CMS Pub. 100-08, ch. 10, § 10.2.1.8.1

Section 125 of Division CC of the Consolidated Appropriations Act, 2021 added a new section

1861(kkk) to the Social Security Act (the Act) to establish REHs as a new Medicare provider

type to address the growing concern over closures of rural hospitals. In accordance with section

1861(kkk), a facility is eligible to convert to an REH if it was a CAH or rural hospital with not

more than 50 beds as of December 27, 2020. REHs must provide emergency services and

observation care and are prohibited by the statute from providing inpatient services.

The CY 2023 OPPS/ASC fin4al rule (CMS-1772-F) established, among other things,

requirements that REHs must meet to bill Medicare. These included enrollment requirements,

addressed in part in new 42 CFR § 424.575. In short, the rule specified the following:

• A CAH or rural hospital wishing to convert to an REH must submit a Form CMS-855A

change of information application, rather than an initial application

• No application fee need be paid

• REHs will be in the “limited” screening category under 42 CFR § 424.518

• REHs fall within 42 CFR § 424.520(a) in terms of establishing an effective date of billing

privileges.

This section 10.2.1.8.1 instructs contractors on the processing of REH enrollment applications.

Note that REHs (like CAHs) are not “transitioning” as that term is used in this chapter with

respect to the survey and certification process.

A. Initial Process

(CMS will notify the contractors and the public as to when prospective REHs may begin to

submit applications.)

1. Submission

In submitting a Form CMS-855A change of information (COI) application to convert to an REH,

the facility must:

(a) Check the “You are changing your Medicare information” box in Section 1(A)

(b) Check the “Other” box in Section 2(A)(2) and write “Rural emergency hospital” or “REH” in

the line next thereto

(c) Complete Sections 2(B) (with REH information), 3, and 15 and/or 16 (as applicable)

(d) Report any additions/deletions/changes to its current enrollment information (that is, its

current CAH or rural hospital enrollment) that will stem from its conversion to an REH (e.g.,

new billing agency, adding/deleting two managing employees, deleting a 10 percent owner)

(e) Submit all required state licenses/certifications for operation as an REH (if available to the

provider at the time)

(CMS will conduct outreach to the prospective REH community regarding the above

requirements.)

However, the facility need not submit with its application:

• An application fee

• Any documentation related to its existing enrollment as a CAH or rural hospital (e.g., CAH

licensure) except if a new adverse legal action is also being reported, in which case the

contractor shall follow the instructions in section 10.6.6 of this chapter concerning

documentation acquisition.

• Any other documentation that: (1) is specific to the survey and certification process; and (2) a

non-transitioned, certified provider/supplier typically submits directly to the state or SOG

Location pursuant to this process (e.g., a signed provider agreement). The state or SOG Location

will, as applicable, collect this information. If the provider nonetheless submits these materials

with its application, the contractor shall include them in any recommendation package it sends to

the state; however, the contractor need not review them for compliance, signatures, etc.

2. Initial Contractor Review

In reviewing the application, the contractor shall adhere to the following:

(i) Eligibility -

• The contractor shall review PECOS to ascertain whether the enrolling REH was enrolled as a

CAH or rural hospital as of December 27, 2020.

• If the contractor finds that the facility does not meet the above-referenced December 27,

2020, enrollment requirement, the contractor shall follow the procedures in section

10.2.1.8.1(A)(4)(ii) for denying the application without making a referral to the state/Survey

& Operations Group Location.

• If the contractor is uncertain as to whether the facility qualified as a "rural hospital" as of

December 27, 2020, it may contact its Provider Enrollment & Oversight Group Business

Function Lead for assistance.

(ii) Submission of New/Initial Enrollment – In the highly unlikely event that the facility submits

a full, initial REH enrollment application rather than a COI, the contractor shall nonetheless

process the application. No fee is required. (See subsection (A)(3) below for more information.)

(iii) Application Fee – If the facility submits an application fee and/or hardship waiver, the

contractor shall refund/return it consistent with the instructions in this chapter. However, if the

facility seeks to add a new location pursuant to its application, the contractor in all cases shall

contact its PEOG BFL for guidance.

