The Benefits and Challenges of Converting to a Rural Emergency Hospital

00;00;01;02 - 00;00;46;03
Tom Haederle
The creation of the Rural Emergency Hospital designation on January 1st of this year was intended to offer struggling rural hospitals a new financial lifeline. Converting to REH status allows Medicare to pay for emergency department and other outpatient hospital services without requiring the facility to meet the current Medicare definition of a hospital. It can mean upwards of $3 million in subsidies each year, but there is a trade off involved and explaining that trade off to patients can be a tricky business.

00;00;46;05 - 00;01;13;19
Tom Haederle
Welcome to Advancing Health, a podcast from the American Hospital Association. I'm Tom Haederle with AHA Communications. A rural hospital that wants to convert to the new category of Rural Emergency Hospital must agree to discontinue their non-emergency inpatient services. And that means that patients typically have to leave within 24 hours. Those who can't go home have to be discharged to a full service hospital, possibly in another state.

00;01;13;21 - 00;01;42;10
Tom Haederle
Conversion to REH is a decision with profound implications for the local community. Anson General Hospital in Anson Texas, roughly 200 miles west of Dallas, is among five hospitals that have made the change. In this podcast Anson CEO Ted Matthews and Chief Nursing Officer Anna Doan speak with the AHA's John Supplitt about how this new designation has worked out so far ... and what the local patient population thinks about the move.

00;01;42;13 - 00;02;02;07
John Supplitt
Good day. I'm John Supplitt senior director of AHA Rural Health Services and joining me is Ted Matthews, CEO, and Anna Doan, chief nursing officer, Anson General Hospital, Anson, Texas. And we're here to discuss rural emergency hospitals and how it works. Welcome Ted and Anna, to our podcast.

00;02;02;09 - 00;02;03;22
Ted Matthews
Thank you. Good morning, John.

00;02;03;27 - 00;02;04;21
Ted Matthews
Thank you, John.

00;02;05;01 - 00;02;32;04
John Supplitt
So just folks, so, you know, rural emergency hospitals are a new provider type established by the Consolidated Appropriations Act of 2021. And the purpose is to address the growing concern over closures of rural hospitals. The rules  were promulgated in June of 2022, and they went into effect January 1st of this year. And Anson General Hospital is one of five hospitals that recently converted to a rural emergency hospital.

00;02;32;06 - 00;02;59;08
John Supplitt
And what we want to do is explore their journey from concept to implementation. But before I do, let's share some background on Anson. The hospital district is about 200 miles west of Dallas, and the town has about 2000 residents. And the hospital was built under Hilbert and back in 1952. But the hospital Authority was created in 2016. So, Ted, how would you describe yourself today?

00;02;59;10 - 00;03;45;22
Ted Matthews
That's a good starting point, John. As you mentioned, 2200 residents in our community and the county where we sit, Jones County has not 10,000 residents. We're primarily farming and agriculturally based. The hospital is the third largest employer in the community we have approximately 55 FTEs. Per capita income... we have some socioeconomic issues here in our community. Again, per capita income is 22,000. 35% of our population is greater than 65 years of age.

00;03;45;25 - 00;04;27;00
Ted Matthews
So when we started this process as a rural emergency hospital, we really started looking at it back in June and July of 2022. We had board meetings and basically we had a soft needs assessment with certain individuals within our community because we realized the changes, especially having a geriatric population, and that with the loss of inpatient services and swing bed services, we realized that it was going to be a hardship on a number of our residents and the community.

00;04;27;02 - 00;04;46;03
John Supplitt
So originally as a 45 bed hospital, you featured emergency room services, surgery, diagnostics, lab, radiology, respite care, physical therapy, and you officially converted to Rural Emergency on March 27th. So how was the conversion received by the community when it was announced?

00;04;46;06 - 00;05;28;11
Ted Matthews
Well, John, we've had mixed reviews. Fortunately, for the most part, again, we've had some community meetings and explained this to our community. It allows us to continue to provide access to care. Our focus now is shifting away from the inpatient services that we offered and the swing bed services that we offer to our community, which were critical. And so what it means is that when one of our patients needs to be admitted, perhaps for pneumonia or for some of those other services, basically we can just keep them here for 24 hours.

