A Critical Access Hospital (CAH) is a hospital certified to receive cost-based reimbursement from Medicare. The reimbursement that CAHs receive is intended to improve their financial performance and thereby reduce hospital closures. Each hospital must review its own situation to determine if CAH status would be advantageous. CAHs are certified under a different set of Medicare Conditions of Participation (CoP) that are more flexible than the acute care hospital CoPs.
CAHs must be located in a rural area with a minimum of 35 mile distance from another hospital.
CAHs may have a maximum of 25 acute care inpatient beds and must maintain an annual average length of stay of 96 hours or less for their acute care patients. There is no length of stay limit for swing bed patients.
Some benefits of conversion to CAH status include:
- Cost-based reimbursement from Medicare, which has the potential to increase revenues. As of January 1, 2004, CAHs are eligible for cost plus 1% reimbursement.
- Focus on community needs.
- CAH network with an acute care hospital for support.
- Flexible staffing and services, to the extent that state licensure laws permit.
- Capital improvement costs included in allowable costs for determining Medicare reimbursement.
- Access to Flex Program grant money.