Clifton-Fine Hospital, a 20-bed critical access facility operating at a $2.7 million annual loss, is getting ready to submit an application to the New York State Department of Health, seeking approval to transition to a rural emergency hospital.
Launched on Jan. 1, 2023, the REH designation is a new Medicare provider type designed to address concerns that rural and critical access hospital closures are reducing access to care for people in rural areas.
Dierdra Sorrell, MSN, RN, CEO of Star Lake, N.Y.-based Clifton-Fine, had been researching the model since its launch but started taking a more serious look at a potential change in status when Gov. Kathy Hochul passed the REH designation in her fiscal 2024 budget in May.
"For our hospital, with an inpatient census of one for the most part, it made a whole lot of sense," Ms. Sorrell told Becker's. "We really struggle with getting the inpatient census since we're in a very remote location and the closest hospital to us is about a 50-minute drive."
Because of its remote location, Clifton-Fine has also struggled to get transfers from other hospitals and swing bed patients. That changed briefly during the pandemic when hospitals were overwhelmed with patients, but volumes have since dipped back down.
"The COVID years were good for us as most hospitals were full and looking to offload patients," Ms. Sorrell said. "During that time, our census increased to about three patients but we then started trending back down to our pre-pandemic census of about one patient per day."
To become a rural emergency hospital, facilities must give up their expensive inpatient beds and focus solely on emergency and outpatient care. In exchange, they receive a 5% increase in Medicare payments and average facility fee payment of about $3.2 million a year.
To understand if the designation made sense for Clifton-Fine, hospital leaders compared the REH model against its 2023 performance as a critical access hospital.
In 2023, the hospital's total revenue was about $7.5 million and expenses were $10.2 million, culminating in a $2.7 million operating loss, according to Ms. Sorrell.
By running the REH model against Clifton-Fine's 2023 performance and subtracting all inpatient revenue and expenses, revenue as a rural emergency hospital would have increased to $8.1 billion because some outpatient service lines get paid at an increased reimbursement rate of 5%.
"So, modeling our outpatient services, we actually would have brought in more revenue and our costs would have been down to $7.9 million, which would give us a net income of about $200,000," Ms. Sorrell said.
After doing the financial analysis, hospital leaders decided it makes sense for Clifton Fine to convert to a rural emergency hospital and informed the New York State Department of Health of the intention to do so. If approved, it would be the first hospital in the state to make the transition.
The conversion could affect about a dozen jobs, with any inpatients at Clifton-Fine eventually being moved to Samaritan Medical center in Watertown, N.Y. The hospital plans to add a new emergency room area this year and has received a $150,000 Community Foundation grant to help fund the project.
Ms. Sorrell is working on the health equity impact assessment and a NYSDOH closure plan that must be completed before a certificate-of-need application can be submitted to state officials.
The hospital aims to file those documents in February and convert to a rural emergency hospital this summer, pending state approval.