(iv) Returns – If the contractor determines that a basis exists for returning the application under

42 CFR § 424.526 and section 10.4.1.4.2 of this chapter, the contractor shall contact its PEOG

BFL for guidance.

(v) Authorized/Delegated Officials – The facility is not required to assign and utilize new

authorized and delegated officials pursuant to the conversion. It may continue to use the officials

who are part of its existing CAH or rural hospital enrollment. However, as with any other

change of information stemming from the conversion, the facility must report any changes to its

current authorized/delegated officials; this could occur, for example, if the facility will be under

new leadership or management.

(vi) Voluntary Termination – The facility is not required to submit a voluntary termination

application to terminate its existing CAH or rural hospital enrollment. Any termination will be

effectuated upon the approval of the REH’s enrollment. (See subsection (B) below.)

3. Processing and PECOS

Subject to the provisions in subsections 10.2.1.8.1(A)(1) and (2) above, the contractor shall

process the COI consistent with the COI processing instructions in this chapter. This includes,

but is not limited to, performing all required verifications (e.g., a new managing employee and/or

delegated official is reported), developing for any missing or incomplete data, etc. It does not

include, however, making determinations normally reserved to the state or SOG Location. For

REHs, this includes, but is not limited to: (1) the number of beds; (2) whether emergency

services, observation care, and inpatient services will be performed; (3) whether the facility is

indeed in a rural area; and (4) whether CoPs are met.

Absent clear evidence to the contrary, the contractor can assume that any Form CMS-855A data

that is not reported as changing per subsection (A)(1)(d) above is remaining intact. For instance,

suppose the provider does not report any changes in Section 4 of the COI. The contractor can

assume that the provider’s practice location data will remain as is.

During the aforementioned process, the contractor shall create a new enrollment record in

PECOS for the REH. The record shall include: (1) the data submitted on the COI; and (2) data

that is currently part of the CAH’s or rural hospital’s enrollment record but is not changing on

the COI. To illustrate, assume a CAH submits a COI to convert to an REH. Sections 6, 7, and 8

are blank, but Section 2(B) contains new REH licensure data. The new REH enrollment record

shall include the Section 2(B) REH licensure information as well as the Section 6, 7, and 8 data

that is in the CAH’s current enrollment record. The CAH’s enrollment record shall remain

active and intact at this point.

For submitted initial applications:

• The contractor shall process the application consistent with this chapter’s instructions for

processing initial applications involving non-transitioning certified providers/suppliers.

• While the contractor shall create a new PECOS enrollment record for the REH, it need not

(unlike with a COI) populate it with data from the facility’s existing CAH or rural hospital

record. It can simply use the data on the initial application; the application shall be designated as

an initial application in PECOS.)

4. Recommendation/Disposition

i. Approval Recommended – If the contractor believes that a recommendation for approval is

warranted, it shall forward its recommendation to the state consistent with the instructions for

processing non-transitioned certified provider/supplier applications. The state will review the

matter and thereafter refer it to the SOG Location for final review.

ii. Rejection or Denial – If the contractor believes the application should be rejected or denied,

it shall send an e-mail to its PEOG BFL that: (1) identifies the provider (e.g., LBN); (2) explains

the basis for the contractor’s position; and (3) if a potential denial is involved, includes a copy of

the draft denial letter for non-transitioned certified providers/suppliers. PEOG will review the

matter. If PEOG approves the rejection or denial, the contractor shall --- within 3 business days

of receiving said approval --- follow existing procedures for rejecting or denying an application;

the state and SOG shall be copied on any denial letter.

B. ePost-SOG Location Procedures

1. Denial

If the SOG Location denies the REH’s request for participation, it will notify the contractor

thereof. The contractor shall accordingly follow the procedures in this chapter for denying non-transitioned certified provider/supplier applications. (No prior PEOG approval of the denial is

needed.) The facility’s CAH or rural hospital enrollment, however, remains as is.

