Embracing Change: Issues regarding the potential re-designation of Critical Access Hospitals to Free-standing Rural Emergency Centers

By April 18, 2017Newsletter Article

By: Charles Lewing, Ward Memorial Hospital

While an estimated 19% of the US population lives in rural areas, 54% of all traffic fatalities occur in these geographic areas as opposed to urban areas1. For persons living in rural areas, a closed hospital means farther travel, even hours, for care. This is simply not an option for cardiac issues, workplace injuries, or automobile accidents. Today, critical access hospitals face a three-pronged challenge of high volumes of uninsured and underinsured patients, declining reimbursements from government payers, and a sharp decline in census for inpatient services.

While Rural Health providers face continual challenges, the same cannot be said for the nation’s free-standing emergency departments than now number at over 500 sites. Most are affiliated with a large hospital system and serve as a feeder for patients needing inpatient care. Also, these EDs are usually located within 20 miles of a full-service hospital, typically located in more affluent suburban areas to target privately insured patients2. The same can be said of Urgent Care Centers that cherry-pick locations based on socio-economic factors such as rates of commercially insured residents. So, the prospect of a large for profit ED or Urgent care center opening in a rural community to compete with the local CAH is near non-existent. As a result, Critical Access Hospitals are the only option for persons seeking both emergency and urgent care.

Nearly twenty years have passed since the Critical Access Hospital designation was created as part of the Balanced Budget Act of 1997 in response to a string of hospital closures in the 1980s and early 1990s. This inpatient driven model has become antiquated as the nation’s rural hospitals continue to adapt to meet the needs of their respective communities. The Rural Emergency Acute Hospital Act was introduced in the US Senate in June of 2015 by Senator Chuck Grassley of Iowa to help remedy this situation3. The proposed bill amends title XVII (Medicare) of the Social Security Act to designate as a rural emergency hospital any facility that adheres to the following:

  • Must provide 24-hour emergency medical care and observation care not exceeding an annual per patient average of 24 hours or more than 1 midnight.
  • Does not provide any acute care inpatient beds and has protocols in place for the timely transfer of patients who require acute care inpatient services
  • Is certified by the Department of Health and human services as a designated rural emergency hospital

With this paradigm shift to more emphasis of emergency and outpatient services, a concurrent shift in how rural healthcare is funded will need to occur. This includes, but is not limited to the following:

  • Reimbursement of 110% of reasonable costs for all emergency and outpatient services, including telehealth and ambulance services.
  • State autonomy for waiving a specified distant requirement between a CAH certified as a rural emergency hospital and other neighboring rural hospitals seeking a similar designation.
  • Creation of both federal and state grants under Medicare and Medicaid that incentivize Rural hospitals to improve clinical outcomes, and leverage telehealth technologies.
  • Partnering with full service hospitals in urban areas with approved residency programs in emergency medicine to include time spent by interns and residents in the emergency department of rural hospitals4.

This re-designation of Critical Access hospitals from and inpatient to free-standing emergency model, if adequately funded, has the potential to give rural populations access to quality emergency care, but needs to be part of a broader solution that mixes emergency care with primary and preventive care. This approach is best enabled by combining the favorable attributes of local access to emergency care for quicker diagnostic and treatment, and access to clinical specialists when needed via telehealth technologies. As of late February 2017, The Rural Emergency Acute Hospital Act has yet to gain traction since its introduction in June of 2015.

1National Highway Traffic Safety Administration’s Center for Statistics and Analysis
2The Troubling Rise of Freestanding ERs, The Century Foundation, 07/22/2013