By TESS VRBIN | Arkansas Advocate

An Arkansas Senate committee on Wednesday approved a proposal that could bolster federal funding for rural hospitals as an incentive to specialize in emergency and outpatient care.

The federal Centers for Medicare and Medicaid Services (CMS) subsidizes critical access hospitals — located no less than 35 miles from other hospitals and maintaining no more than 25 beds — for inpatient treatment of Medicare recipients. Arkansas has 28 critical access hospitals, and they do not receive CMS reimbursements for outpatient care.

House Bill 1127 would create a “rural emergency hospital” designation that would attract more federal funds to rural Arkansas hospitals if they reduce or eliminate inpatient services and focus on emergency and outpatient treatment.

Arkansas’ Medicaid program would reimburse rural emergency hospitals “at the same or greater rate in which critical access hospitals are reimbursed,” according to the bill.

Hospitals would not be required to opt in to the rural emergency designation but would be able to do so “if it makes sense for their business model,” said Rep. Lee Johnson (R-Greenwood), the bill’s sponsor and the chair of the House Public Health, Welfare and Labor Committee.

The equivalent Senate committee approved the bill with no audible dissent Wednesday, sending it to the full Senate.

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