Federal Policy
Rural Emergency Hospital Model Faces Uncertain Future Under One Big Beautiful Bill Act
The Rural Emergency Hospital (REH) designation, created by Congress to stabilize small rural hospitals through Medicare payments for emergency and outpatient services without inpatient beds, is now threatened by provisions in the One Big Beautiful Bill Act. While some hospitals have successfully converted to the REH model to remain operational, others closed before or after conversion. The law's impact on REH payment rates and eligibility remains unclear as CMS develops implementation guidance. State Medicaid agencies and managed care plans in rural service areas face potential network adequacy challenges if REH facilities close or lose viability.
Why it mattersChanges to REH sustainability directly affect Medicaid network adequacy in rural counties where these facilities often represent the only local emergency and outpatient care access point for managed care enrollees.