The Rural Emergency Hospital (REH) is a new provider type, designed by the Centers for Medicare & Medicaid Services (CMS) to reduce the number of rural hospital closures through innovative payment reform and prioritizing close alignment between outpatient services and rural community healthcare needs. The REH designation is the first new rural provider type since the critical access hospital (CAH) was established in 1997. The policies governing the REH were published in the 2023 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center final rule on November 23, 2022.

Technical Assistance Sources

REH Technical Assistance Center (REH-TAC) | Rural Health Redesign Center

Montana Health Research & Education Foundation | Montana Hospital Association

The REH model was developed to address 3 primary issues:

• • Reduce the increasing problem of rural hospital closures.
  • Allow for continued access to primary health care services for rural/frontier communities.
  • Assure continued health equity for rural/frontier residents.

The major provisions of the REH model are:

• • Available to rural hospitals with not more than 50 beds and CAHs enrolled in the Medicare program as of December 27, 2020. (Consolidated Appropriations Act Date).
  • Must apply for enrollment in the Medicare program. (Medicaid Providers must enter into provider agreements with State Medicaid agencies).
  • Must provide emergency department services and observation care 24/7/365.
  • May elect to provide certain other outpatient services (maximum flexibility from CMS).
  • Cannot provide inpatient services and observation LOS must average less than 24 hours annually.
  • May operate a distinct part skilled nursing facility (no swing beds).
  • Must have a transfer agreement with Level 1 or 2 trauma center.
  • All REHs will receive an additional facility payment (AFP) annually. The initial AFP is $ 3.2 million. Following the first year, the AFP will be modified according to market basket increases. Applications must include a work plan for the AFP.
  • Hospitals that convert to REH can, if they wish, return to their previous CAH status, unless they received their designation as a “necessary provider” in which case they would no longer meet traditional CAH eligibility criteria.

Rural Emergency Hospital Frequently Asked Questions
Compiled January 2023 by the Rural Health Redesign Center (RHRC).

Summary of Legislation Related to Rural Emergency Hospitals (REH)

Guidance for Rural Emergency Hospital Provisions, Conversion Process and Conditions of Participation | CMS
CMS Memo QSO-23-07-REH dated January 26, 2023 provides guidance for Rural Emergency Hospital provisions, conversion process and conditions of participation.

House Bill 312 | Montana State Legislature
Full text of House Bill No. 312 passed by the 2023 Montana Legislature, allowing for Rural Emergency Hospital designation in Montana.

For more information and assistance in accessing resources, please contact:

Jack King
Finance & Operations Program Specialist
[email protected]
406-457-8016