00;05;28;12 - 00;05;55;15
Ted Matthews
So we're looking at observation stays on site. So we're going to have to transfer those individuals to Abilene as a larger community, 125,000 or so where they have the much larger hospital. But the problem is, again, the individuals, spouses and all that are going to have to be traveling that 30 miles to Abilene and then the 30 miles back.

00;05;55;17 - 00;06;05;17
Ted Matthews
So we are excited about providing services, but it's not the full spectrum of services that we had offered at one time.

00;06;05;20 - 00;06;25;27
John Supplitt
So people got accustomed to receiving a certain level of service and now that's changed. And it also means collaborating with the hospitals in Abilene for the transfers. Do you see this process moving forward evenly? Do you see people becoming more accustomed to the changes that are going to occur?

00;06;25;29 - 00;07;04;11
Ted Matthews
I do. You know, you really don't understand the difference until it affects you personally. And so right now we don't have a large flu population or etc. at this time, but we will during the winter months. And it's one thing in theory to understand the way something works, but entirely different when it affects you individually. We recognize the fact that we're going to be having those discussions with a lot of community members, again, the geriatric population that's wanting to know why their spouse can no longer stay in our hospital as they once did.

00;07;04;13 - 00;07;11;29
John Supplitt
Did you encounter any licensure or regulatory hiccups with CMS or the State Department of Health when you were making the conversion to Rural Emergency Hospital?

00;07;12;01 - 00;07;44;22
Ted Matthews
John, we really didn't it went very smooth for us. We started off out, of course, and had some help. And during all of that we followed up with a lot of documentation and this was all in early January that we started doing that. And then on March the 30th, we received notice that effective March the 27th, that our conversion, our new designation was going to be a rural emergency hospital.

00;07;44;22 - 00;08;20;24
Ted Matthews
And so that went very smooth for us. We had individuals in place. We received a new provider number and our old number of 71 years was no longer applicable. We had a new Peyton number, so we started that process. And by April the 20th, so we were we went on a Medicare and Medicaid hold at that point, and we had to move quickly because this decision was all primarily a financial decision on our part.

00;08;20;24 - 00;08;45;03
Ted Matthews
And to go a month without Medicare or Medicaid dollars coming in was going to be a challenge for us, even though we had financially prepared as much as possible. Again, it was a challenge for us. But by April the 20th, actually less than a month, we had our first facility payment and the hold on the Medicare dollars had been released.

00;08;45;05 - 00;08;56;14
John Supplitt
Oh, great, That's good to know. So the money is starting to come in. Have you received any of the monthly payments that are that are part of the payment process under Rural Emergency Hospitals?

00;08;56;16 - 00;09;19;03
Ted Matthews
We have. Yes. One little caveat there. We're still waiting on the Medicaid dollars to come in. They're still on hold. And this is probably of an answer that someone else could explain better than I can. But even though our Medicaid number will not change, it's tied to the MPI number, which is tied to our new Medicare number.

00;09;19;05 - 00;09;59;09
Ted Matthews
And so we hope to have those dollars released any time now. Under this new designation. I mentioned the facility fee, and that's approximately $274,000 a month, and that will help us. We have lost the inpatient reimbursement and we've lost the swing bed reimbursement. But the $270,000 monthly, approximately $3.3 million a year, should provide us enough funding to continue to operate. At the offset our inpatient numbers again and our swing bed numbers on a net basis.

00;09;59;09 - 00;10;23;12
Ted Matthews
That's about 2.8 2.9 million that we're going to get on an annual basis. And John, last year, this fiscal year just ended, we we lost 2.6 million. And so you can see from those numbers, the margin is extremely thin. And we're just going to have to be doing an exceptional job of being good stewards on the financial side.

