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REH Designation: A Viable Option for Ailing Rural Hospitals

PLANO, Texas, March 5, 2024. Since its inception more than one year ago, the federal government’s new Rural Emergency Hospital (REH) designation is allowing rural hospitals to avert closure by continuing to offer key services in their communities, according to Community Hospital Corporation.

The REH designation is a Medicare provider program launched in January 2023, through the Consolidated Appropriations Act of 2021. REH was created to improve rural hospital sustainability and enhance patient access in their communities.

An estimated 19 rural hospitals converted to the REH designation in 2023, according to a University of North Carolina report which tracks hospital closures and conversions. As more rural hospitals face financial and operational pressures, some may be poised for REH conversion.

Facilities eligible to apply for REH status include Critical Access Hospitals and rural acute care, tribally-operated, and Indian Health Service (IHS) hospitals with 50 or fewer beds that were open on December 27, 2020.

As a REH, the facility can offer limited services: emergency services and certain outpatient medical and health services.

“REH designation may be a desirable option for eligible hospitals seeking to thrive in a challenging and evolving healthcare environment,” said Michael Morgan, CHC’s Senior Vice President of Strategic Analysis. “Yet hospital leaders must carefully weigh both financial and operational factors when deciding whether to choose this delivery-care model.”

Benefits of REH Designation
The REH-designation carries many benefits including increased patient access to health services, improved hospital financial and operational performance, provides hospitals with a 5 percent premium on outpatient billings, or a reimbursement of 105 percent instead of 200 percent, and allows a fixed monthly payment – called an Additional Facility Payment — of more than $275,000.

Some hospitals, however, may decide not to participate in the program or take a wait-and-see approach. That’s because the REH designation has significant requirements including service limitations, reduced staffing needs and potential revenue losses. Additionally, communities may not respond positively to a hospital’s transition to an REH because it requires hospitals to eliminate inpatient services.

Contact CHC today to help assess your hospital’s alternatives to achieve sustainability in a challenging environment.

About Community Hospital Corporation – HELP WHERE HOSPITALS NEED IT®Community Hospital Corporation owns, manages and consults with hospitals through CHC Hospitals, CHC Consulting and CHC ContinueCARE. Visit

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