St. Bernards Five Rivers Medical Center wanted to reinvent itself.
On Sept. 1, the Pocahontas hospital was the first in the state to receive the newly created Rural Emergency Hospital designation. That meant that it will provide only outpatient and 24/7 emergency services and no longer accept inpatient patients, though it can still have patients spend the night under observation care.
The federal REH designation, created in 2021 to address concerns about rural hospital closures, comes with an additional 5% payment for Medicare patients for covered outpatient services.
REH facilities also receive $272,866 a month, according to the U.S. Centers for Medicare & Medicaid Services. In 2024 — and each year after that — the payment will increase.
Rural hospitals have been struggling financially because of increased expenses and stagnant reimbursement rates. They welcome the extra revenue.
“It’s definitely a positive,” said Randy Barymon, St. Bernards Five Rivers Medical Center administrator. “But it’s certainly not the panacea. It’s not going to fix everything.”
The REH distinction doesn’t change the reimbursement rates for private payers or Medicare Advantage plans.
About 30%-35% of the hospital’s patients have Medicare, the federal health care insurance program for people 65 and over and for the disabled.
Barymon said the hospital saw a growing demand for outpatient and emergency services, which has been the trend for rural hospitals. About 5% of the hospital’s patients were treated for inpatient services.
St. Bernards Five Rivers Medical Center, which had been licensed for 50 beds before the REH designation, had to “reinvent ourselves with this REH and really focus on the things that we can control, cut costs where we can cut costs,” Barymon said.
For its fiscal year that ended Sept. 30, 2022, the hospital reported a $1.69 million loss on net patient revenue of $17.29 million. In the most recent fiscal year, the hospital had “a substantial loss that we need to try to mitigate for next year,” he said.
The increased payment and the stipend for being an REH “will certainly help” with the hospital’s bottom line, Barymon said.
He said the hospital will target outpatient procedures and market its services.
Barymon said that initially there was some confusion about which patients could stay in the hospital as a result of the new designation. He said he reassured providers that the hospital still could admit patients and to send them there.
“We keep observation patients overnight in the hospital, but as soon as you say we can no longer have inpatients, the assumption was that you couldn’t have any patients in the hospital,” he said. “And obviously, that’s not the case.”
Barymon said he’s talked with other hospital administrators about the REH transition. “A lot of folks are looking at it, and a lot of folks have to evaluate whether or not it makes sense for them,” he said.
Bo Ryall, president and CEO of the Arkansas Hospital Association, said last week that he didn’t know of any other hospitals in Arkansas that have been approved for REH.
“We are pleased that St. Bernards Five Rivers was approved for the Rural Emergency Hospital designation,” he said via email. “The designation allows communities and hospitals to evaluate the services being offered and to convert to REH if it serves the patient’s needs and allows the hospital to stay open.”