What Is a Critical Access Hospital? Overview and FAQ
Critical access hospitals (CAHs) serve as essential healthcare access points for many rural Americans. Accredited by the Centers for Medicare and Medicaid Services (CMS), critical access-designated facilities now account for nearly half of all rural hospitals. However, federal support comes at a cost. CAH facilities must adhere to strict operational guidelines and face unique challenges in an evolving healthcare landscape.
If you’re considering applying for critical access status, or you’re curious about what types of services CAHs provide, we’ve got answers. Learn more about this crucial rural lifeline with our helpful overview, addressing many key questions about the program.
The Critical Access Hospital: Definition and Brief Overview
The critical access program originated from legislation within the Balanced Budget Act of 1997 as a key feature of the State Medicare Rural Hospital Flexibility Program (or Flex). The effort to preserve local access to healthcare services via increased federal support was in response to large-scale rural facility closures. The ethical considerations of the program are clear — so, let’s consider some of the less-obvious benefits in addition to potential drawbacks:
| Financial Viability. Federal support with increased CMS reimbursement helps sustain operations where patient volume isn’t adequate for meeting healthcare costs.
Regulatory Exemptions. CAH facilities may benefit from reduced regulatory burden, like being exempted from the CMS quality reporting program or (in Alabama, for example) certificate of need requirements. Operational Flexibility. More permissive staffing requirements — like the use of non-physician providers in certain settings — can help alleviate recruitment and retention burdens. |
Staffing Challenges. Rural areas may face more difficulty with recruiting quality staff, and face consistent shortages with high turnover rates.
Resource Constraints. Studies have demonstrated that due to fewer clinical and technological resources, patients treated at CAHs often experience worse outcomes. Eligibility Restrictions. strict criteria for maintaining eligibility status can inhibit a facility’s ability to adapt to community-required changes and operate sustainably. |
Critical Access Designation for Hospitals: FAQ
The policy rationale that guides the eligibility restrictions for CAHs is most likely rooted in the effort to ensure that facilities remain available for underserved populations while keeping healthcare costs in check. Here, we’ll break down some of the program rules and expand on your understanding of this specific type of hospital.
How do CAH facilities differ from other hospitals?
The standards for accreditation and operational restrictions make up the difference between critical access-designated facilities and other hospitals. For example, a privately-owned hospital can set up operations in a rural or urban area as long as they receive regulatory approval (through a certificate of need, for instance). However, CAHs may only operate rurally.
What are the CMS guidelines for critical access hospital requirements?
CMS sets the conditions of participation (COP) that provide the basis and scope of critical access designation. These parameters include:
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| Facility Considerations | Facilities must be one of the following:
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| Location Requirements | Locations for CAHs must be:
Or
*Relocations are allowed only if the new facility continues to serve at least 75% of the same service area, with a minimum of 75% of the same services, and is still staffed by 75% of the same staff. |
| Service Parameters | Service-related parameters include:
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| Staffing Considerations | Staffing considerations:
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What are critical access hospitals’ standard service offerings?
Some of the CAH services that rural patient populations may benefit from include:
- Availability of emergency care, which is a stipulation of CAH designation.
- Acute care via inpatient management (like stroke management or congestive heart failure treatments) — limited to 25 inpatient beds with stays not exceeding 96 hours on average per year.
- Transitional care via swing services (such as post-surgical wound care).
- Rehabilitation and psychiatric care (each limited by 10-bed capacity maximums).
- Provision of hospice care (if agreed upon with a participating hospice service).
- Diagnostic services such as laboratory and radiology.
- Obstetrical care.
- Mental health and counseling.
- Primary care.
- Telehealth.
- Dietary and nutrition services.
Do CAHs offer specialized services?
Yes, many CAHs offer specialty clinics and services. Examples of these specialty services may include obstetrical care, orthopedics, cardiology, and gastroenterology.
How are CAH facilities funded?
CAH facilities fund operations via a blend of sources, from insurance reimbursement to governmental assistance.
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| Medicare Reimbursement | Critical access hospital reimbursements from Medicare are cost-based (meaning, it covers the actual incurred cost at 101% of the reasonable and allowable costs) because CAH facilities are exempt from prospective payment systems. |
| Private Insurance and Medicaid Billing | Patients treated in CAHs can apply their employment-sponsored insurance or Medicaid to cover services. In fact, Medicaid provides a significant amount of coverage for people living in rural areas and nearly 50% of rural births are covered by Medicaid. |
| Government Grants | Federal and state can help supplement rural healthcare costs for CAHs. The National Health Resources and Service Administration’s Flex program serves 1,360 critical access-designated hospitals across the U.S. Virginia has a similarly-titled program, providing funds to improve technological resources and assist quality improvement measures in its CAHs. |
How do providers apply for CAH status?
After verifying that your facility meets eligibility requirements for CAH status, you must make sure to receive additional confirmation from your state level Office of Rural Health and Flex program. If conditions are met, you can apply for critical access designation through Medicare, which will host an on-site survey to determine whether to approve or deny your request.
Does CMS require critical access facilities to recertify? How often?
The Center for Improvement in Healthcare Quality (CIHQ), which is a CMS-approved accrediting organization, surveys participating organizations every three years. Likewise, CMS recertifies the distance criteria for CAHs every three years using a specific checklist to ensure restrictions are still met.
Can a CAH lose its designation status?
Yes. To maintain CAH status, a facility must comply with the program restrictions even after it receives official designation as a critical access point.
Is there a publicly available list of critical access hospitals by state?
The Flex Monitoring Team (composed of researchers from several collaborating academic institutions) — funded by the Federal Office of Rural Health Policy — has compiled a complete list of U.S. CAHs, which can be filtered by state.
Stay Ahead of State and Federal Regulatory Changes
Whether you’re looking for the latest payment models from CMS, critical access hospital requirements, or certificate of need information, IntelyCare has you covered. We make regulatory changes understandable with facility guides and healthcare updates that don’t take hours to digest.