What changes when a small hospital becomes a rural emergency hospital

For a small rural hospital that is losing money, the choice used to be stark. Keep every service running and risk closing altogether, or shut the doors and leave the county without an emergency room.

Since January 2023 there has been a third option. Hospitals can convert to a new Medicare category called a rural emergency hospital. About 50 have done so, according to the National Rural Health Association.

What a rural emergency hospital is

Congress created the designation in a 2020 spending law, and it took effect at the start of 2023. Critical access hospitals and small rural hospitals with 50 or fewer beds were eligible to convert.

The trade is straightforward. A hospital that converts gives up its inpatient beds. In return it receives a fixed monthly payment from Medicare and higher Medicare rates for outpatient services.

To keep the designation, the hospital must run an emergency department around the clock, keep patients for an average of no more than 24 hours, and have a transfer agreement with a larger trauma center for patients who need more care. It can keep offering outpatient services such as lab work, imaging, infusions and clinic visits.

What patients keep

The most important thing is that the emergency room stays open. For someone having a heart attack, a stroke or a bad injury, the minutes saved by stabilizing them locally can matter a great deal.

Many converted hospitals also keep the services people use most often, like blood draws, X-rays and outpatient therapy, so routine care does not require a long drive.

What patients give up

Anyone who needs to be admitted, whether for pneumonia, after surgery or for a few days of observation that runs long, will be transferred to another hospital. For an older patient, that can mean recovering an hour or more from home, which is hard on spouses and families who want to visit.

Transfers also depend on ambulances, and in many rural areas ambulance service is stretched thin. A converted hospital is only as useful as the system that moves patients onward.

Rural health advocates have asked Congress to loosen some of the rules. Proposals would let these hospitals offer swing beds for short rehabilitation stays, allow certain specialty units, and let hospitals that already closed reopen under the new designation.

Questions to ask if your hospital is considering it

Conversion decisions are usually made by a hospital board, and many boards hold public meetings. If your local hospital is weighing the change, these are fair questions:

• Which services will stay, and which will end?
• Where will admitted patients be sent, and how far is it?
• Who will provide the ambulance transfers, and is that service adequately staffed?
• What happens to the staff, especially nurses who worked on the inpatient floor?
• Is the hospital financially stable enough to stay open as an emergency hospital, or is this a step toward closing?

A better outcome than closing

For some towns, a rural emergency hospital is a real loss compared with what they had. For others, it is the difference between keeping an emergency room and losing it. In either case, it helps to understand the trade before it is made, and to know where you will go if you need to be admitted.