00;10;23;14 - 00;10;45;15
John Supplitt
Well, I certainly can appreciate the pressure you're under financially as you move towards this transition. But hopefully this new model and its payment process will be a strong path for you to move forward. Anna, let's pull you into the discussion. You know, part of this responsibility is that you have to have a detailed action plan of services.

00;10;45;17 - 00;11;00;08
John Supplitt
So if you would, tell us what services you're presently providing and and clearly you've given up swing bed services, but then how did you arrive at the decision as to which services you would provide and where the physicians included in any of the decision making for this?

00;11;00;11 - 00;11;32;13
Anna Doan
During the initial conversations during the board meeting, we included our full time physicians in that conversation and they were both of them were on board with the decision to convert to REH. As you mentioned earlier, the two services we lost were inpatient services and swing bed services. So in our action plan we continued ... we have a three-bed emergency room, so we have for 24 hour emergency room services, we have laboratory, we have radiology that includes X-ray and CAT scan.

00;11;32;15 - 00;11;47;20
Anna Doan
We still have physical therapy as well as our rural health clinic. And then we're utilizing our observation services and our numbers are great compared to last year. Our numbers have been very good since converting.

00;11;47;22 - 00;12;12;20
John Supplitt
Well, that is encouraging. So CMS also established rules regarding access, safety and quality of care for Rural Emergency Hospital patients. And those are closely aligned with those of critical access. But you're also expected to implement a quality assessment and a performance improvement program. So how are you doing with respect to the quality and meeting the the conditions of participation upon conversion?

00;12;12;22 - 00;12;38;08
Anna Doan
This is for sure, an ongoing process. We're only the fifth in the nation to be able to get this certification. So we are in constant communication with CMS regarding what measures we're going to do and everything is just still up in the air. It's every statement as we will get back to you on this, when we have everything finalized, we will get back to you.

00;12;38;09 - 00;12;51;28
Anna Doan
So we're just doing our best to continue to provide excellent patient care and knowing that all we can do is the ER and observation within the hospital setting. And we're hoping we have a better understanding of all this in the next six months.

00;12;52;01 - 00;12;59;03
John Supplitt
So presently, then, what is the framework from which you're working in order to assure quality and patient safety?

00;12;59;06 - 00;13;34;04
Ted Matthews
You know, at one time, for example, we reported on HCAPS, we reported on DACA, we reported on hospital inpatient quality reporting, population and sampling, e-comm hospital acquired infections, etc. And a lot of those were tied to our inpatient census. And as Anna said, we realized we're going to continue to report on our emergency room and all of those outpatient services, but it's inpatient services.

00;13;34;04 - 00;13;58;07
Ted Matthews
And so what are going to be the new reporting metrics that we're going to have to address? And again, as Anna said, we have actually reached out to CMS and they said it's sort of their developing those for us. And so we just continue to report on what we can. And we're waiting for some feedback from CMS as we move forward on this.

00;13;58;07 - 00;14;13;02
Ted Matthews
So hopefully we'll have a better understanding and better answers in six months or so. But again, we have actually reached out to them and it's being developed as we speak.

00;14;13;04 - 00;14;34;11
John Supplitt
Well, and it is a work in progress. And I think we all have to understand that. So we're learning as we go, but we really appreciate the pioneers here, such as yourself, that are taking this on and have made the conversion to Rural Emergency Hospital. One of the things here, Ted, is that Medicare agrees to pay that additional facility fee in 12 monthly installments.

00;14;34;13 - 00;14;52;19
John Supplitt
But there's also an expectation that you'll be able to record and report how you use that money as part of the requirements for conversion. Do you have a process by what you've set up in order to explain to CMS how you're using these additional facility payments?

00;14;52;21 - 00;15;21;19
Ted Matthews
We are. We're setting that process up now. A part of those funds will go for staffing. I can tell you when we went through this conversion, we lost about 20% of our employees, which is unfortunately, you never enjoy making those type of administrative decisions, but we had to do so. So part of that will go toward employing payroll of our employees.

