Critical Access Hospital (CAH)

How It Works

Critical Access Hospital designation was created in 1997 to prevent rural hospital closures. CAHs must have 25 or fewer acute care beds, be located more than 35 miles from the nearest hospital (or 15 miles in mountainous areas), provide 24/7 emergency services, and maintain an average length of stay of 96 hours or less. In exchange, CAHs receive cost-based reimbursement from Medicare (101% of reasonable costs) rather than the DRG-based fixed payments that other hospitals receive. There are approximately 1,350 CAHs in the United States, mostly in the Great Plains, Mountain West, and Deep South. Despite the cost-based reimbursement, many CAHs operate on thin margins due to low patient volumes and workforce challenges.

Related Terms

• Teaching Hospital — A hospital affiliated with a medical school that trains resident physicians — typically larger, more complex, and higher-cost than community hospitals, but often offering more advanced care.
• Centers for Medicare & Medicaid Services (CMS) — The federal agency that administers Medicare, Medicaid, and the ACA marketplace — setting hospital payment rates, quality standards, and the data that HospitalCostData uses.