H.R. 10293: Rural Emergency Hospital Designation Improvement Act

This bill would change federal rules for rural emergency hospitals under Medicare and Medicaid. In simple terms, it is meant to make it easier for certain rural hospitals to qualify as rural emergency hospitals, let them offer a somewhat broader range of services, and make more of their services eligible for payment.

What the bill changes

• Expands eligibility to convert to rural emergency hospital status. The bill would broaden the time window used to determine whether a facility qualifies for conversion, and it would direct the Secretary of Health and Human Services to create a waiver process for some facilities that operate similarly to rural emergency hospitals.
• Allows some additional facility units. A rural emergency hospital could maintain or include certain distinct-part units, including:
  • an inpatient psychiatric unit for behavioral health patients,
  • an inpatient rehabilitation unit, and
  • an obstetric wing, labor and delivery unit, or obstetric emergency department.
• Raises Medicare payment for diagnostic lab tests. For certain diagnostic laboratory tests provided by a rural emergency hospital on or after January 1, 2027, Medicare payment would be the normal fee schedule amount plus 5 percent, to reflect higher costs. Any copayments would still apply based on the underlying amount.
• Lets rural emergency hospitals provide some extended-care-type services through agreements. The bill would allow these hospitals to enter into agreements so their facilities can be used for services that would count as extended care services if provided by a skilled nursing facility. Payment would be based on reasonable cost.
• Helps certain hospitals regain “necessary provider” status. If a rural emergency hospital later goes back to being a critical access hospital, the bill would allow it to regain necessary provider status, but only if it had that status before converting.
• Makes rural emergency hospitals eligible for certain workforce and grant programs. The bill would direct regulators to treat rural emergency hospitals as health professional shortage areas for National Health Service Corps site eligibility, and it would add them to the types of facilities eligible for small rural hospital improvement program grants.
• Adds Medicaid coverage for rural emergency hospital services. The bill would amend Medicaid rules so that rural emergency hospital services are included as covered services, and it would also include certain services provided in a nursing facility that is a distinct part unit of a rural emergency hospital.

When the changes would apply

Most of the Medicaid changes would take effect when the bill is enacted, though states could get extra time if they need state legislation to comply. The Medicare payment increase for diagnostic lab tests would apply starting January 1, 2027. Several parts of the bill would also require the Secretary of Health and Human Services to issue regulations within one year after enactment.

Relevant Companies

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