In the 1980’s and early 1990’s, a large string of hospital closures forced the United States Congress to respond. They chose to write and enact the Balanced Budget Act in 1997, which designated certain rural hospitals as Critical Access Hospitals (CAH) recognized by the Centers for Medicare and Medicaid Services (CMS).
Designed to reduce financial vulnerability, the CAH designation also increases healthcare access for rural Americans by supporting essential services in those communities. The support for this type of hospital is given in the form of cost-based Medicare reimbursement.
Requirements for CAH Status Designation
There are several restrictions regarding the kind of hospital that can be considered a Critical Access Hospital. These requisites are designed to ensure that the hospital to be designated as a CAH can deliver the services to the rural area adequately.
To be considered eligible to become a CAH, the hospital must first and foremost be a current participate in Medicare services regardless of any other status. A hospital vying for CAH designation must:
- Have 25 or fewer acute care inpatient beds
- Be located more than 35 miles from another hospital
- Maintain an annual average length of stay of 96 hours or less for acute care patients
- Provide 24/7 emergency care services
The above list is a severely truncated one. You can find the full list of requirements for CAH status on the Centers for Medicare and Medicaid Services website.
Benefits of CAH Status
There are more benefits to this designation than the cool title. For starters, reimbursement for certain services is provided. The reimbursement is given as cost plus a 1 percent increase, which may lead to increased revenue. One of the services eligible for reimbursement is ambulance uses within 35 miles of the hospital — a welcome boon, to be sure.
A beneficial side effect of one of the requirements, that a CAH must network with an acute care hospital, is that support is readily available. The acute care hospital can take transfer patients and referrals, which can help spread the load of patients across multiple hospitals.
The full list services eligible for reimbursement from Medicare can be found on the CMS website.