Bill to enable rural emergency hospital designations advances; agencies ask for technical clarifications

The department and a rural hospital system told lawmakers HB1179 would help sustain critical services by allowing certain facilities to adopt the rural emergency hospital model.

Lauren Kim from the Department of Health said the department supports the concept and that a specific hospital planned to convert under the rural emergency hospital designation. She noted the department would prefer to provide statutory language that authorizes the designation and requested time to submit specific draft amendments.

Lynn Fulton, CEO of Maui Health, testified the change would let facilities reassign underutilized inpatient beds to long‑term care and secure reimbursement streams that support island healthcare access; she said the designation would improve viability for Lanai’s hospital. The Department of Human Services (MedQUEST) submitted comments and asked for research into whether the designation would preserve federal Medicaid protections for the affected facility type.

Committee action: the committee advanced HB1179 with technical amendments and a defective effective date. The chair asked staff to provide subsequent committees with the Department of Health’s requested clarifications and amendments.

Why it matters: Proponents said the rural emergency hospital model can help small hospitals remain financially viable and maintain local services; Medicaid and federal requirements may affect how a hospital’s designation impacts reimbursement and benefits.