The Peru hospital is seeking Rural Emergency Hospital status, what does that mean?

Designation opens hospital to outside funding

An aerial view of St. Margarets Hospital on Monday, Jan. 23, 2023 in Peru.

St. Margaret’s hospital in Peru is scheduled to close Saturday, Jan. 28, and officials have said the hospital’s future depends on a Rural Emergency Hospital designation.

This designation opens St. Margaret’s to outside funds, but also means patients will not be admitted or spend any nights at the hospital.

A Rural Emergency Hospital designation is given to eligible hospitals by the Centers for Medicare and Medicaid Services.

Congress established the designation in December 2020 in response to hospital closures in rural communities. The status began Jan. 1 of this year, but the Illinois Department of Public Health still must adopt rules before the designation can be utilized, which is why St. Margaret’s hospital officials began talks with state lawmakers and agencies Monday.

The distinction allows for emergency services, observation care and other outpatient services, but not inpatient care, such as obstetrics.

Didn’t St. Margaret’s seek Rural Emergency Hospital status last fall?

No, but the vision to change the hospital’s status was discussed.

In October, St. Margaret’s issued a letter saying it was putting on hold an application to discontinue emergency and inpatient services at St. Margaret’s Health in Spring Valley, in hopes of pursuing Rural Emergency Hospital designation that would maintain emergency care at both its Spring Valley and Peru hospitals.

“Conversion of one of the St. Margaret’s facilities to an REH would give St. Margaret’s the flexibility to continue its consolidation services and reduce duplication, while still providing emergency services at both locations,” said Tim Muntz, St. Margaret’s president and CEO, and Terry Judd, chairperson of St. Margaret’s board of directors, in an October letter. “The REH designation also comes with significantly higher payment rates from Medicare.”

Rural Emergency Hospitals receive payment of the Outpatient Prospective Payment System rate plus 5% for all outpatient department services provided to Medicare patients. They also receive an additional monthly facility payment, which has the possibility of increasing each year. It allows them flexible staffing and services, and access to technical assistance.

Local lawmakers helped St. Margaret’s with legislation last year, what did that do?

In April, state Rep. Lance Yednock (D-Ottawa) and Sen. Sue Rezin (R-Morris) sponsored Senate Bill 1435, that was signed into law by Gov. JB Pritzker, to allow hospitals in contiguous counties to operate under the same license and lower administrative costs.

St. Margaret’s officials said at the time this bill laid necessary groundwork.

What are state agencies doing now to help St. Margaret’s?

Since the Illinois Department of Public Health learned of St. Margaret’s plan to convert to REH status, the agency has been actively trying to assist them, a spokesman said. This is not a process that can be completed within one week, he said.

The hospital will have to complete the Medicare enrollment process to switch its status. In addition, the hospital will be required to undergo a site visit from IDPH’s regulatory staff.

If the hospital is only having issues staffing its emergency room, why does the entire hospital have to close?

Illinois law does not allow a hospital to operate without an emergency room.