Mere days after being approved as the state’s first rural emergency hospital, the federal government rescinded the designation for Alliance Healthcare System in Holly Springs.

Now, it’s not clear how the hospital will move forward — the conversion to rural emergency hospital is intended to be a lifeline for hospitals on the brink of financial collapse. 

At a state board of health meeting on Wednesday, State Health Officer Dr. Dan Edney said the Centers for Medicaid and Medicare Services awarded the hospital the designation, and then took it away. 

“It is frustrating that they gave us the designation, and now they’re pulling back because they’re in the Memphis footprint,” Edney said. 

Hospitals were only able to apply for the new federal designation a few weeks ago, when the state Health Department announced its rules for “rural emergency hospitals,” a federal program that was finalized in November. 

When a hospital converts to a rural emergency hospital, it must close all of its inpatient services and swing beds and transfer its patients within 24 hours to larger hospitals. In exchange, they’re paid more for the care they provide and get monthly payments from the federal government. 

But because of the drastic shuttering of services, it’s meant as a last resort for hospitals that are near closure, but essential to the communities they serve. Edney has called hospital conversions to rural emergency hospitals, “closures.”

However, in Alliance’s situation, Edney said the state Health Department fully supports their plight to be recognized as a rural emergency hospital. 

Alliance CEO Dr. Kenneth Williams said in a previous interview that the hospital has generally been losing money for more than 15 years, but especially took a hit during the pandemic. Data from the Center for Healthcare Quality and Payment Reform, an organization that says about a third of Mississippi’s rural hospitals are at risk of closure, shows that the hospital has consistently been losing money for the past few years. 

The hospital had been preparing for their rural emergency hospital application to be approved, Williams said in a previous interview — patients were already being discharged as of March 31. 

Williams did not respond to emails from Mississippi Today for this story. 

At the state board of health meeting, when asked if he thinks any hospitals might close in the next few months, Edney mentioned that Alliance’s situation was tenuous, and avoiding closure is contingent on CMS approving its designation as a rural emergency hospital. 

Over the years, the hospital has applied to be a critical access hospital, another federal designation that increases a hospital’s financial viability after it decreases its services, but was denied because of its proximity to Memphis — it’s just an hour away, even though it’s located in Mississippi. 

Williams thought things would go differently this time.

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