2. Approval

If the SOG Location notifies the contractor of its approval of the REH’s request for participation,

the contractor shall follow the procedures in this chapter for approving non-transitioned certified

provider/supplier applications. As part of this, the contractor shall: (a) switch the REH’s PECOS

record to “Approved” (using the participation effective date on the SOG Location approval

notice); and (b) deactivate the facility’s CAH or rural hospital enrollment (with a status of

“voluntary withdrawal”), as well as any CAH reassignments, effective the day before the REH’s

approval effective date.

C. Additional Considerations

1. Letters

• Denial – Any denial letter sent pursuant to this section 10.2.1.8.1 shall include the following

language: “Your existing enrollment as a [insert critical access hospital or other hospital type, as

applicable] is not affected by this determination.”

The contractor shall use the denial letter applicable to the type of application submitted (e.g., a

COI denial letter for a COI application).

• Approval – The approval letter shall include the following language: “With your enrollment

as a rural emergency hospital, your existing enrollment as a [insert critical access hospital or

other hospital type, as applicable] has been deactivated effective [insert date]. You will no

longer be able to bill for [insert critical access hospital or other hospital type, as applicable]

services under this enrollment.” (No separate voluntary termination letter is required.)

The contractor shall use the approval letter applicable to the type of application submitted (e.g.,

an initial approval letter for an initial application).

The exact placement of the above-mentioned language in the letters lies within the contractor’s

discretion.

2. Processing Alternatives and Clock Stoppages – Except as otherwise indicated in this section

10.2.1.8.1, all processing alternatives and clock stoppages described in this chapter apply to REH

enrollment applications.

D. Enrolled REHs

Once enrolled, the REH, like all providers and suppliers, must maintain compliance with the

enrollment requirements in 42 CFR Part 424, subpart P. This includes, but is not limited to,

reporting changes to its enrollment information, undergoing revalidation (and submitting the

required fee with this application), etc. The contractor need not undertake any special actions

unique to enrolled REHs that are different from those applicable to all other provider/supplier

types.

It is possible that an enrolled REH may seek to return to its former status as a CAH or rural

hospital. To do so---and consistent with 42 CFR Part 424, subpart P and this chapter---it must

submit an initial enrollment application and, for the REH enrollment, a voluntary termination

application. It cannot do so via a change of information.

10.2.1.8.1.1 – Indian Health Service (IHS) Rural Emergency Hospital (REH)

(Rev. 12217; Issued: 08-24-23; Effective: 01-01-24; Implementation: 01-02-24)

Beginning January 1, 2024, a tribal or IHS operated hospital (as defined in 42 CFR § 413.65(m))

that converts to an REH (IHS-REH) that provides hospital outpatient services to a Medicare

beneficiary may be paid for such services under the outpatient hospital All-Inclusive Rate (AIR)

that is established and published annually by the IHS, rather than the rates for REH services

described at 42 CFR § 419.92(a)(1).

A prospective IHS-REH must follow (and are subject to) the same provider enrollment

requirements and procedures outlined in 42 CFR Part 424, subpart P (including 42 CFR §

424.575) and section 10.2.1.8.1 of this chapter as all other prospective REHs (e.g., submission of

change of information rather than an initial application). Accordingly, the contractor shall

process all IHS-REH applications in the same manner it would an REH application. There is no

material difference between an IHS-REH and REH in terms of Form CMS-855A application

completion, submission, and processing. With respect to identifying the provider type in Section

2 of the Form CMS-855A, the facility shall check the “Other” box and list “Indian Health

Service – Rural Emergency Hospital.” (An alternative identification, such as “IHS-REH,” is

acceptable so long as it is clear this is the type of facility involved, though the listing must be in

Section 2(A).)

Concerning the REH letters mentioned in section 10.2.1.8.1(C), the contractor shall replace any

reference therein to “rural emergency hospital” with “Indian Health Service rural emergency

hospital” for IHS-REH applications.

As with other IHS enrollment applications, IHS-REH enrollment applications will be handled by

Novitas Solutions. (See section 10.2.1.9 of this chapter for more information.) Though IHS-

REHs may submit their applications via PECOS, the mailing address for IHS-REH paper

applications is:

Novitas Solutions, Inc.

P.O. Box 3115

Mechanicsburg, PA 17055-1858