New federal model for rural hospitals could help some of them stay afloat, but it could take a while to catch on

Last year Congress passed a measure to help rural hospitals stay afloat, and now they're urging the Biden administration to implement it.

Rural hospitals have been struggling financially for years, with more than 130 closing since 2010. "Those closures have devastated local communities, resulting in long drives for emergency care, worse health outcomes for residents and job losses for the surrounding area," reports Alexandra Ellerbeck of The Washington Post. "An influx of federal aid to rural hospitals during the pandemic has not been enough to halt the trend. Last year was a record year for closures, even as rural communities relied on their hospitals more than ever for Covid-19 care and vaccination outreach."

Surviving rural hospitals rely on Medicare reimbursements, but in order to receive it they must maintain expensive inpatient beds so they can still be classified as hospitals, Ellerbeck reports. But many rural hospitals don't need the beds, since locals tend to go to bigger, urban hospitals for inpatient procedures. The average rural hospital makes about 80 percent of its patient revenue from outpatient procedures.

That's where the new measure comes in, which establishes a new category called the rural emergency hospital. "The new model, which will go into effect in 2023, is aimed at maintaining at least some access to care, especially in places where the local hospital might otherwise close," Ellerbeck reports. "It will allow existing small rural hospitals and critical access hospitals to forgo inpatient care and convert into a new type of stand-alone emergency room and outpatient service center that can quickly transfer patients, if needed, to the closest trauma centers."

Earlier this month, the program's sponsor, Sen. Chuck Grassley, R-Iowa, and Sen. Amy Klobuchar, D-Minn., sent an open letter to the administrator of the Centers for Medicare & Medicaid Services, asking that she spearhead the implementation of the new measure as soon as possible.

Some hospital administrators told Ellerbeck they aren't sure the new model is generous enough to be worth it, since converting has costs. The new model could help rural hospitals, though, said George Pink, a rural health expert at the University of North Carolina. He told Ellerbeck it adds a middle ground between inpatient hospitals and primary-care facilities. 

About 68 hospitals in the U.S. would likely convert to the new model, but it could take a while for the notion to catch on, according to preliminary research from Pink and other UNC researchers. "Brock Slabach, of the National Rural Health Association, said that rural emergency hospitals may come to play a bigger role over the long-term," Ellerbeck reports. "The last time Congress created a new category for rural health care, with critical access hospitals in 1997, few hospitals adopted the new designation right off the bat. Now, there are 1,300."