After granting the Holly Springs hospital a special designation aimed at helping small, rural hospitals stay afloat, the federal government is now “reviewing” Alliance Healthcare System’s status as such, the hospital CEO says. 

The hang-up is the hospital’s proximity to Memphis, Tenn., about 50 miles away from Holly Springs. 

Mississippi Today previously reported that the Centers for Medicaid and Medicare Services rescinded the hospital’s rural emergency hospital designation after State Health Officer Dr. Dan Edney said at a state board of health meeting that the federal government was “pulling” the designation mere days after awarding it to the hospital.

However, Edney expanded on his statement later to Mississippi Today and said that CMS made the hospital aware they need “further clarification.”

Alliance Healthcare System was named one of the country’s first rural emergency hospitals in March. The designation requires hospitals to end inpatient services and transfer patients in its emergency room to larger hospitals within 24 hours in exchange for higher reimbursement rates and monthly payments from the government.

The new designation is meant to ease financial stress for hospitals on the brink of closure. 

Alliance CEO Dr. Kenneth Williams said there are differing definitions of “rural hospitals” among various federal organizations. He’s now trying to convince CMS that his hospital is truly rural, despite it being an hour drive to Memphis, Tenn.

“I firmly believe that it is no question that this is a rural community and a rural hospital,” he said. 

He blames the confusion on how new the hospital category is. 

Williams has been talking to representatives from CMS for the past week. He said he’s expecting a final answer within the next few days. As far as Williams is aware, the hospital is still considered a rural emergency hospital, unless CMS rules otherwise. 

CMS did not respond to questions by press time. 

The Holly Springs hospital has been consistently losing money for years, particularly since the pandemic, its leaders say. 

And if the hospital can’t maintain rural emergency hospital status, the situation will be dire, Williams said.

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