To learn more, check out our blog post, Rural Emergency Hospitals: Legislative and Regulatory Considerations for States.
Section 1. Title
This Act shall be known and may be cited as the Rural Emergency Hospital Act.
Section 2. Purpose and Intent
The purpose of this Act is to provide for the licensure and designation of Rural Emergency Hospitals in this state. The intent of the Rural Emergency Hospital license is to ensure access to rural emergency services for residents of this state.
Drafting Note: Rural emergency hospitals are defined in accordance with federal regulations, 87 Fed Reg. 71748
Section 3. Definitions
For the purposes of this Act:- “Beds” means the number of available bed days during the most recent cost reporting period divided by the number of days in the most recent Medicare cost reporting period.
- “Commissioner” means the Commissioner of the Department of Health. Drafting Note: Use the title of the chief regulatory official for hospital licensure whenever the terms “commissioner” appears. Use the name of the appropriate state entity whenever “department of health appears.”
- “Critical Access Hospital” means a hospital designated as a critical access hospital pursuant to 42 U.S.C. section 1395x(mm)1. Drafting Note: An existing state statutory definition for Critical Access Hospitals (CAHs) can be included here.
- “Hospital” means an entity licensed as a hospital pursuant to the provisions of this state’s statutes, and includes any entity affiliated with such hospital through governance or membership, including, but not limited to, a holding company, a parent company, subsidiary, affiliate or joint venture, or any combination thereof, of such entity. Drafting Note: States will determine path of licensure—whether an REH will be licensed as one of the following: 1) a separate category of facility separate from traditional acute care hospital or other hospital requirements; or 2) as a category of “hospital” already included in state law; Use the appropriate definition here. See 42 U.S.C. section 1395x(kkk)(5).
- “Rural emergency hospital” is a facility that meets the eligibility requirements in section 4 of this Act, and any amendments thereto, and
- Provides rural emergency hospital services in the facility 24 hours per day;
- Maintains an emergency department staff 24 hours per day, 7 days per week, with a physician, nurse practitioner, clinical nurse specialist or physician assistant;
- For purposes of reimbursement under federal healthcare programs, meets the requirements of 42 U.S.C. section 1395x(kkk)(2) and any amendments thereto, or regulations or guidance issued under federal law, and amendments thereto; and
- Meets other requirements of the hospital licensing authority deemed necessary of the health and safety of individuals provided rural emergency hospital services.
- “Rural emergency hospital services” means emergency department services, observation care, and other outpatient medical and health services authorized by the commissioner, and in the case of reimbursement by federal healthcare programs, specified by the Secretary, provided by a rural emergency hospital in which the annual per patient average length of stay does not exceed 24 hours.
- “Rural Hospital” means a hospital designated as a rural hospital under federal and state law. Drafting Note: Use a specific state definition if there is one.
- “Secretary” means the Secretary of the U.S. Department of Health and Human Services.
- “Transfer Agreement” means an agreement between a rural emergency hospital and a Level I or Level II trauma center for the transfer of patients requiring emergency services.
Section 4. Eligibility Requirements
- A facility shall be eligible to apply for licensure as a rural emergency hospital in this state, if such facility, as of December 27, 2020, was:
- A licensed critical access hospital;
- A licensed hospital, as defined in 42 U.S.C. section 1395ww(d)(1)(B), with not more than 50 beds located in a county (or equivalent unit of local government) in a rural area, as defined in 42 U.S.C. section 1395ww(d)(2)(D);
- A licensed hospital, as defined in 42 U.S.C. section 1395ww(d)(1)(B), with not more than 50 beds that was treated as located in a rural area pursuant to section 42 U.S.C. section 1395ww(d)(8)(E); or
- A licensed hospital described in subparagraphs 1, 2, or 3 of this subsection that closed after December 27, 2020, and applies for a new license under this section. Drafting Note: A hospital must be currently licensed to participate as an REH. A state may recognize “critical access hospital” licensure in state law. If a state does not do so, it can refer to hospital licensure and federal designation.
- For the purposes of designation as a rural emergency hospital and eligibility for reimbursement under federal healthcare programs, satisfies application requirements of the department under section 5 of this Act necessary for the department to assist with such designation; and
- Meet additional requirements of the Department of Health as set forth in section 9 of this Act. Drafting Note: This is a reference to a provision of the Act that may include state’s additional requirements or reference to other hospital regulations if applying other hospital requirements, e.g., commercial insurance coverage participation, Medicaid requirements, treatment of hospital outpatient departments, or other requirements listed.
