The Medicare Critical Access Hospital Program: The First Year

The Medicare Critical Access Hospital (CAH) program, part of the Balanced Budget Act of 1997, is a nationwide limited service hospital program. Structured interviews were conducted in August and September 1998 with key people in state offices of rural health, state hospital associations, departments of health or departments of facility licensing in all 50 states to assess their progress in the development of the CAH program. The majority of states expressed interest in the CAH program. Twenty-one states were moving formally toward involvement in the program. States that had developed or were in the process of developing a state plan estimated that between 183 to 227 hospitals would convert to CAHs in the next one to two years. States that were the most successful with plan development appeared to be states that participated in the Essential Access Community Hospital/Rural Primary Care Hospital program, states where there was dialogue about the possibility of a limited service hospital program and states with widespread support in the state. A pressing need for most states is for reliable fiscal consulting or analysis that could be applied to individual hospitals that are considering conversion to CAHs. The CAH program shows promise for successful implementation based on its early results.