A CAH is a hospital that is certified to receive cost-based reimbursement from Medicare. The reimbursement that CAHs receive is intended to improve their financial performance in order to reduce hospital closures. Each hospital must review its own unique situation to determine if becoming a CAH would be beneficial. CAHs are certified under a different set of Medicare Conditions of Participation which are more flexible than the acute care hospital Conditions of Participation.
The following is a list of criteria that a hospital must meet in order to be considered a CAH:
- Located in a state that has a State Flex Program
- Designated by the State as a CAH
- Located in a rural area
- Provide 24-hour emergency care services
- Provide no more than 25 inpatient beds; a CAH can also operate a rehabilitation or psychiatric unit with up to 10 beds
- Have an average annual length of stay of 96 hours or less
- Located more than 35 miles from the nearest hospital or CAH (or more than 15 miles in areas with mountainous terrain or only secondary roads)
- Participate in Medicare
In addition to receiving cost-based reimbursement from Medicare, some other advantages of becoming a CAH are having access to Flex Program grant funds, flexible staffing and services, and having the CAH network with acute care hospitals for support.