Mississippi has more rural emergency hospitals than any other state – and there could be two more on the way soon.

Some have hailed the federal designation, created in 2023, as a lifeline for struggling rural hospitals at risk of closure. Others say it forces hospitals between a rock and a hard place. 

Rural emergency hospitals provide 24-hour emergency and observation services, and can also opt to provide additional outpatient services. But the program comes with a catch. 

Hospitals must close their inpatient units and transfer patients requiring stays over 24 hours to a nearby facility. In return, hospitals receive $3.3 million from the federal government each year. 

Rural emergency hospitals in Mississippi currently include Jefferson County Hospital in Fayette, Progressive Health of Batesville, Perry County General Hospital in Richton, Sharkey Issaquena Community Hospital in Rolling Fork and George County Hospital in Leakesville. 

Progressive Health of Houston and Smith County Rural Emergency Hospital in Raleigh, a new department of Covington County Hospital established in collaboration with South Central Regional Medical Center, also intend to apply for the status. 

Nationwide, 29 hospitals have received the designation, according to Centers for Medicare & Medicaid Services enrollment data. Over half of them are located in the Southeast. 

State Health Officer Dr. Daniel Edney last year likened conversion to a rural emergency hospital to a closure because of the corresponding loss of medical services.

Quentin Whitwell, the founder and CEO of Progressive Health Group, said that in his experience, the designation has provided increased sustainability and financial viability for hospitals that have adopted it. 

Progressive Health Group owns and manages six hospitals in Mississippi, Georgia and Arkansas, over half of which are rural emergency hospitals or plan to seek the designation. The organization previously served as a consultant for Jefferson County Hospital. 

“A lot of people saw it as a place where hospitals would go to die. We, on the other hand, saw an opportunity for expanding ancillary and outpatient services and utilizing the federal subsidy to grow those hospitals,” he said.

He said the model has strengthened access in some areas to outpatient services like general surgery, gastrointestinal and primary care and specialty doctors.

Inpatient services are “the drag on small rural hospitals,” he said. 

In Mississippi, 37% of hospitals are facing immediate risk of closure, according to a recent report. 52% face some risk of closure and 64% have experienced losses on services. 

Nearly 200 hospitals have closed nationwide since 2005. Many of these hospitals had low patient volumes and revenues that were insufficient to cover their costs, said George Pink, deputy director of the Rural Health Research Program at the University of North Carolina. 

The rural emergency hospital was designed to offset the financial challenges of running an inpatient unit, which is costly because it requires 24-hour-a-day nursing care, along with administrative and dietary departments, regardless of patient volume, he said. 

“They’re not a model of health care for every rural community, they’re not a panacea for rural communities. They really are targeted at very small communities that are at risk of losing their inpatient hospitals,” he said. 

Sharkey Issaquena Community Hospital converted to a rural emergency hospital after a tornado destroyed the hospital in March 2023. Board Attorney Charles Weissinger said the program made sense given the hospital’s circumstances, but noted that “it’s not the salvation for rural medicine.” 

Pink said that among communities that have experienced hospital closures, emergency services are considered one of the most significant losses. 

Progressive Health of Houston intends to apply for rural emergency hospital status to meet that need. The hospital reopened its emergency department in May after a decade without emergency services in Chickasaw County. Whitwell said that last December and January alone, the county saw 10 cardiac deaths out of a population of 17,000.

Without the ability to provide inpatient services, hospitals may have to give up valuable services, like an intensive care unit or obstetric services. 

Though rural hospitals are allowed to provide obstetric services, “it’s not realistic for the reimbursement model,” said Whitwell. 

Irwin County Hospital in Ocilla, Georgia, a Progressive Health Group facility, continued providing obstetric services after becoming a rural emergency hospital, but was forced to close the unit after just four months. 

David Culpepper, spokesperson for Smith County Rural Emergency Hospital, said the new facility will provide emergency care to the area for the first time in two decades. This is possible by eliminating the cost of inpatient care, he said. 

The hospital will offer “strictly emergency services with a full-on suite of imaging … and radiological services along with a fully functioning lab,” said Culpepper. 

It will be located at the former Patient’s Choice Medical Center of Smith County, which closed in 2023. 

Pink, who studies health care finance and rural hospitals at the University of North Carolina, said because the rural emergency hospital program is just over a year old, it’s too soon to say whether the designation helps hospitals surmount their financial challenges. 

Several changes to the law could make the program more appealing to struggling hospitals, he said, like allowing facilities to participate in the 340B Drug Pricing Program, which requires pharmaceutical companies to provide outpatient drugs to certain hospitals at reduced prices. 

Whitwell said he would like to see the program allow hospitals to operate inpatient psychiatric units and to shore up its definition of “rural.”

Republican Rep. John Lancaster of Houston proposed a bill this year to allow rural emergency hospitals to license psychiatric inpatient beds as a separate entity as a workaround to the federal regulations. The legislation did not make it out of committee.

Less than a year after Alliance HealthCare System in Holly Springs received rural emergency hospital status, the Centers for Medicare and Medicaid Services rescinded the designation, arguing that the hospital is too close to Memphis to be deemed rural. 

As a result, the hospital closed its emergency room in April and began the process of becoming relicensed as an acute care hospital.  

Harold Miller, the director of the Center for Healthcare Quality and Payment Reform, said the rural emergency hospital program poses a “problematic choice” for hospitals by forcing them to eliminate inpatient services in order to receive subsidies from the federal government. 

“There is this narrow, narrow window in which a hospital actually could benefit, and then an even smaller window of the hospitals that could benefit that are willing to do what is necessary in terms of closing services to be able to qualify,” he said. 

He said his research shows that hospital closures would be better prevented by ensuring that insurers pay hospitals adequately for their services. Because rural hospitals often have limited administrative resources, they are often not able to combat claims that are contested by insurance companies, he said. 

“We need to be fixing that,” he said. “…We are letting the private insurers off the hook.”

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.