


In 2000, Logan County Hospital was designated as a Critical Access Hospital. This
was needed to provide funding for revitalization of the healthcare resources of Logan
County.
The Critical Access Hospital Program was created by the 1997 federal Balanced
Budget Act as a safety net device, to assure Medicare beneficiaries access to health
care services in rural areas. It was designed to allow more flexible staffing options
relative to community need, simplify billing methods and create incentives to develop
local integrated health delivery systems, including acute, primary, emergency and
long-term care.
In Kansas, the Critical Access Hospital program is administered by the Kansas
Department of Health and Environment in close collaboration with the Kansas Hospital
Association.
Frequently Asked Questions About Critical Access Hospitals
Question: What is a Critical Access Hospital?
Answer: A Critical Access Hospital (CAH) is a hospital that is 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.
Question: How many CAHs are there and where are they located?
Answer: As of August 2007, there are 1,283 certified Critical Access Hospitals located
throughout the United States. The Flex Monitoring Team maintains a list of Critical
Access Hospitals which includes the hospital name, city, state, zip code and effective
date of CAH status. You can also view a map of CAHs.
Question: What is the Medicare Rural Hospital Flexibility Program and how is it related
to the CAH program?
Answer: The Medicare Rural Hospital Flexibility Program (Flex Program) was created
by the Balanced Budget Act of 1997 and is intended to strengthen rural health care by
encouraging states to take a holistic approach. A major requirement for participation
in the Flex Program is the creation of a state rural health plan. The Flex Program
provides grants to each state which are used to implement a Critical Access Hospital
program, to encourage the development of rural health networks, to assist with
quality improvement efforts, and improve rural emergency medical services. The Flex
Program promotes a process for improving rural health care, using the Critical
Access Hospital (CAH) program as one method of promoting strength and longevity
through CAH conversion for appropriate facilities.
Question: What types of facilities are eligible for CAH status?
Answer: Facilities applying to become Critical Access Hospitals must have a current
status as a licensed acute care hospital. Hospitals closed after 11/29/89 and
hospitals that have downsized to health clinic or health center status also may qualify
for CAH status if they meet all of the CAH Conditions of Participation.
Question: What are the location requirements for CAH status?
Answer: CAHs must be located in a rural area and meet one of the following criteria:
Over 35 mile distance from another hospital, or
15 miles from another hospital in mountainous terrain or areas with only secondary
roads
(Please see the September 7, 2007 letter from CMS to State Survey Agency Directors
titled Critical Access Hospitals (CAHs): Distance from Other Providers and Relocation
of CAHs with a Necessary Provider Designation for more detailed information on the
definition of mountainous terrain and secondary roads), or
State-certified as a necessary provider of health care services to residents in the
area. As of January 1, 2006, states will no longer have authority to waive the 35 mile
rule, due to a provision of the Medicare Prescription Drug Improvement and
Modernization Act (MMA).
Question: Can a CAH add an off-campus provider based entity that does not meet the
CAH distance requirements?
Answer: As of January 1, 2008, all CAHs, including necessary provider CAHs, that
create or acquire an off-campus provider-based facility such as a clinic, or a
psychiatric or rehabilitation distinct part unit, must meet the CAH distance
requirement of a 35-mile drive to the nearest hospital or CAH (or 15 miles in the case
of mountainous terrain). This provision excludes Rural Health Clinics, as defined
under 405.2401(b), from the list of provider-based facilities that must comply with this
requirement. Details about this requirement are available in a Final Rule published in
the November 27, 2007 issue of the Federal Register as part of the Medicare Program:
Changes to the Hospital Outpatient Prospective Payment System and CY 2008
Payment Rates. See Section XVIII. Changes Affecting Critical Access Hospitals (CAHs)
and Hospital Conditions of Participation (CoPs), starting on page 66877.
Question: What are the requirements for relocating an existing CAH under the
Necessary Provider replacement rules?
