In 2020, Congress acted to prevent any more loss of essential health care services in rural areas by creating a new designation: Rural Emergency Hospitals (REHs). REHs became official on January 1, 2023. Since then, a growing number of rural care providers have voluntarily converted to this category. In this discussion, two rural health care leaders assess how the conversion to Rural Emergency Hospital is proceeding, and how to build trust and buy-in from patients and communities. 

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Tom Haederle

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Tom Haederle

it's a significant change, one that has patients asking, what does this mean for me and my community?

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Tom Haederle

Welcome to Advancing Health, a podcast from the American Hospital Association. I'm Tom Haederle with AHA communications. In this podcast, we hear from two rural health care leaders who assess how the conversion to rural emergency hospital status is going so far. We learn about the progress REHs are making as a new model for payment and delivery of care, and gain insights on how leaders can build trust and buy in from patients and communities

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Tom Haederle

that conversion to this still new category is a good thing.

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John Supplitt

Good day. I'm John Supplitt, senior director of AHA Rural Health Services. And joining me is Christina Campos, CEO of Guadalupe County Hospital in Santa Rosa, New Mexico. And Rich Rasmussen, CEO of Oklahoma Hospital Association. We're here to discuss rural emergency hospitals and its progress as a new model of payment and delivery. Welcome, Christina. Welcome, Rich. The Rural Emergency Hospital is a new Medicare provider type created to address the growing concern over rural hospital closures.

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John Supplitt

The goal of this new designation is to provide a means to preserve access to essential services for rural residents, and to decrease the likelihood of hospital closures. You each bring a unique and important perspective to the formation of rural emergency hospitals, and I will ask you to share the experience that you have had over the past several months.

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John Supplitt

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John Supplitt

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Christina Campos

We did a lot of work in advance with our county commission and with our hospital board to ensure that the conversion was almost invisible to the community. The quality of care did not change. The patterns of care did not change. So the community has kind of been quiet about the whole thing. They're just seeing it as trusting that this is a change that we made to be able to ensure the sustainability long term for the hospital.

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Christina Campos

The employees were educated, the providers were educated. So we've just had a ton of support, a lot of curiosity. At times there have been some questions: does this change? How do we keep how we keep them? Not necessarily, but it really does change the need for a lot of conversations about patient care on a day-to-day basis.

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John Supplitt

So your experience is that it's been largely seamless in terms of the introduction. But you also mentioned there's been a lot of communication that had to be part of the upfront work.

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Christina Campos

Yeah, it really does. I think what's really important is to have a trust already within the community. Trust - if you're a government entity, you have to have a lot of trust with your county commissioners or your city council. Your providers have to trust that you know what you're doing, and it's something that you have to have built up well in advance of making this big of a change so that when you're bringing it forward, they already know that you have done the legwork, that you have done the math.

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Christina Campos

And this is something that is well planned for, well thought out and not just a reflex to a situation that might be happening at that time.

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John Supplitt

Right. I understand, that's very good. Let's talk about planning, but let's talk about the planning that takes place from the bureaucratic perspective. There's a lot of planning that went into your application to convert to a rural emergency hospital. You had to provide an action plan that had a description of the services and staffing. You had to have a transfer agreement with either a level one or level two trauma center.

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John Supplitt

And then you had to attest for meeting rural emergency hospital conditions of participation. Share with us how the application process worked for you.

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Christina Campos

So the application process really isn't that difficult. But what's really interesting is I had done a lot of education to my colleagues throughout the state of New Mexico Hospital Association, so they knew that we were applying for this REH designation already. And after one of our finance calls for the association, the CEO of the level one trauma center in Albuquerque emailed me and said, hey, Christina, how can we help you?

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Christina Campos

So I didn't have to ask them for a transfer agreement. We already had one in place, but it was antique. It was already like in sepia, probably typewritten on a typewriter, but we updated it. And so they were our first. And then we also went with one of the level two trauma centers. Another colleague of mine that reached out and said, we want to help.

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Christina Campos

We want to be available to you. What's interesting is even though you have these transfer agreements, it doesn't mean you have to transfer it to them. You just have to have those in place. Then on the action plan, we really did a skinny action plan. We just said, this is what we're offering. This is what we're going to continue to offer.

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Christina Campos

Obviously we won't have inpatient beds. And then these are the programs that we will anticipate researching to see if they make sense to add on to our community. So it wasn't really detailed, but we were meeting all the criteria. And I think what really helped me a lot as I was going off of the test was recommendations from ensuring access for vulnerable communities that the AHA developed.

