By Jenny Gold, Kaiser Health News
What is a critical access hospital?
Critical access hospitals are supposed to be small, rural facilities that receive a higher Medicare reimbursement rate to help keep them afloat. But not all of them fit that description, and they’re not always “critical.” More than 1,300 facilities – nearly one in four acute care hospitals – have been designated as critical access, and some are neither rural nor isolated.
The critical access program was created by Congress in 1997, after a wave of rural hospital closures, to make sure Americans in isolated areas would still have access to health care. Hospitals with 25 or fewer beds that are at least 35 miles away from another facility, or 15 miles across secondary roads to account for difficult terrain such as mountains, rivers or snow, can qualify. The Medicare Payment Advisory Commission (MedPAC) estimates that in 2003, Medicare paid hospitals in the program an average of $850,000 more than the agency otherwise would have.
But there was a loophole: States could waive the distance requirement and designate small hospitals considered “necessary providers” as critical access hospitals as well, even if they were close to other facilities. Governors were eager to provide their small, struggling facilities with extra federal dollars, and the program spread quickly.
Congress eliminated that exception in 2006 and growth slowed, but hospitals that had already been given the designation were grandfathered. Recently, several proposals floating around Washington, including one from President Obama, recommend narrowing the definition to help weed out some of the spending from the program.
When “critical access” hospitals are not so critical, Jenny Gold, Kaiser Health News
Resources
Financial data from IRS 990 forms about nonprofit hospitals
Digging into hospital finances (Karl Stark presentation)
Reporting on the business of health care
HHS hospital mortality and readmission data
Analyze patient satisfaction surveys to evaluate local hospitals
CMS factsheet on critical access hospitals
Sometimes these hospitals are the backbone of a small town, and one of the largest employers. Many local residents are loyal patients and can’t imagine going anywhere else for care.
But it’s also interesting to note that a recent study in the Journal of the American Medical Association found that hospitals in the critical access program tend to provide lower quality care than other hospitals. They are also less financially efficient than other facilities, according to a 2010 study published in the Journal of Health Politics, Policy and Law, because they are paid based on their total cost and do not have as much of an incentive to achieve savings.
What to look for
If there’s a critical access hospital in your area, find out when it was designated and whether it fits the original program criteria. If not, would it lose critical access status under the proposed changes? What would that mean for the facility?
How is the hospital doing? Check the 990s to find out whether it’s losing money. Ask for census rolls to find out how often the hospital is full.
Who are the hospital’s competitors—where else are patients seeking care? Are they going to larger facilities with more specialists and high-tech equipment? If quality data is available, it might be interesting to compare the facilities.
Talk to people in the community and patients at the hospital. Why do they choose this hospital? Have they considered going elsewhere and how long would it take to get there?
Chances are that the CEO and others at the hospital will have very strong feelings about the program, which is often keeping the hospital afloat. What would it mean for the hospital and the community if things changed?
Jenny Gold is a staff writer for Kaiser Health News. She was previously a Kroc Fellow at NPR, where she covered health and business, and a broadcast associdate at CBS Evening News.