Answer: CAHs that have been granted Necessary Provider status and want to rebuild
in a new location that does not meet the distance requirements of the 35-mile rule will
be treated in the same manner as if they were building a replacement facility at the
previous location. The new CAH facility will have to continue to meet the same criteria
that led to its original state designation, serve at least 75% of the same service area,
offer 75% of the same services, and utilize at least 75% of the same staff in its new
location. See the September 7, 2007 letter from CMS to State Survey Agency
Directors titled Critical Access Hospitals (CAHs): Distance from Other Providers and
Relocation of CAHs with a Necessary Provider Designation for more detailed
information.
Question: What are the benefits of CAH status?
Answer: 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 and expansion of services.
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.
Question: Are all the benefits of CAH status available in every state?
Answer:
No. Not all CAHs may take advantage of the more flexible Medicare Conditions of
Participation (CoP) and the related cost savings. In states that license CAHs under the
same licensure rules as other hospitals, CAHs must comply with those licensure
rules. If those rules are stricter than the CAH CoP, the CAH is unable to benefit from
the Medicare flexibility. In addition, five states, Connecticut, Delaware, Maryland, New
Jersey and Rhode Island, do not participate in the Flex Program and therefore
hospitals in those states are not eligible for CAH status.
Question: Will CAH conversion guarantee a better financial return?
Answer: No. Some hospitals will find the cost-based reimbursement advantageous,
and some will not. Each hospital must perform its own financial analysis to determine
if CAH conversion would result in a better financial return. For financially distressed
hospitals, even if CAH conversion results in increased reimbursement, it may not put
the hospital "in the black." Some hospitals that have converted to CAH have since
closed.
Question: Will CAH conversion solve all the problems at our hospital?
Answer: No. The CAH program is a reimbursement status, and in some states CAH
status allows more flexible staffing and services. It will not address organizational
problems such as problems within the organization's culture, leadership, community
issues, and so on.
A hospital should convert to CAH status only if it is appropriate for the community
need and hospital service area. In particular, consideration should be given to the bed
limit for CAHs and whether that is a good match for community need.
Question: Is CAH conversion a downgrade for our facility?
Answer: No. CAH is a change in provider designation, not a downgrade. Conversion to
CAH status does not necessarily mean losing services. In some cases, hospitals that
have converted to CAH may even choose to expand their range of services to better
meet community needs.
Question: Is there a limit on the length of stay for patients at CAHs?
Answer: CAHs 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.
Question: How many beds are allowed?
Answer: CAHs may have a maximum of 25 beds. For CAHs with swing bed
agreements, any of its beds may be used for either inpatient acute care or swing bed
services. Any hospital-type bed located in or adjacent to any location where the bed
could be used for inpatient care counts toward the 25 bed limit.
Certain beds do not count toward the 25 bed limit, including examination or procedure
beds, stretchers, operating room tables, and others. For a complete list of beds that
do not count toward the 25 bed limit, please see Section C-0211, §485.620(a)
Standard: Number of Beds: Interpretive Guidelines of the CMS State Operations
Manual: Appendix W.
Question: What emergency services are CAHs required to provide?
Answer: CAHs must provide 24-hour emergency services, with medical staff on-site;
or on-call and available on-site within 30 minutes, 60 minutes if certain frontier area
criteria are met.
The staff on-site or on call must meet state licensure requirements, but Medicare
Conditions of Participation specify the coverage could be a doctor of medicine or
osteopathy, a physician assistant, a nurse practitioner, or a clinical nurse specialist,
with training or experience in emergency care. In certain very limited circumstances,
the coverage could be provided temporarily by a registered nurse.
As of October 1, 2007, CMS requires that any hospital, including a CAH, that does not
have a physician on site 24 hours per day, 7 days per week, provide a notice to all
patients upon admission. The notice must address how emergency services are
provided when a physician is not on site. For more information, please see page
47413 of the August 22, 2007 Federal Register notice, Medicare Program; Changes to
the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2008 Rates; Final
Rule.
Question: What kinds of agreements does a CAH need to have with an acute care
hospital?
Answer: A CAH must develop agreements with an acute care hospital related to
patient referral and transfer, communication, emergency and non-emergency patient
transportation. The CAH may also have an agreement with their referral hospital for
quality improvement or choose to have that agreement with another organization.
State networking requirements vary.
Question: How do staffing requirements differ for CAHs, compared to general acute
care hospitals?