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Christina Campos

That I knew that there were certain things that we do want to look at offering in our community, but we are going to offer high quality emergency care diagnostics, including lab and X-ray, and then we're going to expand into these other programs. So it wasn't a really heavy lift for us.

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John Supplitt

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Christina Campos

It's relevant.

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John Supplitt

Yeah, it's still relevant. What about the challenges that you countered in the conversion towards a rural emergency hospital?

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Christina Campos

Ours turned out to be kind of like a backwards conversion. It did not go incredibly smoothly. Part of it is that we were so eager to do it. Reached out to our Secretary of Health and our director of regulation licensing, and they said, hurry up and apply. Go ahead and go through the Pecos system and apply. And we did.

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Christina Campos

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Christina Campos

Now, I argued that critical access hospitals is not written in statute. Why doesn't REH have to be written in statute? But that's what they wanted. So then it was you're going to hear the trend of education and communication. I had to educate the legislators. I had to have the governor on my side to make sure the bill was passed.

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Christina Campos

They did not put an emergency clause into it, so it did not go into effect immediately. It did not go into effect until June 16th, two weeks before the end of the fiscal year. But I had already applied to CMS. They had already approved the process. And then when it took so long, my application expired. And then it was a question as did I have to ask for an appeal or reconsideration.

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Christina Campos

They didn't know how to handle it. My state didn't know how to handle it, and so it just dragged on until I was able to bring together the Dallas director of CMS with my Secretary of Health and all of the people that were working on this. And then there were many other people through CMS that were working on the project and just trying to understand it.

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Christina Campos

We were literally building the plane as we were flying it. That meeting, we were able to get everybody to the table, agree on what needed to be done. Everybody wanted the same thing. They just didn't agree on how to get there. And at that meeting, they came to a conclusion and picked a date, made it September 1st and it was a little bit retroactive.

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Christina Campos

We got our license from the state immediately. There's still other conversions stuff that's going on, but I think we'll get into that in a little bit.

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John Supplitt

Yeah, a little bit. But I guess when we're listening to your story, what we're hearing is that it takes a champion. You build on the relationships that are there and you have to be persistent.

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Christina Campos

Incredibly persistent.

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John Supplitt

Well, thanks very much. Rich, let's turn it over to you and get you into this conversation for this model to take effect. As Christina has mentioned, states have to have in place legislation that will allow the licensing, certification and then payment of a new provider type and service. But Oklahoma was among the first states to pass enabling legislation. Share with us why this is a priority for your state and how it came to pass.

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Rich Rasmussen

Well, thanks, John. It's a great question. I think the big challenge that we experienced in Oklahoma is that we have a large number of rural hospitals PPS that aren't eligible for conversion to critical access. Now, certainly, Congress has some legislation in front of it that can make that easier, allow that to take place again. And so the membership stepped back and said, what can we do to provide some level of support that will allow these facilities to stay in service in serving their communities?

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Rich Rasmussen

When the REH opportunity presented itself, the membership quickly jumped on it. The association passed legislation with the full expectation that we would have conversions, and I believe we had the first one in the nation, I think, in Oklahoma. And, you know, that one was then quickly followed by the second one, and now we've had our third conversion that took place this fall.

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Rich Rasmussen

And so for the Perry Hospital, there's no way they could have survived. Along with their sister hospital as well in Blackwell. Had they not had this opportunity, they probably would have been forced into a position to close, or the mothership of the hospital system would have to step back and look at how they could perhaps salvage one of them.

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Rich Rasmussen

And this created that lifeline. And I think the moral of the story is, is that to prospective payment hospitals, you would have never thought that. I think most of us, you know, when we looked at, you know, the REH opportunity, we thought it would be critical access hospitals and it really wasn't. And in for the state of Oklahoma, we have several others that are evaluating it just for that very reason, because there's no other way they can survive and continue to support their community.

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John Supplitt

Christina was referring to the conversation she had with the New Mexico State Legislature, and how they weren't prepared at the moment. Even though they encouraged you to do it. You had to have had some similar experience in Oklahoma, in the sense that in order to get that legislation passed, you had to have a pretty confident and aware legislature that knew the problems that were confronting some of the rural hospitals in order to respond.

