25th Anniversary of Critical Hospital Designation: Helping Keep Rural Hospitals Open

This year Montana saw its population grow to more than 1.1 million residents, with more than 720,000 living in designated rural areas. The viability of our rural hospitals has become essential to the growth of our smallest communities and our state’s system of care.

As we look to the future, it’s important we acknowledge the work done to strengthen our rural hospitals. This year marks the 25th anniversary of the Critical Access Hospital (CAH) designation, legislation spearheaded by Montana’s U.S. Senator Max Baucus to help ensure the financial viability of our nation’s smallest hospitals. The Montana Hospital Association (MHA) is proud of its role in building the foundation for the CAH designation through its 11-year management of the Medical Assistance Facility demonstration. This collaborative revealed highly successful delivery approaches that led to the creation of the Critical Access Hospital designation. The CAH designation has supported Montana’s 49 critical access hospitals, three of which reopened because of the designation.

This solution sprang from congressional debates 25 years ago, following the closure of more than 400 hospitals during the 1980s and 1990s. It was a truly bipartisan effort to save our rural and frontier hospitals. The CAH legislation reduced the financial vulnerability of rural hospitals, improved quality, while also improving access to health care by protecting essential services for rural communities. Not only is this significant in terms of protecting access to care, but it supports local economies. For most of our frontier towns in Montana and around the country, the local hospital is the largest employer and serves as the health care safety net for the community.

Included in the CAH program created by Congress is Medicare’s Rural Hospital Flexibility (FLEX) Program, which MHA’s foundation has managed in collaboration with our state for the past 25 years. In this role, we have established operational support to both stabilize rural hospital finances while integrating emergency medical services into existing health systems. Our work has allowed MHA to build a team of subject matter experts to assist participating hospitals with quality improvement, data collection, and reporting to meet federal and state requirements. Administrating the Flex program has allowed our foundation to engage all CAHs in workplan development and ensures emerging needs and trends are addressed.

Policy recommendations developed by MHA’s membership to strengthen CAH finances have been transformational. Medicaid expansion and creation of a Medicaid supplemental payment program, stacked upon the CAH designation, has ensured the financial viability of our hospitals. With more than half of our CAH facilities generating fewer net patient revenues than the revenues generated by your neighborhood Home Depot, we must continue to evolve our approaches.

MHA’s work elevated the voices of rural America in the face of health care policy that oftentimes can be very urban-focused. Our nation’s rural providers continue to experience financial and operational pressures. The challenges are even more acute in frontier communities, where population and services are even more sparse. Payer behaviors, workforce needs, aging facilities and the sustainability of long-term care providers are among the biggest challenges today. Innovation is key to finding solutions to these pressures, and engagement by policymakers and state and federal lawmakers is essential.

MHA’s work and the efforts by state hospital associations across the country to advocate on behalf of rural hospitals has had generational impact on our rural and frontier communities. As we celebrate the 25th anniversary of the Critical Access Hospital designation, let us take time to acknowledge the work of all rural health care advocates and the work yet to be done to ensure the viability of our rural hospitals and the communities they serve. Together we can advance better health and health care in rural America.

Rich Rasmussen is the former president and CEO of the Montana Hospital Association. 

The opinions expressed by the author do not necessarily reflect the views of the American Hospital Association.