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Lawmakers OK emergency rule to help Arkansas’ rural hospitals access new federal funding

They qualify for U.S. cash with emergency designation by Neal Earley | May 19, 2023 at 3:49 a.m.
One of the emergency rooms at Ozarks Community Hospital of Gravette is shown in this February 2008 file photo. (Arkansas Democrat-Gazette file photo)

State lawmakers signed off on an emergency rule Thursday that will allow rural hospitals to access a new pot of federal funding.

The regulation will allow financially strapped facilities to apply for a Rural Emergency Hospital designation that will open the facilities up to millions of dollars in federal assistance and higher Medicare reimbursement rates. The regulation is an emergency rule, meaning it will take effect after the Arkansas Legislative Council meets today.

The General Assembly approved legislation in February enabling the state Department of Health to begin work on the regulation that will allow hospitals to apply for the new status. The designation is open to small, rural health care facilities that provide mostly outpatient and emergency care. In exchange, facilities that receive licensure as a Rural Emergency Hospital will have to drop most kinds of inpatient care.

Thirty-eight hospitals in Arkansas will be eligible to apply for the Rural Emergency Hospital designation, according to the Arkansas Department of Health. While the Arkansas Legislative Council Executive Subcommittee approved the emergency rule Thursday, the state Board of Health approved a permanent rule in April that will have to go through a public comment process before it can take effect. The emergency rule lawmakers approved Thursday will last 120 days.

Approval for the emergency rules comes after lawmakers passed House Bill 1127, now Act 59, in February, clearing the way for the Department of Health to establish rules for hospitals applying for the designation. Rep. Lee Johnson, sponsor of the law, said in February the new designation is a sign of the changing landscape in rural medicine with hospitals focused more on emergency and outpatient services.

Hospitals that qualify for Rural Emergency Hospital licensure will be reimbursed an additional 5% for Medicare outpatient services and $272,866 in monthly payments for facilities in 2023, and the chance for more funds in 2024, according to the Centers for Medicare and Medicaid Services.

The state's 29 Critical Access Hospitals -- facilities that provide emergency and limited inpatient care -- are eligible to make the switch to the Emergency Rural Hospital designation. Additionally, there are nine rural hospitals with 50 or fewer beds in Arkansas that also can apply for the designation, according to Laura Shue, general counsel for the Arkansas Department of Health.

Some rural hospitals could benefit by ending most of their inpatient services, as overnight hospital treatment often requires specialists who are mostly found at larger, urban hospitals, Johnson, a Republican from Greenwood, said on the House floor in February.

More rural hospitals have gradually shifted to providing less inpatient care, directing patients in need of overnight care or surgery to larger hospitals in Little Rock, Fayetteville, Pine Bluff or Fort Smith for treatment, according to Johnson.

Print Headline: State approval opens funding to 38 hospitals


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