GRAVETTE, Ark. (KNWA/KFTA) — A bill is headed to Gov. Sarah Huckabee Sanders’ desk that would allow Critical Access Hospitals to change their designation to a Rural Emergency Hospital.

This bill has been widely accepted by legislators and would allow each hospital that qualifies to make its own decision on whether or not they want to apply. According to Craig Wilson, the Health Policy Director at the Arkansas Center for Health Improvement, more than 40% of rural hospitals in Arkansas are operating at negative margins. About 16% of hospitals are at immediate risk of closure.

The bill calls to authorize the designation to improve the health of rural areas, preserve healthcare services, encourage collaboration among health professionals and promote quality healthcare services.

Qualifying hospitals will need to be a licensed critical access hospital and have no more than 50 licensed beds.

Switching to a rural emergency hospital designation would create the opportunity for more Medicare funding through outpatient and emergency services. It would also create opportunities for some hospitals to expand outpatient service opportunities.

According to Wilson, this bill comes at a critical time. Especially as surrounding states see rural hospital closures.

“They struggle with aging facilities, out-migration of population in these areas, and, frankly, increasing costs,” said Wilson.

Wilson said the transition of designation may be a hassle for some hospitals. Facilities and infrastructure will need to change, and a transition plan will be needed.

One drawback is that hospitals under the rural emergency hospital designation will not be allowed to have inpatient services.

Ozarks Community Hospital in Gravette is classified as a critical access hospital. Hospital administrator, Scott Taylor, said keeping the doors open can be a struggle. However, they won’t be switching to the new designation if the bill is signed by the governor.

“Our clinic providers would lose a hospital that they feel comfortable with, and they would have to find other referral sources,” said Taylor.

Taylor can still see other hospitals applying. He thinks it’s going to come down to each hospital weighing the benefits.

“A hospital that has a daily census of two or three, that would be a hospital that would look at this,” said Taylor.

State Representative Lee Johnson is a sponsor of the bill. He’s a physician in Fort Smith and has worked in Arkansas Emergency Departments for the past 25 years. He’s worked at small hospitals in areas of Arkansas such as Booneville, Malvern and Stuttgart.

“I’ve seen firsthand the struggles that some of our critical access hospitals have, and they’re critical to the infrastructure of our medical care. So, whatever we can do to help them thrive and survive, we want to be able to do that,” said Johnson.

Johnson sponsored this bill to give each of the qualifying hospitals a choice. So, if they don’t want to switch, there’s nothing wrong with that.

Johnson believes this may be the lifeline some hospitals need to stay open. He said it will also provide the opportunity for hospitals to improve on a new business model, adding more than just financial benefits to the hospitals that decide to switch.

“I think the important thing is to give these hospitals the opportunity to look at the financial situation they’re in and look at how many patients are being treated in versus out of the hospital,” said Johnson.

The bill will go into effect immediately after the governor signs it into law.