(A) Federally Qualified Health Centers (FQHC’s), Rural Health Clinics (RHC’s), and Rural Hospitals are recognized and designated as essential community providers for underserved patients which include Medicaid and Medicare recipients, the underinsured, and the uninsured. These populations require more extensive services by community-based providers, and the FQHC’s, RHC’s, and Rural Hospitals have extensive experience and knowledge in providing quality, cost-effective care for these populations. The State shall include these essential community providers as contracted entities in any formulation of the state health care system. The inclusion of FQHC’s, RHC’s, and Rural Hospitals as contracted entities in the state health care system recognizes the importance of these providers to South Carolina and assures that the reimbursement to these essential community providers will be funded through cost-based reimbursement or a capitated fee based on reasonable costs.

(B) A hospital located in an urban area (MSA County), can be considered "rural" for the purposes of the Medicare Rural Hospital Flexibility Program if it meets the following criteria:

(1) enrolled as both a Medicaid and Medicare provider and accepts assignment for all Medicaid and Medicare patients;

(2) provides emergency health care services to indigent patients;

(3) maintains a twenty-four hour emergency room;

(4) staffs fifty or less acute care beds; and

(5) located in a county with twenty-five percent or more rural residents, as defined by the most recent United States decennial census.