At least three Mississippi hospitals aim to end inpatient services, convert to rural emergency status

As the state’s health care crisis persists, four more Mississippi hospitals have applied to become rural emergency hospitals, a federal designation meant to increase their financial viability.

The “rural emergency hospital” designation – a move State Health Officer Dr. Daniel Edney likened to a hospital closure – was rolled out at the beginning of this year. To qualify, hospitals have to end inpatient services and transfer emergency room patients to larger hospitals within 24 hours. In exchange, they get monthly stipends from the federal government and higher insurance reimbursement rates. 

If approved, the hospitals – Quitman Community Hospital in Marks, Panola Medical Center in Batesville, Jefferson County Hospital in Fayette and Magee General Hospital – would be some of the first rural emergency hospitals in the country.  Just a handful have been approved so far, including Alliance Healthcare System in Holly Springs, according to a database last updated on Aug. 15.

For rural hospitals with an already-small daily census, it can be a lifeline — instead of losing money on what few patients they have, the adjusted reimbursements help them break even or even profit.

However, for the communities with only one hospital, it means the end of inpatient health care and a hospital with little more than an emergency room.

In an interview with Mississippi Today in February, Edney said converting to a rural emergency hospital was basically a closure.

“It’s mainly critical access hospitals that are shifting, and when that happens, you’ve lost the hospital,” he said. “It’s a critical access hospital without the hospital.”

Critical access hospitals — another designation designed to improve hospital finances — are reimbursed by Medicare at a 101% rate, theoretically allowing a 1% profit. However, they must have 25 or fewer inpatient beds, be located 35 miles from another hospital, operate emergency services and transfer or discharge their patients within 96 hours. 

In Mississippi, where nearly a half of rural hospitals are at risk of closure, others think the conversion is worth keeping the hospital functionally open.

Quentin Whitwell, an attorney from Oxford, is one of those. He was behind the effort in Holly Springs as co-owner of the hospital, as well as in Georgia where two of the country’s first rural emergency hospitals were approved. He’s also spearheading the change at three of the four hospitals that have applied in recent weeks: Quitman Community Hospital, Panola Medical Center and Jefferson County Hospital.

Whitwell co-owns the Quitman and Panola hospitals and is working as a consultant for Jefferson County Hospital, he said.

The fourth hospital pursuing the designation is Magee General Hospital, led by CEO Gregg Gibbes. 

The Centers for Medicare and Medicaid Services, the federal agency primarily responsible for approving these conversions along with the state Health Department, would not comment on pending applications. 

While some see the new designation as a last resort for struggling hospitals at the brink of closure, Whitwell views it as a way to streamline services and create a financially successful hospital that serves the specific needs of the community. 

“It’s a game changer for a lot of hospitals,” he said. “What we’re trying to do is create a model that makes these hospitals vibrant again.”

Gibbes stressed that hospital leadership at Magee are pursuing the designation as an option – a decision has not yet been made. 

“The plan is to exhaust all efforts to make sure that the organization and ultimately health care is delivered in Magee and the surrounding areas,” he said. “Applying for the rural emergency hospital status is so that we can have an option, should we get approved.”

The hospital, which was in bankruptcy when Gibbes took over in 2019, survived the pandemic — but just barely, with the help of COVID-19 relief funds. He said the hospital is essentially breaking even, and hospital leadership wants to make sure, now that those one-time funds that kept them afloat have dried up, that the hospital remains viable for years to come. 

The hospital, licensed for 44 beds, has an average daily census of 13 people, Gibbes said. He said that’s why it makes sense to explore the rural emergency hospital designation. 

“This is just under consideration,” he said. 

Whitwell, who acknowledged he’s become somewhat of the “REH guy” across the country — he recently spoke at a CMS event about the benefits of the designation — is exploring turning more of his hospitals into rural emergency hospitals for a different reason. 

“I believe in this model, and I want to help, but I also think that a lot of people are going to miss the mark on it,” he said. “And I want to be the guy that CMS holds up … and says, ‘This is how you do it.’”

In Panola, for example, the hospital is losing money on its psychiatric unit, and he sees the new designation as a way to focus its resources on what the hospital already does well: outpatient services. 

“I believe that Panola is going to be probably the most robust REH in the country,” he said. “But we’re definitely losing money right now in psychiatric inpatient services.”

Panola Medical Center, aside from a long-term care facility, is the only hospital in Batesville, a town in north Mississippi with a population of around 7,000, according to the most recent census data. 

Over the years, the hospital has shut down different portions of its psych unit – the geriatric psych section is the only part left. If they qualify as an REH, those remaining beds will have to be closed. But hospital leaders stressed that’s a last resort and would only be considered when their application is finalized. 

In recent months, St. Dominic closed its behavioral health services unit, which provides inpatient mental health and geriatric psychiatric treatment and was one of the only single point-of-entry hospitals for Hinds Behavioral Health Services for people with mental health issues in the metro area. The following weeks saw consistently full beds at Jackson-area psychiatric units.

While Whitwell recognizes closing those beds will be a loss to the community, he said that it might be the only way to turn the hospital’s finances around.

In the meantime, he’s been pitching legislators on changing certificate of need laws to create a hospital within a hospital in order to keep those beds open. 

The Quitman hospital got its letter of approval from CMS on Aug. 31. Once the state Health Department finalizes paperwork on its end, Whitwell said the hospital will begin operating as an REH, retroactively effective Aug. 1. 

Aside from a 5-year period in which it was closed, Quitman Community Hospital has been a critical access hospital since January 2004, Whitwell said.

He said Jefferson County Hospital leadership anticipates final approval in the near future and expects to receive its first federal check by October at the latest.