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Minimum Distance Requirements Could Harm High-Performing CAHs and Rural Communities

Since the inception of the Medicare Rural Hospital Flexibility Program in 1997, over 1,300 rural hospitals have converted to critical access hospitals, which entitles them to Medicare cost based reimbursement instead of reimbursement based on the hospital prospective payment system (PPS). Several changes to eligibility for critical access status have recently been proposed. Most of the changes focus on mandating that hospitals be located a certain minimum distance from the nearest hospital. The article concludes that establishing a minimum distance requirement would generate modest cost savings for Medicare but would likely be disruptive to the communities that depend on these hospitals for their health care.

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