CMS Finalizes Rural Emergency Hospital (REH) Rules For January 1st Implementation

On November 1st,  the Centers for Medicare and Medicaid Services (CMS) released the calendar year (CY) 2023 Hospital Outpatient Prospective Payment System final rule. This rule also finalized policies for the new Medicare enrollment designation of Rural Emergency Hospitals (REHs), which were authorized under law to be eligible for Medicare payments beginning on January 1, 2023. Here are the key takeaways from the finalized provisions related to REHs:

  • CMS Finalized Provisions from 2 Separate Proposed Rules: The proposed rules for REHs were released in two parts: (1) a standalone proposed rule to set the Conditions of Participation (CoPs) for REHs; and (2) in the CY 2023 OPPS proposed rule where CMS laid out its proposed policies for payment, enrollment, and quality reporting. In this OPPS final rule, CMS finalized provisions for both the CoPs as well as the proposals from the OPPS proposed rule.
  • CMS Replied to EDPMA Request For Clarification on Closed CAHs/Rural Hospitals That Would Otherwise Be Eligible to Enroll as an REH. One of the statutory criteria for a facility to be eligible to convert to an REH sets out that the facility must have been a critical access hospital (CAH) or a rural hospital with not more than 50 beds as of December 27, 2020. EDPMA sought clarification about CAH/rural hospitals in existence as of December 27, 2020 but that subsequently closed.  In response to our requests, CMS clarified that “facilities that were CAHs or rural hospitals with not more than 50 beds as of the date of enactment of the CAA and then subsequently closed after that date, would be eligible to seek REH designation after the closure of the facility.”
  • CMS Encourages Presence of Emergency-Trained Personnel. As part of the final CoPs related to staffing and emergency services. CMS continued to state that it wanted to proceed cautiously given workforce concerns and provide REHs with the flexibility to staff the facility as appropriate for that facility’s setting. However, in response to requests for requirements that there be some emergency medicine expertise, CMS will require that “the REH be staffed at all times by an individual who is competent in the skills needed to address emergency medical care. The individual must be able to receive patients and activate the appropriate medical resources to meet the care needed by the patient.” CMS also states that it will require that the “individual has the ability to effectively communicate information regarding the condition of patients presenting to the emergency department for treatment to the physician or other practitioner notified of the patient’s arrival.” In addition, under the final CoP requiring a Quality Assessment & Performance Improvement Program (QAPI) Program, CMS also added that an REH must “specifically measure, analyze, and track staffing as a quality indicator.”
  • CMS Reverses Course on creation of new REH Stark Exception. CMS did not finalize the creation of a new specific “REH Exception” to the physician-self referral prohibition, which would have allowed physician ownership and investment in REHs, due to stakeholder concerns. CMS reminds stakeholders, however, that for REHs located in rural areas, the “Rural Provider Exception” is available.
  • CMS Lays Out REH Quality Reporting Program Framework But No Immediate Reporting Requirements Finalized. With regard to the REH Quality Reporting Program (REHQR), CMS sought feedback on potential measures and criteria for measure selection that it could adopt in the future. While CMS discusses some of this feedback, it did not finalize the use of any specific measures, which means that quality reporting will almost certainly not begin in 2023. However, CMS did finalize that for REHs to participate in the REHQR Program, they must 1) have an account for the purpose of submitting data to the Hospital Quality Reporting (HQR) system and 2) designate a Security Official (SO).