Payment Adjustment for Rural Emergency Hospitals1

10.6.4 - Payment Adjustment for Rural Emergency Hospitals1 (Rev. 12369, Issued: 11-17-23; Effective: 01-01-2023; Implementation: 01-03-2023) A rural emergency hospital (REH), as defined in § 419.91, is an entity that operates for the purpose of providing emergency department services, observation care, and other outpatient medical and health services specified by the Secretary in which the annual per patient average length of stay does not exceed 24 hours. The time calculation for determining the length of stay of a patient receiving REH services begins with the registration, check-in or triage of the patient (whichever occurs first) and ends with the discharge of the patient from the REH. The discharge occurs when the physician or other appropriate clinician has signed the discharge order, or at the time the outpatient service is completed and documented in the medical record. The entity must not provide inpatient services, except those furnished in a unit that is a distinct part licensed as a skilled nursing facility to furnish post-hospital extended care services. Rural emergency hospital services, as defined in § 419.91, are all covered outpatient department (OPD) services, as defined in section 1833(t)(1)(B) of the Act, excluding services described in section 1833(t)(1)(B)(ii), furnished by an REH that would be paid under the OPPS when provided in a hospital paid under the OPPS for outpatient services, provided that such services are furnished consistent with the conditions of participation at 42 C.F.R. §§ 485.510 - 485.544. A. Payment for REH Services Beginning January 1, 2023, a REH that provides a REH service will receive a Medicare payment for the service that is equal to the amount of payment that would otherwise apply under section 1833(t) of the Act for the equivalent covered OPD service, increased by 5 percent to reflect the higher costs incurred by such hospitals. The beneficiary co- 1 The information described in Section 10.6.4 of this Manual is based on proposed policies to implement payment for REHs, published as a rider to the CY2023 OPPS proposed rule. All policies are subject to change pending the publication of the final policies concerning this new provider type, including associated REH payment policies, in the CY2023 OPPS Final Rule, CMS-1772-FC. If there are changes to these proposed policies made in response to public comments in the final rule, CMS will update this section accordingly. payment for the service is calculated the same way as it is calculated under section 1833(t)(8) of the Act for the equivalent covered OPD service, excluding the 5 percent payment increase. EXAMPLE: 1. Service/Rate x 0.05 = Increase Amount for REH Services $100.00/Rate x 0.05 = $5.00 Increase Amount for REH Services 2. Service/Rate + Increase Amount for REH Services = Allowed Amount $100.00 + $5.00 = $105.00 Allowed Amount 3. Service/Rate x 0.20 = Coinsurance $100.00 * 0.20 = $20.00 Coinsurance Claims for REH services are paid based on OPPS prospective rates and are adjudicated based on OPPS payment policies and rules. Services performed by an REH that do not meet the definition of an REH service (i.e. certain outpatient services that may be provided on an outpatient basis by OPPS hospitals but are not paid under the OPPS) are paid at the same rate as the service would be paid if performed at an OPPS hospital and paid based on the applicable fee schedule outside of the OPPS. Such services are not considered REH services and do not receive the additional 5 percent payment that REH services receive. Ambulance services furnished by an entity owned and operated by a rural emergency hospital are paid under the ambulance fee schedule as described at section 1834(l) of the Act. Post-hospital extended care services furnished by a rural emergency hospital that has a unit that is a distinct part licensed as a skilled nursing facility are paid under the skilled nursing facility prospective payment system described at section 1888(e) of the Act. B. Monthly REH Facility Payment In addition to payment for individual claims, section 1834(x)(2) of the Act requires REHs to be paid a monthly facility payment. The monthly facility payment for every REH is the same. There is no adjustment to the facility payment because of the size of the REH or amount of revenue generated by the REH. For 2024 and subsequent years, this payment will be updated annually by the hospital market basket percentage increase.