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Rich Rasmussen

Oh, absolutely. In Oklahoma, there is a real sense of obligation to ensure that hospitals not only survive, but truly have the opportunity to be successful in serving their communities. And lawmakers also understand that real difficult position that these rural PPS hospitals find themselves in. So it wasn't a heavy lift to get them to agree to do that. They very much wanted to be successful.

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Rich Rasmussen

And this is a state that by initiative had passed Medicaid expansion. So you had the public was leaning in on this issue and then you had lawmakers are leaning right in behind it to make sure that the health care system in the state would not only survive, but thrive. And I think that was part of the impetus behind the legislation moving quickly.

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John Supplitt

There's a lesson there, too, and in the sense that when the community and in this case, the larger community of the state is behind the initiative, it can happen and happen quickly and effectively.

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Rich Rasmussen

Oh, absolutely. And without it, you know, you have communities that, like we see in most of the Midwest, the Mountain West, where folks are traveling hours to get to the next facility. And when you're talking about in Oklahoma, where you have a large agriculture community and a large energy sector as well, accidents do happen. And people have seen that happen to their family members, and they could go to the local hospital.

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Rich Rasmussen

The thought of losing that really helped drive the whole narrative around the importance of making sure that we have something in the RH provided that model.

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John Supplitt

Excellent, excellent. Let's talk, Christina, about your experience since converting. Payment has been a major focus of providers and policymakers regarding the viability of rural emergency hospitals. You are no longer eligible. In your case, you never received 340B, and swing beds aren't an option under the model you receive, and an additional 5% over the payment rate for hospital outpatient pays.

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John Supplitt

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Christina Campos

It is sufficient for us. What we did was the math early on. When we were talking about this type of a program with a base payment, kind of similar to a utility model, that you're going to get a base payment for having your ear open. It was intriguing, and I think at the very beginning they were talking more in generalities.

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Christina Campos

They weren't being specific about the amount. And then that 5% add on. Well, as a PPS we were getting...as a sole community hospital, we were getting a 7.5% add on. So it's not a bump up. It's a tiny bit of a shaving. And I wasn't really attracted to the program at all until two things happen. Number one, our surveyors came in and said, you don't qualify as a PPS.

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Christina Campos

You don't have a high enough census to be a PPS hospital. So we knew we had to do something. Critical access; the math just really didn't work because our sole hospital rate was very generous. It was above cost, so we knew critical access just really wasn't a saving grace for us. When they finally came out with that amount, the 276,000 per month

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Christina Campos

and we did the math really quickly to see what we were going to give up. How many admissions are we having? Even if we got reimbursed at our high sole community hospital rate? Is that more or less? That was less. The 3.279 million overall for the year was a lot better for us. So the math has to be very important.

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Christina Campos

And I think the other thing that was really important is analyzing the needs of the community. You know, we've talked about what does our community actually need while not being able to have inpatient care. It can sometimes can be difficult on a family because they have to drive. It's not life saving care that you have to have in the community.

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Christina Campos

We needed to have emergency services in the community to keep people alive, to be able to get them to other hospitals. And we found also that through the years, through our quality initiatives, our lengths of stay often don't meet that second midnight. People resolve very quickly on modern antibiotics. So we were already struggling to keep them and to get paid for the inpatient stay without them denying it and then having to rebuild as an OBS.

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Christina Campos

So it just really suits the way we work.

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John Supplitt

Let's talk about quality, safety and the patient focused care. Among the requirements that CMS expects is a quality assessment and performance improvement program. Did you see any challenges in meeting these requirements upon conversion to a rural emergency hospital?

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Christina Campos

None at all, because we were already having to meet conditions of participation for PPS, which are stricter than for a critical access hospital. They're a little bit different. We're finding some subtle differences in having to pivot a tiny bit, but if you can meet the conditions of participation and of quality that you had as a PPS or as a CAH, there's absolutely no reason why you're not going to meet the conditions and the quality metrics as an REH.

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John Supplitt

Great. Thanks very much. Rich, going back to you. Given the early experiences in your state, do you see rural emergency hospital model expanding in Oklahoma?

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Rich Rasmussen

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Rich Rasmussen

But short of that, you know, it's hard to get something passed through Congress. So short of that, this is the only lifeline that we can throw some of these communities. I fully expect that beyond the one that I'm aware of right now, there are others that are exploring the option.

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John Supplitt

Well, then what could make this model work for rural hospitals in Oklahoma?

