Requiring critical access hospitals that are less than 15 miles from another hospital to revert to the hospital prospective payment system would generate modest savings for Medicare but likely be disruptive to the communities that depend on these hospitals for their health care, according to a study in the April issue of Health Affairs. “A substantial reduction in financial support could lead to a renewal of the high rural hospital closure rates of the 1990s, with concomitant deleterious effects on the health of those communities,” the authors said. The study also found that patients were more likely to receive certain recommended care at CAHs located less than 15 miles from another hospital. The CAH program provides cost-based reimbursement to low-volume hospitals whose Medicare costs exceed prospective payment system rates. Several changes to CAH eligibility have been proposed, most focused on mandating that hospitals be located a certain minimum distance from the nearest hospital. Initially, CAHs were required to be more than 35 miles from the nearest hospital, or more than 15 miles in areas with mountainous terrain or only secondary roads. From 1997 through December 2005, states could waive the distance requirements for hospitals designated by the governor as “necessary providers” of health care services. Since 2006, new CAHs must meet the distance requirements, but existing necessary provider CAHs have been allowed to remain in the program.

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