CMS seeks comments about the feasibility of allowing REHs to participate in a unified program if they are part of a multifacility system.

Looking ahead

Payment and quality-reporting provisions for REHs will be specified in the hospital outpatient payment 2023 proposed rule, which likely will be released this month.

Comments on the proposed rule about CoPs are due by Aug. 29 and can be submitted at


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