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Rich Rasmussen

Well, I think we got part of the apple. I mean, there were some things that most expected would have been part of this package. So allowing REH's to have 340B access to medications. And certainly that part dramatically would help serve communities. Also looking at some type of cost based reimbursement for rural EMS, that's a real challenge that we have as well, that we oftentimes forget about. You know, the swing bed challenge...

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Rich Rasmussen

I mean, most of the hospitals that have stepped back and trying to analyze whether they do it or not, was the question of losing that cost based reimbursement for swing beds. And I think if we could fix some of those and maybe we can look at too at some of the issues around distinct park units within these facilities as well, because if we look at behavioral health alone, there's nobody immune from the behavioral health challenges that we have in this country.

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Rich Rasmussen

And it's in every stretch of our communities. And so to ensure that we could have a model that not only survives but thrives in these rural communities, I think that's something for Congress to look at. It does not appear that CMS can allow any of these things happen without a statutory change. So I think there's an opportunity for a glitch bill to make the REH even much more effective.

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John Supplitt

Let's touch on commercial insurers. We've talked about Medicare and Medicaid, but what's been the response from commercial insurers in terms of this new model of payment and delivery?

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Christina Campos

There's such a lack of understanding about REH, and are you a hospital or you're a clinic? We're not a clinic or a hospital. They never heard the definition. They have no idea what it is. So a lot of our contracts with commercials, we kept exactly the same on the outpatient side for ER services or OBS, but we are at least trying to reach out to them to educate them on the new designation.

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Christina Campos

There were issues around the taxonomy number that, you know, we kept the same, NPI, so that wasn't the issue. But there is no taxonomy for REH yet that I know of. So we're using an old taxonomy number for rural provider. Where we have seen some challenges is around Medicaid. That it shouldn't be a problem. Some states today have been approved their waiver or their SPA has been approved quite easily to extend their OPPS payments to the REH that they already had in place as a subcommittee provider.

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Christina Campos

But right now, we're just trying to iron their out to make sure, because it's not just the payment. The base payment is the Medicaid supplemental payments that if a hospital loses them, would be just very difficult to overcome.

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John Supplitt

Yeah. Rich, your thoughts?

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Rich Rasmussen

We're fortunate that two of our conversions are tied to larger systems. And so you have the strength of that system and working with payers. But I do think those that are exploring this, that's certainly something to take into consideration. I do know that, you know, we still struggle even with the REHs is like the rest of the nation on the Medicare Advantage plans.

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Rich Rasmussen

So that's something we're gonna have to continue to work on. But I did pick up from one of the conversations from one of our administrators, or one of our REHs had indicated that they will receive or they did receive new CCN numbers, and they had to attach those to their REHs. So for those who are considering this, making sure that you do all of this, you know, work at ahead of time, you just kind of like a tabletop.

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Rich Rasmussen

What do we need to do? And if you need to bring in some consultants to help you, I know there are a number of them that are out there, but making sure you get it all right because you can't afford to have some of these things disconnected. And I say that because our first REH that did this because they were either first or very close to the first to the with CMS on this, they were approved very early on, I believe it was in April of last year and they didn't get paid till September by CMS.

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Rich Rasmussen

My understanding CMS has gotten better on this. So it was just kind of a learning curve for everyone. But for a small community where you're vulnerable financially, making sure you have all of this played out ahead of time, I think is going to be very important.

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John Supplitt

Well, there's much to learn. I think we've learned a great deal in the process that's gone by so far. The interest continues to build, whether the consultants agree or not, that interest is continuing to build. And there's been a lot of momentum. And I think as we see some of the tweaks to the legislation, that momentum is going to continue to grow.

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John Supplitt

I want to thank my guests, Christina Campos, CEO of Guadalupe County Hospital in Santa Rosa, New Mexico, and Rich Rasmussen, CEO of Oklahoma Hospital Association. Your perspectives on rural emergency hospitals as a new model of payment and delivery are greatly appreciated. And as this model continues to evolve, we'll be looking to you and your colleagues for continued insights into what works and how we can make this model better for patients, hospitals, and the communities we serve.

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John Supplitt

I'm John Supplitt, senior director of Rural Health Services. Thank you for listening. This has been an Advancing Health podcast from the American Hospital Association.

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Tom Haederle

Thanks for listening to Advancing Health. Please subscribe and write us five stars on Apple Podcasts, Spotify, or wherever you get your podcasts.