CMS Seeks Comments on Requirements for Rural Emergency Hospitals as a New Medicare Provider Category - McDermott Will & Emery

CMS Seeks Comments on Requirements for Rural Emergency Hospitals as a New Medicare Provider Category


In Depth


Under current Medicare program rules, Medicare does not recognize “freestanding emergency departments” or other non-hospital providers of emergency department services. Medicare will only pay for these services at facilities that meet the Medicare definition of “hospital,” which requires the provision of inpatient services, among other requirements that are often difficult for low-volume facilities to meet. This limitation has presented particular challenges for rural communities, where there may be insufficient patient volume or resources to support inpatient services, but where access to emergency services and higher-level outpatient services is still necessary and may otherwise require travel to distant communities.

Congress established REHs in the Consolidated Appropriations Act of 2021 to help address this gap in Medicare rules. While the new statutory provision provides a detailed framework for the REH provider type, key details of REH services and participation requirements were left to CMS to develop through regulations and guidance. In connection with the 2022 Hospital Outpatient Prospective Payment System, CMS issued a request for information focusing on the health and safety standards, quality measures and reporting requirements, and payment policies that should apply to REHs. CMS also seeks broad input on the concerns of rural providers that should be taken into consideration as CMS implements the program participation requirements for REHs.

For additional background on the REH statute, please see our prior On the Subject.

In Depth

CMS seeks input on a wide variety of topics related to development of REH regulations, including the type and scope of services that may be offered by REHs, licensure and conditions of participation (CoPs), and the payment rules that will implement the statutory payment methodology.

CMS specifically requests input and comments on the following questions and concepts:

  1. What are the barriers and challenges to delivering emergency department services customarily provided by hospitals and critical access hospitals (CAHs) in rural and underserved communities that may require different or additional CoPs for REHs (for example, staffing shortages, transportation and sufficient resources)?
  2. An REH must provide emergency and observation services and may elect to provide additional services as determined appropriate by the Secretary. What other outpatient medical and health services, including behavioral health services, should the Secretary consider as additional eligible services? In particular, what other services may otherwise have a lack of access for Medicare beneficiaries if an REH does not provide them?
  3. What, if any, virtual or telehealth services would be appropriate for REHs to provide, and what role could virtual care play in REHs?
  4. Should REHs include Opioid Treatment Programs, clinics for buprenorphine induction, or clinics for treating stimulant addiction in their scope of services? Please discuss the barriers that could prevent inclusion of each of these types of services.
  5. What, if any, maternal health services would be appropriate for REHs to provide, and how can REHs address the maternal health needs in rural communities? What unique challenges or concerns will the provision of care to the maternal health population present for an REH?
  6. The statute requires that REHs meet the requirements for emergency services (set forth at § 485.618) that apply to CAHs. Which hospital emergency department requirements (set forth at § 482.55) should or should not be mandated for REHs, and why or why not? Are there additional health and safety standards that should be considered? What are they, why are they important, and are there data that speak to the need for a particular standard?
  7. REHs must meet staff training and certification requirements established by the Secretary. Should these be the same as, or similar to, CAH requirements (Personnel qualifications, §485.604 and Staffing and staff responsibilities, §485.631)? Are there additional or different staff training and certification requirements that should be considered for REHs, and why? Are there any staffing concerns that the existing CAH requirements would not address?
  8. What additional considerations should CMS be aware of as it evaluates the establishment of CoPs for REHs? Are there data and/or research of which CMS should particularly be aware?
  9. What, if any, lessons have been learned regarding rural emergency services during the COVID-19 pandemic that might be pertinent for policy implementation after the public health emergency?
  10. Are there state licensure concerns for hospitals and CAHs that wish to become REHs? What issues with respect to existing or potential state licensure requirements should CMS consider when developing the CoPs for this new provider type? What supports and timelines should be in place for states to establish licensing rules?

    Consistent with the Biden administration’s executive orders aimed at addressing health equity concerns, CMS also seeks comment on the following issues:

  11. How can REHs address the social needs arising in rural areas from challenging social determinants of health (the conditions in which people are born, live, learn, work, play, worship and age, which can have a profound impact on patients’ health), and how should REHs be held accountable for health equity?
  12. With respect to questions 1 through 11, are there additional factors CMS should consider for specific populations, including, but not limited to, elderly and pediatric patients; homeless persons; racial, ethnic, sexual or gender minorities; veterans; and persons with physical, behavioral (for example, mental health conditions and substance use disorders), and/or intellectual and developmental disabilities?
  13. How can the CoPs ensure that an REH’s executive leadership (that is, its governance, or persons legally responsible for the REH) is fully invested in and held accountable for implementing policies that will reduce health disparities within the facility and the community that it serves? In addition, with regards to governance and leadership, how can the CoPs:
    • Encourage an REH’s executive leadership to use diversity and inclusion strategies to establish a diverse workforce that is reflective of the community that it serves?
    • Ensure that health equity is embedded into a facility’s strategic planning and quality improvement efforts?
    • Ensure that executive leadership is held accountable for reducing health disparities?
  14. An important first step in addressing health disparities and improving health outcomes is to consider a patient’s post-discharge needs and social determinants of health prior to discharge from a facility. How can health equity be advanced through the care planning and discharge planning process? How can the CoPs address the need for REHs to partner with community-based organizations to improve a patient’s care and outcomes after discharge?
  15. In order to ensure that healthcare workers understand and incorporate health equity concepts as they provide culturally competent care to patients, and in order to mitigate potential implicit and explicit bias that may exist in healthcare, what types of staff training or other efforts would be helpful?
  16. How can the CoPs ensure that providers offer fully accessible services for their patients in terms of physical, communication and language access with the resources they have available to them?

CMS also seeks comment on the quality measurement and reporting requirements mandated by the Consolidated Appropriations Act, including:

  • What current quality measures in rural care should be recommended or developed? What are likely quality barriers and challenges?
  • What barriers and challenges to electronic submissions of quality measures would apply to REHs?
  • What factors should be considered for the baseline measure set of an REH and how might quality measures support survey and certification of REHs?
  • What incentives or disincentives for quality reporting unrelated to payment would be appropriate for REHs, and should they depend on patient volume or mix or geographic distance?
  • How should CMS report REH quality measure data?

Practical Implications

New provider types are seldom introduced to the Medicare program, and the creation of REHs offers a rare opportunity for expansion of the locations and types of services covered by Medicare. Stakeholders should not miss this opportunity to influence the policy that will determine the health and safety standards that will be applicable to REHs. The depth and breadth of the questions that CMS has provided for comment indicate that CMS is evaluating many aspects of the REH model for rulemaking and guidance, and that CMS believes it has wide flexibility under the statute to determine how REHs ultimately operate in practice. Factors under consideration include not just the CoPs that an REH must meet in order to enroll in Medicare, but other key areas such as what services an REH may provide, what services an REH can be paid for under Medicare (and under what methodology), quality reporting standards and reporting requirements.

Responses to the current requests for information can be submitted to CMS electronically at or by mail no later than September 13, 2021. CMS intends to use comments received in response to this request for information to develop a proposed rule to implement this new provider type. This will provide stakeholders with an additional, but more limited, opportunity to submit comments after publication of CMS’s proposed rule. CMS is obligated to propose and finalize regulations establishing and governing REHs in time for the statutorily required effective date of January 1, 2023.