Critical Access Hospitals (CAH)

The Critical Access Hospital (CAH) program is a federal designation given to health care facilities that met certain federal criteria. The program was established through legislation enacted as part of the Balanced Budget Act (BBA) of 1997 through the State Medicare Rural Hospital Flexibility Program (Flex). The criteria include:

• Located in a state with an established FLEX program;
• Located in a rural area or be treated as rural under federal guidelines;
• Provide 24-hour emergency care services;
• Furnish no more than 25 inpatient beds (this includes no more than 15 acute care beds and 10 swing beds);
• Possess a length of stay averaging no more than 96 hours; and
• Geographic conditions. 

The primary benefit of the CAH program is that designated health care facilities are exempt from the prospective payment system (PPS) and receive cost-based reimbursement for most Medicare beneficiary inpatient and outpatient services at 101 percent of their allowable and reasonable costs. This enables small rural hospitals to:

• Maintain quality access to primary and emergency health care services;
• Offer adequate health care services that meet the needs of the community citizens (such as radiology, laboratory services, outpatient rehab and surgery; and
• Assist in ensuring financial viability of small rural hospitals through enhanced reimbursements.    

Virginia currently has seven (7) designated CAH facilities:

Bath County Community Hospital in Hot Springs

Carilion Giles Memorial Hospital in Pearisburg

Dickenson Community Hospital in Clintwood

R.J. Reynolds-Patrick County Memorial Hospital in Stuart

Page Memorial Hospital in Luray

Shenandoah Memorial Hospital in Winchester

Carilion Stonewall Jackson Hospital in Lexington