Small rural facilities with 25 or fewer beds that deliver 24/7 emergency care and receive cost-based Medicare reimbursement to remain sustainable. These hospitals are often the backbone of rural healthcare, ensuring access to essential services in remote communities. Their designation helps offset financial challenges and keeps care local.

A new model allowing rural hospitals to discontinue inpatient services while focusing on emergency and outpatient care, supported by monthly federal payments. REHs provide a lifeline for communities at risk of losing their hospitals altogether, preserving access to urgent treatment, diagnostics, and preventive services. This designation is designed to stabilize struggling facilities without the burden of inpatient care.

Standard acute care hospitals reimbursed under Medicare’s prospective payment system, serving both rural and urban communities. PPS hospitals offer a broader range of inpatient and outpatient services and operate under fixed payment rates for efficiency and predictability. They are the traditional model for general healthcare delivery and often act as regional referral centers.