The Critical Access Hospital (CAH) is a limited-service design that serves as an opportunity for small, rural hospitals to increase revenues through cost-based reimbursement from Medicare and to have a greater flexibility in their delivery of service. Most hospitals that elect to be a CAH have a Medicare patient mix of greater than 60% and find that business has shifted from inpatient to outpatient. However, conversion to a CAH does not necessarily result in financial improvements and is not economically viable for every rural hospital.

CAH criteria are as followes:

• Be a licensed acute care hospital
• Be located in a rural designated area
• Be certified by the state as a Necessary Provider of Health Services
• Have a maximum of 15 acute care beds or 25 total, if the hospital has a swing bed program
• Maintain an annual average inpatient stay of 96 hours
• Have a transfer agreement to accommodate inpatient transfer and referral
• Have 24-hour emergency services
• Have credentialing and quality assurance arrangements with a member of a health network or the hospital has its own free-standing program