00;15;21;19 - 00;15;56;16
Ted Matthews
And the other part, we have capital needs that we need to make. And we just we're in the process of very slowly starting to do that, especially on the laboratory side. Radiology, we look pretty good. We have a new C.T. scanner that we rolled out, so we're getting a lot of good feedback on that. But again, limited capital expenditures, the needs to make payroll, and we are just trying very, very slowly.

00;15;56;16 - 00;16;03;04
Ted Matthews
But we are growing access to care and continuing to provide excellent services.

00;16;03;06 - 00;16;29;11
John Supplitt
This is all really very helpful for us to hear, particularly as we're learning along with you about the conversion to Rural Emergency Hospital. Anna said the volumes good that it's consistent with what you expected. You're looking at taking the the monthly payments and applying them towards wages, payroll, diagnostic sticks, capital, the basic infrastructure that you would need as a Rural Emergency Hospital.

00;16;29;14 - 00;16;36;17
John Supplitt
Let me ask you finally, what advice do you have for those that are looking to convert to an REH. Ted, why don't you go first?

00;16;36;19 - 00;17;10;09
Ted Matthews
Our decision to become a Rural Emergency Hospital was the for most was driven primarily and solely on the financial side. Our payer mix, our volume... when I say payer mix, you have to understand in Texas that we have the largest number of uninsured individuals in the state and by far in rural communities, probably at 22 to 23% of individuals who walk through our emergency room are uninsured or underinsured.

00;17;10;09 - 00;17;38;26
Ted Matthews
And even those who we move on the observation side are uninsured. So that is a number that we constantly track. We look at the cost of operating a facility. Again, we've been here 71 years. We know just about all of our patients on a first name basis. We provide that one on one care and that's exceptional care. But all of that comes at a high cost, dollar costs to us.

00;17;38;28 - 00;18;06;02
Ted Matthews
So when we sat down and started going through this, it really wasn't an option. Do we want to do it or do we not want to do it? It was the only option we had. In Texas, we've lost 26 rural hospitals, and rural hospitals are critical to our survival. 85% of Texas is considered geographically rural. We only have 15% of the voting block.

00;18;06;05 - 00;18;29;28
Ted Matthews
Again, we've lost 26 rural hospitals. And if we had not been able to convert to this Rural Emergency Hospital at this time, we would have been the 27th rural hospital to close. And that is why we did it. But rural health care is a challenge here, down here, and we just roll up our sleeves. We all do whatever it takes to make it work.

00;18;30;00 - 00;18;40;17
John Supplitt
So, Anna, how about you? What what advice do you have for those that are looking to convert as a nursing director, speaking to other clinical professionals and nurses, what what would you recommend to them?

00;18;40;19 - 00;19;13;14
Anna Doan
The hardest part was the initial laying off because that's what affected nursing services the most. But as far as my advice to other hospitals as a CNO, I think the main thing is just communication and education with my staff, knowing where the providers and the staff, what services can we provide. There's all of these services we can continue to do and to provide for the community, and they still have access to care here. And that provided reassurance to the staff and to the community just with simple education in conversation.

00;19;13;16 - 00;19;21;14
Anna Doan
When it was uncomfortable conversation, they were reassured that this is hope. This conversion provides us hope for our hospital.

00;19;21;16 - 00;19;48;27
John Supplitt
Well, and that's a great way to end our conversation. It's about communication, it's about education, about keeping your community and your staff informed of the decisions that are being made and why we're making them. And with the intent of providing a medical presence, including emergency services that keep the community safe and secure. I want to thank my guests, Ted Matthews, CEO and Anna Doan, chief nursing officer and San General Hospital Finance in Texas.

00;19;49;00 - 00;20;11;06
John Supplitt
Thank you both for walking me through your firsthand experience with conversion to a rural emergency hospital. The nation will be watching closely as you grow and evolve under this new model of payment and delivery. So we wish you every success in your effort and hope to learn more about how we can make this model better for patients, hospitals and the communities we serve.

00;20;11;08 - 00;20;20;10
John Supplitt
I'm John Supplitt, senior director of Rural Health Services. Thank you for listening. This has been an Advancing Health podcast from the American Hospital Association.