(1) A facility shall be eligible to apply for a license as a rural emergency hospital if such facility is:

(a) Licensed as a critical access hospital;

(b) Licensed as a general hospital with not more than fifty licensed beds located in a county in a rural area as defined in section 1886(d)(2)(D) of the federal Social Security Act; or

(c) Licensed as a general hospital with not more than fifty licensed beds that is deemed as being located in a rural area pursuant to section 1886(d)(8)(E) of the federal Social Security Act.

(2) A facility applying for licensure as a rural emergency hospital shall include with the application:

(a) An action plan for initiating rural emergency hospital services, including a detailed transition plan that lists the specific services that the facility will retain, modify, add, and discontinue;

(b) A description of services that the facility intends to provide on an outpatient basis; and

(c) Such other information as required by rules and regulations adopted and promulgated by the department.

(3) A rural emergency hospital shall not have inpatient beds, except that such hospital may have a unit that is a distinct part of such hospital and that is licensed as a skilled nursing facility to provide post-hospital extended care services.

(4) A rural emergency hospital may own and operate an entity that provides ambulance services.

(5) A licensed general hospital or critical access hospital that applies for and receives licensure as a rural emergency hospital and elects to operate as a rural emergency hospital shall retain its original license as a general hospital or critical access hospital. Such original license shall remain inactive while the rural emergency hospital license is in effect.