Many in the legal profession have turned their attention to a strategic move by the Centers for Medicare & Medicaid (“CMS”) of the Department of Health and Human Services, which aims to aid rural and critical access hospitals (“CAHs”). On December 27, 2020, CMS established a new provider category: the Rural Emergency Hospital (“REH”). This new categorization could offer a lifeline for financially struggling rural hospitals, a topic that has largely flown under the radar in legal circles until now.
Our understanding of the REH designation is that it permits a suspension of a hospital’s inpatient operations, while keeping emergency department and outpatient services intact. This would conceivably enable many rural hospitals to discontinue inpatient operations that are no longer financially viable, a move that can be seen as a potential game changer in rural healthcare. Butler Snow LLP provides further insight into the implications of this policy shift.
The implications of the REH designation for rural healthcare are profound, especially seen from a legal perspective. Many rural hospitals have been struggling under the financial burden of maintaining full healthcare services, including inpatient operations which often run at a loss. This crisis has escalated to the point where some hospitals are barely able to keep their doors open.
The designation as an REH seems to be a timely response from CMS to support these hospitals. This move could potentially transform the way healthcare is delivered in rural regions, bringing a much-needed sense of relief for these struggling institutions, while ensuring continuity of patient care.
With legal professionals working within the healthcare sector inevitably impacted by the ripple effects of this move, it will be of interest to keep an eye on how these changes are implemented and affect the landscape of healthcare legal structures and compliance. With ongoing shifts in the sector expected, legal professionals working within the industry will need to stay abreast of developments and the associated implications. As this is a complex and evolving situation, it will remain a topic of keen interest to the corporate legal world.