Legislation aimed at boosting federal funding for rural hospitals zipped through the Arkansas Senate on Thursday.
The Senate voted 34-0 to send House Bill 1127, sponsored by Rep. Lee Johnson, R-Greenwood, to Gov. Sarah Huckabee Sanders.
The bill would allow hospitals to apply for the Rural Emergency Hospital designation that could bring in additional federal dollars and reduce costs.
The new designation would mean millions of federal dollars and higher reimbursement rates for Medicare, but designation as a Rural Emergency Hospital would mean having to drop almost all of their inpatient services -- such as childbirth, rehabilitation and complex surgeries -- to focus exclusively on emergency, observation and outpatient care.
Congress created the designation in 2020 to help fund rural hospitals that have shifted to more emergency and outpatient care while maintaining a token number of inpatient beds that are often empty and are a drag on the facilities' bottom lines.
Sen. Missy Irvin, R-Mountain View, said Thursday "this allows for those hospitals in very rural settings to choose their designation and, if they choose this designation, it allows them to do more outpatient care, but also not meet that high threshold requirement of having 50 hospital beds that they can't fill."
This designation would allow these hospitals to create a more stable budget and allow them to provide long-term care, mental health needs and other health care services, she told senators.
"This is a huge opportunity for the state of Arkansas and a lot of these small, rural hospitals," said Irvin, who is the Senate sponsor of HB1127.
"Having that presence is really a difference of life and death for a lot of folks in rural places," she said.
The designation is aimed at Critical Access Hospitals, a special category of rural healthcare facilities that provide emergency and limited inpatient care. Rural Health Initiative, a North Carolina non-profit, estimated that nine of the state's Critical Access Hospitals could benefit from applying for the new Rural Emergency Hospital designation.
"In the past, Medicare has forced hospitals to provide inpatient beds, even if they're rarely used," Bob Wilson, a co-founder of the Rural Healthcare Initiative, said in a recent news release. "That leads to financial losses that prevent hospitals from investing in services like maternal or behavioral health that might be more needed in their communities."
Information for this article was contributed by Neal Earley of the Arkansas Democrat-Gazette