Alabama hospitals facing financial challenges are increasingly seeking to participate in a federal program that offers financial assistance but comes with strict regulatory requirements. Under the program, hospitals can be designated as Emergency Rural Hospitals (REH), which provides higher reimbursement rates and financial assistance. However, hospitals lose their ability to perform inpatient services, such as obstetrical and mental health care.
Alabama State Health Officer Dr. Scott Harris has raised concerns about the growing number of hospitals applying for REH designation, warning that it could impact access to inpatient services across the state. Only one hospital, Bullock County Hospital, has fully transitioned to an REH designation so far, resulting in the loss of 30 mental health beds.
Hospitals are gravitating towards the program due to Alabama’s low Medicare reimbursement rates, which are not sufficient for many rural hospitals to remain financially viable. While state lawmakers are limited in their ability to address the issue, Harris emphasized the importance of maintaining access to inpatient services, particularly mental health and obstetrical care.
Hospitals that have either applied or announced their intent to convert to an REH designation include J Paul Jones Hospital, East Alabama Medical Center-Lanier, and Grove Hill Memorial Hospital. Harris noted that the loss of access to inpatient services, especially mental health beds, will be acutely felt by communities. The changing landscape of healthcare in Alabama highlights the challenges facing hospitals in maintaining essential services while navigating financial constraints.
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