Answer: There are two main ways that staffing requirements are more flexible for
CAHs under the Medicare Conditions of Participation (CoP):
Medical Staff: A CAH must have at least one physician, but he or she is not required to
be on-site. Midlevel practitioners can be an active, independent part of the CAH
medical staff and provide direct service to patients. CAHs are required to provide
oversight by a physician, but the oversight provisions are very liberal. This can be
especially useful in communities that have had difficulty recruiting physicians.
Nursing Staff: General acute care hospitals are required to have an RN on-site 24
hours a day, 7 days a week. CAHs have more flexibility regarding staffing levels for
nurses. The federal requirements allow for the hospital to close (and so have no RN
on staff) if the facility is empty. State requirements vary. Some states may offer
flexibility by allowing an LPN to cover a shift in place of an RN when there are no acute
patients, for example. Contact your state survey agency for details.
However, CAHs must continue to meet their state licensure laws if those are stricter
than the Medicare CoP.
Question: Are other requirements for CAHs different from those for general acute
care hospitals?
Answer: Except for the staffing flexibility mentioned above, requirements are very
similar for CAHs and general acute care hospitals. CAHs must meet the requirements
for the services they choose to provide. So, for example, if a CAH provides surgical
services, it must meet the relevant surgery requirements just as a general acute care
hospital would.
You may want to consult several sources to address questions you have about CAH
requirements. Some issues may vary from state to state based on state licensure
laws and other factors, and interpretation of the federal requirements is not always
straightforward. To find out more about your state's requirements, begin by
contacting your State Office of Rural Health.
Question: Does Medicaid provide special reimbursement to CAHs?
Answer: Each state decides if it will provide special reimbursement to Critical Access
Hospitals for Medicaid services. Consult your State Rural Hospital Flexibility Program
Contact for information about your state's policies.
Question: What are the quality assurance options for CAHs?
Answer: Critical Access Hospitals must have arrangements with respect to quality
assurance, either with a hospital that is part of a network, with another CAH, or a
private organization or through a credentialing body like The Joint Commission or the
American Osteopathic Association's Healthcare Facilities Accreditation Program. The
QA agreement includes credentialing, which can be a program review of the CAH
procedures or a core credentialing process, which is then used by the CAH to
privilege staff.
Question: How do provisions in the Medicare Prescription Drug Improvement and
Modernization Act (MMA) impact Critical Access Hospitals (CAHs)?
Answer: While there are many provisions in the Medicare Prescription Drug
Improvement and Modernization Act (MMA) that will impact CAH operations, there are
several provisions that specifically relate to CAHs. They are found in Section 405 of
the MMA. The provisions:
Increase CAH reimbursement to cost plus 1%;
Provide cost-based reimbursement for emergency room physician assistants, nurse
practitioners and clinical nurse specialists who are on-call;
Reinstate the Periodic Interim Payments (PIPs);
Expand eligibility for the Method Two/All-Inclusive payment for outpatient services
(which provides payments of physician fee schedule plus 15%) to any practitioner in
the CAH who assigns billing rights to the hospital;
Flexibility to designate up to 25 beds as acute care inpatient beds;
Permit CAHs to operate Psychiatric and/or Rehabilitation Distinct Part Units (DPUs) of
up to 10 beds; and
Eliminate the state authority to waive the 35-mile rule (effective January 1, 2006).
Thanks for contributions from:
Michelle Casey at the University of Minnesota Rural Health Research Center, Robert
Dockter at Eureka Community Health Services/Avera Health, Marjorie Eddinger at
CMS, Brad Gibbens and Kristine Sande at the University of North Dakota Center for
Rural Health, Karen Haskins at the North Dakota Healthcare Association, Terry Hill and
Tami Lichtenberg at TASC, Keith Mueller at the RUPRI Center for Rural Health Policy
Analysis, John Sheehan at BKD Healthcare Group-BKD, LLP, Bridget Weidner at the
North Dakota Department of Health.
Developed by: Maren Niemeier, maren@raconline.org
Last revised 10/22/2007

Logan County Hospital 211 Cherry Avenue Oakley, Kansas 67748
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What is a Critical Access Hospital?