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Recent Law Impacting Rural Health Care Organizations

01/26/2021

By Timothy Jones, associate director, Federal Relations and Chad Larson, MBA, executive director, Hospital Business Development

In late 2020, the “Consolidated Appropriations Act, 2021” was signed into law providing the federal government with funding for the rest of its fiscal year, adding economic relief related to COVID-19, and enacting other health-related provisions. 

Some of these provisions impact rural health care organizations. As we discussed in a blog post last summer, many rural health care organizations have unique struggles in meeting patient needs during the pandemic.

Emergency Care
The law creates a new, voluntary Medicare payment designation that allows a critical access hospital (CAH) or a small, rural hospital with less than 50 beds to convert to a Rural Emergency Hospital (REH) to preserve beneficiary access to emergency care in rural areas that can no longer support a fully operational inpatient hospital. This goes into effect on January 1, 2023. Per the law, REHs will need to meet the Centers for Medicare and Medicaid Services’ (CMS) Conditions of Participation (CoPs) applicable to:

  • CAHs, with respect to emergency services
  • hospital emergency departments as determined by the Secretary of the Department of Health and Human Services (HHS)

REHs can also furnish additional medical services needed in their community, such as:

  • observation care
  • outpatient hospital services
  • telehealth services
  • ambulance services
  • skilled nursing facility services

REHs will be reimbursed by Medicare the same amount as payment for hospital outpatient services plus a 5% increase. REHs will receive an additional monthly facility payment to support other services such as telehealth and ambulance services, as well as operating and maintaining facilities.

Study of Future Relief
The law requires CMS to study and propose solutions that would allow vulnerable hospitals serving rural and underserved populations to receive relief in the near-term, as well as explore payment options that can ensure more hospitals serving rural and underserved populations can operate in a more financially sustainable way. 

These recommendations should be provided to certain congressional committees by July 2021.

The law also:

  • Extends the Rural Community Hospital Demonstration by five years.
  • Extends the Frontier Community Health Integration Project (FCHIP) demonstration by five years. The FCHIP demonstration tests new models of health care delivery for rural CAHs.
  • Implements a comprehensive Rural Health Clinic (RHC) payment reform plan.
  • Allows RHCs to furnish and bill for hospice attending physician services beginning January 1, 2022.

The Joint Commission will continue to track these efforts as the new administration begins. In the meantime, we’d love to know your thoughts. Please comment on our LinkedIn page and share your opinion with our community.


Tim Jones serves as associate director, Federal Relations in The Joint Commission’s Washington, D.C. office. Jones has over 18 years of government relations experience and has worked at Humana, Change Healthcare and Children’s National Health System. He began his career on Capitol Hill working for former Senator George Voinovich. 

Chad Larson, MBA, is executive director, Hospital Business Development. He served as director of Business Operations in the Division of Support Operations, where he led the administration and management of operational, financial and planning activities. He also was a project lead on the Malcolm Baldrige National Quality Award, utilizing Baldrige Excellence Framework and Lean Six Sigma methodology to identify gaps in internal processes to promote organizational culture transformation.