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Critical Access Hospitals

Mission Statement: Working as partners in fostering an integrated, dynamic, yet sustainable rural healthcare system that provides the highest quality of care

States may designate a facility as a CAH if it meets the conditions of participation as required by Centers for Medicare and Medicaid Services. A hospital must meet the following criteria to be designated a CAH:

• Located in a rural area
• Certified by the state as being a "necessary provider" of health care services to residents in the area (this provision's sunset date was January 1, 2006).
  Note: No hospitals can be designated in the future under current regulations
• Provide 24-hour emergency care services
• Average length of stay of 96 hours or less
• Operate up to 25 beds for acute inpatient care, subject to the 96-hour length of stay
• For CAHs with swing bed agreements, any of its beds may be used to furnish either inpatient acute care or swing bed services

Medicare pays CAHs for inpatient and outpatient services on the basis of their current Medicare allowable costs or "cost-based reimbursement".

• CAHs are exempt from the inpatient and outpatient prospective payment systems
• Capital improvement and equipment costs may be included in the Medicare cost report
• Reimbursement is based on 101 percent of the CAH's reasonable costs

CAHs may establish psychiatric units and rehabilitation units that are distinct parts (DP) of the hospital; each unit may have up to 10 beds that do not count against the CAH inpatient bed limit. Distinct Part Units are paid under the prospective payment system.