- A rural emergency hospital may:
- Include a unit of the facility that is a distinct part as a skilled nursing facility to furnish post-hospital extended care services, provided that such unit is licensed as a skilled nursing facility; and Drafting Note: A state may include reference in subparagraph 1 of subsection b to the provisions of state law that address licensure of skilled nursing or long-term care facilities.
- Own and operate an entity that provides ambulance services. Drafting Note: A state may include reference in subparagraph 2 of subsection b to other provisions of state law that apply to the approval of an entity to provide ambulance services or oversight of those services.
Drafting Note: Under federal law, a hospital can re-enroll in Medicare and meet all the conditions of participation for REHs provided the hospital is once again licensed. A state may opt not to include this specific subsection 4 and instead use regulations or guidance to clarify the re-licensure/re-enrollment option. The re-enrollment/re-licensure requires a state survey under federal law.
Section 5. Application for License
- A facility shall not operate as a rural emergency hospital until it has submitted an initial or renewal application and has been issued a license from the Department of Health.
- To apply for a new license or to renew an existing license and to assist the Department of Health with the designation of the facility as a rural emergency hospital for reimbursement under federal health care programs, a facility must:
- Submit a completed application in a form and manner determined by the Department of Health, which includes:
- An action plan for initiating rural emergency hospital services, including a detailed transition plan that lists the specific services that the facility will retain, modify, add, and discontinue, ensuring that such action plan is consistent required under 42 U.S.C. section 1395x(kkk)(4), and amendments thereto;
- A description of rural emergency hospital services and additional services that the facility intends to provide on an outpatient basis, consistent with 42 U.S.C. section 1395x(kkk)(4), and amendments thereto;
- A transfer agreement as defined in Section 3 of this Act;
- An attestation prescribed by the Department of Health on its website, signed by the facility’s legal representative or administrator confirming compliance with the licensure requirements of this section of the Act and with 42 CFR Part 485 and amendments thereto; and
- Other such information required by rules and regulations adopted by the Department of Health; and
- Pay an application fee of $X.
Drafting Note: Fees may be covered in a general hospital licensure section of state law or regulation. A state may decide to allow an agency to ask for additional information pending adoption of state regulations, depending on the state’s regulatory process. A state may also defer regulations or adopt emergency regulations. A state should consider other requirements of its existing laws related to public input or attorney general input into the conversion process or other regulatory action regarding termination of inpatient services to the extent such requirements exist for hospitals.
- Submit a completed application in a form and manner determined by the Department of Health, which includes:
- An applicant must grant immediate access to the commissioner or the commissioner’s designee for the purposes of determining, whether the applicant meets the requirements for licensure of this Act and applicable conditions of participation for designation as a rural emergency hospital for reimbursement under federal health care programs in accordance with 42 CFR section 488.3 and amendments thereto. Drafting Note: A hospital that closed or de-licensed after December 27, 2020, but otherwise met the requirements of Section 4.a.1, 4.a.2, or 4.a.3 and applies for a new license, must go through a survey process. Existing state licensure statutes may provide adequate language.
- A license to operate as a rural emergency hospital shall be effective for two years from the date of initial approval or renewal. Drafting Note: A state should substitute its own license effective dates/length of licensure periods.
- A facility shall not represent the status of the facility as a rural emergency hospital prior to the issuance of a license or upon denial or revocation of such a license under section 6 of this Act.
- A facility licensed and operating as of December 27, 2020 that maintained its license and continually operated as a hospital identified in section 4.a.1, 4.a.2, or 4.a.3 of this Act, shall maintain its original license, provided that such license will remain inactive while the rural emergency hospital license is in effect and if such rural emergency hospital license is denied, revoked or otherwise terminated, such facility must meet the licensure requirements of its original license for such license to be reactivated. Drafting Note: A state may consider whether to allow for inactivation of an existing license or require that existing license be considered withdrawn or revoked upon issuance of a new REH license. A state may consider a requirement for reapplication of original licensure or, if an original license was inactivated upon issuance of an REH license, whether a transition plan would be required to assure the state that the hospital demonstrates compliance with its original license requirements prior to reactivation. States should consider the differences between current licensure provisions of hospitals such as inpatient beds, surveys, etc. when determining how to proceed regarding existing licensure.
