This bill amends title XVIII (Medicare) of the Social Security Act to designate as a rural emergency hospital any facility that as of December 31, 2014, was:

• a critical access hospital (CAH) or a hospital with at most 50 beds located in a county in a rural area or treated as located in a rural area, or
• one of such hospitals that ceased operations during the period beginning five years before enactment of this Act and ending on December 30, 2014.

A rural emergency hospital:

• must provide 24-hour emergency medical care and observation care not exceeding an annual per patient average of 24 hours or more than 1 midnight,
• does not provide any acute care inpatient beds and has protocols in place for the timely transfer of patients who require acute care inpatient services or other inpatient services,
• has elected to be designated as a rural emergency hospital,
• has received approval to operate as one from the state, and
• is certified by the Department of Health and Human Services (HHS).

Medicare part B (Supplementary Medical Insurance Benefits) shall cover rural emergency hospital emergency services as well as ambulance services provided by a rural emergency hospital or other provider to transport patients who require acute care inpatient services or other inpatient services from the rural emergency hospital to a hospital or a CAH.

Payment for rural emergency hospital outpatient services of a rural emergency hospital, including telehealth and ambulance services, shall be 110% percent of their reasonable costs.

Rural emergency hospitals must be approved by the state and certified by HHS.

States shall have the option of waiving a specified distance requirement between a CAH certified as a rural emergency hospital and another facility located in the state that is seeking designation as a CAH.

Primary health services which the National Health Service Corps may provide under the Public Health Service Act shall include emergency medicine provided by physicians in a rural emergency hospital.

Hospitals with approved residency programs in emergency medicine shall include time spent by interns and residents in the emergency department of a rural hospital in the full-time equivalent count with respect to reimbursement for the indirect (stipend, fringe benefit) and direct (all or substantially all training) costs of medical education in subsection (d) hospitals.

(Generally, a subsection [d] hospital is an acute care hospital, particularly one that receives payments under Medicare's inpatient prospective payment system [IPPS] when providing covered inpatient services to eligible beneficiaries.)