House OKs rural hospital bill
Emergency designation to allow access to federal funds
A bill to open up federal funds for rural hospitals passed the Arkansas House on Thursday.
House Bill 1127, sponsored by Rep. Lee Johnson, would allow hospitals to apply for the Rural Emergency Hospital designation to access federal dollars. The Rural Emergency Hospital designation allows rural hospitals to be reimbursed above the rate for Medicare for outpatient services.
The House passed the bill on a 95-1 vote, and the bill will move to the Senate for consideration.
The bill would allow hospitals that receive federal funds for providing limited inpatient care to change their designation to receive more dollars for outpatient services, a sign of a shifting landscape in rural medicine, said Johnson, who is also an emergency medicine physician. Health care facilities that do opt to apply for the designation “shall not have inpatient beds,” unless it is licensed “as a skilled nursing facility to provide post hospital extended care” or “provides behavioral health services,” according to the language in the bill.
While many rural hospitals still serve emergency care and outpatient services, a decreasing number have inpatient care, often having to transfer patients to larger hospitals that offer more specialized treatment.
“Because of the advances we’ve seen in medical care, more and more we’re needing to transfer patients from our rural facilities to our urban facilities,” said Johnson, a Republican from Greenwood. “This is no slight on our rural facilities, it is just the fact is how we deliver care has become more complicated.”
Hospitals under the designation would have to provide emergency care, observation care and outpatient services. The designation, approved by Congress in 2020, is aimed at providing financial relief to rural hospitals, whose bottom lines have been hit particularly hard by the covid-19 pandemic.
“In the past, Medicare has forced hospitals to provide inpatient beds, even if they’re rarely used,” said Bob Wilson, a co-founder of the Rural Healthcare Initiative, a nonprofit based in North Carolina, in a news release. “That leads to financial losses that prevent hospitals from investing in services like maternal or behavioral health that might be more needed in their communities.”
Rep. Justin Gonzales, R-Okolona, was the lone vote against the bill. Gonzales said the bill would prevent future hospitals from taking advantage of the federal plan.
A provision in the bill requires hospitals applying for the Emergency Rural Hospital designation to be licensed on or before Dec. 27, 2020. Gonzales said the provision “would provide an unfair advantage for existing hospitals.”
Johnson said the date is a “federal stipulation” that cannot be changed through state law.