As rural hospitals face ongoing financial challenges, a new category of hospital is gradually emerging, particularly in the Southeast region.

Rural hospitals specializing in emergency care receive over $3 million annually in federal funding and are granted increased Medicare reimbursements on the condition that they close all inpatient beds and offer around-the-clock emergency services. Although this arrangement helps these hospitals remain operational, professionals assert that it does not completely address all of the issues prevalent in rural healthcare.

Individuals may need to travel longer distances to receive treatment for certain medical conditions that require them to stay in a hospital, such as pneumonia or COVID-19. In communities where hospitals have transitioned to the new classification, residents may be uncertain about the types of care that are available to them. Additionally, rural hospitals are reluctant to make the change due to the lack of room for error.

“It is paradoxical” that the facilities that are in desperate need of assistance are unable to afford the associated risks, according to Carrie Cochran-McClain, the chief policy officer at the National Rural Health Association. She mentioned the challenge of having to forego certain services and benefits, including a federal program that provides discounts on prescription drugs.

In January 2023, the government implemented a new rural emergency option for hospitals, classified by type. According to the Sheps Center for Health Services Research at the University of North Carolina, only 19 hospitals in the United States were granted rural emergency hospital status in the previous year.

Most are located in the Southern region, although there are also some in the Midwest. Recently, hospitals in Nebraska and Florida have begun to consider this option.

According to George Pink, deputy director of the Sheps Center’s Rural Health Research Program, this designation is intended for a particular group – rural hospitals that are at risk of shutting down and have a low number of patients receiving inpatient care.

This situation occurred at Irwin County Hospital in Ocilla, Georgia. It was the second emergency hospital in the United States to be established in a rural area.

Before the conversion process, the hospital was granted a credit of at least $1 million from the county in order to pay its employees. This money was doubted by county board of supervisors chairman Scott Carver to be returned.

“We have a $6 million budget for the county, so offering such a line of credit was somewhat risky on our end,” he explained. “However, we felt it necessary to take the chance.”

On February 1st, 2023, Irwin County Hospital transitioned into a rural emergency facility. According to CEO Quentin Whitwell, the hospital was a prime choice for this change.

Whitwell, the owner and manager of six hospitals in the Southeast through his company Progressive Health Systems, stated that the effects of this emerging concept are still being discovered. This transformation into a rural emergency hospital has greatly impacted the hospital, although the specific implications are still being determined.

According to Carver, the hospital now has $4 million in funds due to a combination of state initiatives, tax credits, and the new designation. He remarked that the effort put into the work was worthwhile.

Traci Harper, a resident of Ocilla for many years, has doubts about the situation. Approximately one year ago, she quickly took her son to the hospital for urgent treatment for spinal meningitis.

The revised designation now mandates that the hospital must transfer patients to larger facilities within 24 hours. As a result, Harper’s child was transferred to another hospital in the same state and three days later received the necessary treatment at a hospital in Jacksonville, Florida.

She stated that it was a two-hour distance and expressed frustration that no one informed her earlier so she could have taken him there herself.

The initial rural emergency hospital in Nebraska was established in February, located in a town named Friend.

Warren Memorial Hospital had reached a critical juncture: The funds provided by the government for pandemic relief had run out. The hospital, owned by the city, had to provide lines of credit to ensure employees were still paid. This situation even caused a delay in a major street repair project, according to Jared Chaffin, the hospital’s chief financial officer and one of three co-CEOs.

According to Amy Thimm, the hospital’s vice president of clinical services and quality and co-CEO, during the summer we were barely making it through.

Even though individuals at a meeting in September voiced anxieties about shutting down inpatient services, the significance of maintaining emergency response outweighed any other concerns.

Ron Te Brink, co-CEO and chief information officer, emphasized the significance of rural health care for Nebraskan communities, stating that their residents, including farmers and ranchers and those with busy schedules unable to make hour-long trips for medical care, often have no choice but to go without necessary treatment.

On March 5th, the initial federal payment of approximately $270,000 was received. According to Chaffin, the hospital is expected to generate a revenue of $6 million this year, which is higher than any previous year.

“That’s absolutely unbelievable, especially for our small local hospital,” he stated. “We still have a lot of challenges to overcome and a significant amount of work ahead of us. The recognition alone will not rescue the hospital – it’s a vital resource.”

Holding onto that crucial support has presented challenges for Alliance Healthcare System in Holly Springs, Mississippi, which is also one of Whitwell’s hospitals and the fourth facility in the nation to undergo conversion.

Several months after receiving approval as a rural emergency hospital in March 2023, the Centers for Medicare and Medicaid Services unexpectedly reversed their decision.

As a result of a recent statement by Dr. Kenneth Williams, CEO of the hospital, The Associated Press reported that the government has declared the hospital to not be considered a rural facility due to its proximity to Memphis, which is less than an hour away. A representative for the Center for Medicaid and Medicare Services stated that the certification of the facility was a mistake.

The hospital has until April to transition back to full service, but many in the community of largely retirees believe the hospital has closed, Williams said. Patient volume is at a record low. If the federal payments stop coming, Williams isn’t sure the hospital will survive.

“We might have been closed if we hadn’t (become a rural emergency hospital), so … something had to be done,” he said. “Do I regret all of the issues that for some reason we’ve incurred that the other (hospitals) have not? I don’t know.”

Although Alliance seems to be one of the few facilities that have experienced negative effects from the transition to a rural emergency hospital, Pink believes it is too early to determine if the federal designation has been successful.

He stated that if my gut feeling is accurate, it may be effective for certain groups but not for others.

The organization led by Cochran-McClain is advocating for changes in regulations, which have posed challenges for rural facilities. These changes would address the issue of limited inpatient behavioral health beds being shut down.

According to Brock Slabach, the Chief Operations Officer of the National Rural Health Association, about 30 facilities are considering transitioning to rural emergency hospitals in the upcoming year.

As Whitwell sees it: “As this program evolves, there will be more people that I think will understand the value.” ___

The AP Health and Science Department is funded by the Robert Wood Johnson Foundation, with the AP having full responsibility for all of its content.