Section 6. Denial of License
- The department of health may deny or refuse to issue or renew a rural emergency hospital license for failure to meet the requirements for licensure, including but not limited to:
- Failure to comply with application requirements of section 5.b of this Act.;
- Revocation of a license during the two-year period preceding an application;
- Voluntary disenrollment by a facility as a rural emergency hospital under federal law;
- Failure to grant access under section 5.c.; or
- Failure to comply with section 5.e.
- An entity that is aggrieved by a decision of the Department of Health to deny or refuse to issue or renew a license for a rural emergency hospital may exercise its rights pursuant to the state’s uniform administrative procedures act.
Drafting Note: A state may choose to incorporate provisions under existing hospital provisions regarding denials and hearings and appeals of denials of licensure or use this section and cite to the state’s uniform administrative procedures act.
Section 7. Disciplinary Action
Drafting Note: States should consider grounds for disciplinary action and how they will address disciplinary actions, hearings, and appeals, which may include applying the same processes and requirements as hospitals. A state may reference its uniform administrative procedures act with respect to potential consequences of violations, such as imposition of fines and the ability to request a hearing and appeal a decision of the department with respect to disciplinary action.
Section 8. Regulations
The commissioner may promulgate regulations to implement the provisions of this Act. Regulations promulgated under this section shall not conflict with or prevent the application of regulations promulgated by the Secretary under 42 CFR Part 485 and amendments thereto.
Section 9. Relation to Other Laws
Except as expressly provided to the contrary in this Act, a licensed rural emergency hospital shall comply with all applicable federal laws and regulations and the laws of this state and regulations and orders issued by the commissioner that pertain to hospitals.
Drafting Note: States should consider the extent of application of other hospital-or health system-based laws to REHs. States should consider how REHs are similar or different from acute care hospitals/health systems in other provisions of state law, e.g., scope of practice, quality, safety, liability insurance coverage, provider designation for insurance coverage, network adequacy for insurance products; practitioner scope of practice; unfair trade practices, financial and/or data reporting requirements (if applicable), taxation, market oversight, quality reporting for REHs, telehealth, Medicaid reimbursement and other related requirements, treatment of hospital outpatient departments.
Section 10. Effective Date
This Act shall be effective [insert date].
Section 11. Community Advisory Group
- For the purposes of this section:
- “Community advisory group” means an advisory group that is representative of the service area of the rural emergency hospital, the members of which are:
- selected by the governing body of the rural emergency hospital, and
- serve terms to be established by the governing body.
- “Governing body” means the oversight body required by 42 CFR section section 485.510, and amendments thereto
- “Community advisory group” means an advisory group that is representative of the service area of the rural emergency hospital, the members of which are:
- The community advisory body shall meet on a routine basis to evaluate the effectiveness of the rural emergency hospital in meeting community needs.
- The governing body shall, prior to application for licensure under section 5, conduct a preliminary community health needs assessment to guide development of its action plan for rural emergency hospital services, additional services, and the transition plan to rural emergency hospital licensure under this Act.
- A rural emergency hospital must conduct a community health needs assessment no later than three years after initial licensure and at subsequent three-year intervals. In conducting its community health needs assessment, the rural emergency hospital must:
- solicit input from representatives of the service area, including but not limited to, local governments, local public health departments, medically underserved populations, low-income populations, and other health care providers in the community.
- incorporate recommendations of the community advisory group on potential modifications to services offered by the rural emergency hospital, and the operations and activities of the rural emergency hospital.
- A rural emergency hospital shall use the results of the community health needs assessment and the recommendations of the community advisory group to develop a three-year operations plan.
Section 12. Service Coordination Plan
- A rural emergency hospital shall develop an initial service coordination plan for all services, including rural emergency hospital services and additional services the rural emergency hospital offers. Such coordination plan shall include specific arrangements made with other health care and other service providers to assure continuity of care for patients.
- The coordination plan shall include referral, information sharing, and coordinated care management arrangements, as appropriate.
- A rural emergency hospital must establish coordination arrangements with health care and other service providers both within and outside the service area, and such coordination arrangements shall include the transfer agreement defined in Section 3 of this Act.
- The initial coordination plan shall be submitted as a component of the action plan under Section 5 of this Act.
- A rural emergency hospital shall review and modify the coordination plan every three years as part of the triennial community health needs assessment and operations plan pursuant to section 11 of this Act.
