Governor signs ‘Rural Emergency Hospital’ licensing into law

Gov. Kim Reynolds has signed into law a measure intended to help keep some hospitals open in rural Iowa.

House File 75 creates a state licensure process allowing some hospitals to get a “Rural Emergency Hospital” (REH) designation. The designation comes from a federal program, in which hospitals stop providing inpatient services but are able stay open for outpatient services and maintaining a 24/7 emergency room. Only hospitals with fewer than 50 beds are eligible for the program, and must meet other eligibility requirements.

Hospitals joining the program, which began accepting applications in January, would receive more Medicare reimbursements as well as a monthly facility payment.

“This is part of our unwavering commitment to ensuring all Iowans, no matter where they live, receive the quality medical care they need and deserve,” Reynolds said in a statement. “This bill is an impactful step in that direction, and it’s a pleasure to sign it into law.”

The move to this new health care model comes as some Iowa hospitals struggle to keep their doors open. When Blessing Health Keokuk closed in October 2022, U.S. Sen. Chuck Grassley asked whether the REH program could help reestablish the hospital. Michigan-based Insight Institute acquired the Keokuk health care facility Monday, and announced it is considering the federal designation as it looks at the best ways to provide service in southeast Iowa.

Iowa Hospital Association President and CEO Chris Mitchell said the program could help save hospitals like Blessing Health Keokuk in the the future.

“In the last decade, more than 140 hospitals have closed in the United States. Most of those hospitals are in rural areas including one here in Iowa,” Mitchell said in a statement. “This bill provides a potential lifeline to our rural hospitals across the state, gives struggling hospitals another option to avoid closure and ensures that local access to care is maintained.”

Grassley also praised Reynolds and state lawmakers for passing the state licensing program into law.

“REH is the most significant reform to protect access to essential rural health care services in decades,” Grassley said in a statement. “I’m glad rural hospitals and communities in Iowa have one more option to sustain their operations and maintain health care access in the community.”

Reynolds and Iowa Republicans have proposed other measures they argue will help hospitals in rural Iowa stay in business. The governor signed liability limits on medical malpractice cases into law in February to protect doctors and hospitals against “nuclear” jury awards and high insurance rates. The governor’s omnibus health care proposal also contains measures to support rural health care providers.