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What is a Critical Access Hospital?


Federal legislation enacted in 1997 authorized states to establish CAHs in rural communities in order to assure the economic viability and quality of medical care in rural communities. These facilities are limited service facilities with flexible staffing and service requirements

Critical Access Hospital Requirements

  • Maintain no more than 25 beds
  • Keep patients hospitalized no more than an average of 96 hours
  • Provide 24 hour emergency care

CAHs are licensed by the state and assigned a Critical Access Hospital Medicare reimbursement designation. This is key because Rural Health Clinics (including Inter Island Medical Center) are reimbursed as a doctor’s office visit. CAHs receive 101% cost reimbursement for all in and outpatient services provided to Medicare beneficiaries. This often results in a doubling or tripling of the reimbursement paid by Medicare for each service type. Better reimbursement means more monies available for serving all patients in the facility.

Higher reimbursement directly translates into quality staff, state-of-the-art equipment and significantly increased medical services while maintaining financial sustainability.