Medicare Rural Hospital Flexibility Research Articles

Medicare Rural Hospital Flexibility Program (HRSA)

Medicare Rural Hospital Flexibility Program (HRSA)

Supporting Critical Access Hospital operational and financial improvement through the Medicare Rural Hospital Flexibility Program.

Supporting Critical Access Hospital operational and financial improvement through the Medicare Rural Hospital Flexibility Program.

Twenty-five years of the Medicare Rural Hospital Flexibility Program: The past as prologue.

The Medicare Rural Hospital Flexibility (Flex) Program and the Critical Access Hospital (CAH) provider type are now 25 years old. Since the inception of the program, the needs of CAHs have evolved greatly. This article describes the history of the limited-service hospital model that led to the creation of CAHs, the evolution and impact of the Flex Program on CAHs, and the trends likely to impact CAHs and rural healthcare in the future. It concludes with recommendations to address these future needs. This review of the 25-year history of the Flex Program and CAHs is based on a detailed analysis of the literature on the limited-service hospital model and CAHs, the evaluation reports of the Flex Tracking and Flex Monitoring Teams, and the author's 25-year history with the program. The Flex Program has made important contributions to the viability of rural hospitals through the conversion of 1,360 CAHs. The program has encouraged attention on CAH quality of care and the role of CAHs in addressing the population health needs of their communities. It has further encouraged the development of a robust rural health policy and advocacy infrastructure that has heightened attention on the needs of rural providers and communities. The needs of CAHs and rural delivery systems have evolved greatly since the implementation of the Flex Program. The 25th anniversary of the program is an ideal time to re-evaluate and update the program to support CAHs in adapting to the fast-changing healthcare environment.

25 years of Flex: Supporting states in maintaining rural access to care.

The Medicare Rural Hospital Flexibility (Flex) Program secured access to care for rural communities, through the creation of the Critical Access Hospital provider type, keeping hospitals open in many communities where they may have otherwise closed. The Health Resources and Services Administration's Federal Office of Rural Health Policy has worked in partnership with hospitals, State Offices of Rural Health, State Flex Program coordinators, researchers, and rural hospital finance and quality experts to direct the Flex Program to ensure rural communities have access to high-quality care. This article outlines the history of the Flex Program, its program framework and state-level implementation, and the ways the program aligns with other federal programs with similar goals.

Modernizing payment to critical access hospitals: A proposal for the next iteration of the Flex Program.

Modernizing payment to critical access hospitals: A proposal for the next iteration of the Flex Program.

Can amputation save the hospital? The impact of the Medicare Rural Flexibility Program on demand and welfare

This paper seeks to understand the impact of the Medicare Rural Hospital Flexibility (Flex) Program on hospital choice and consumer welfare for rural residents. The Flex Program created a new class of hospital, the Critical Access Hospital (CAH), which receives more generous Medicare reimbursements in return for limits on capacity and length of stay. We find that conversion to CAH status resulted in a 4.7 percent drop in inpatient admissions to participating hospitals, almost all of which was driven by factors other than capacity constraints. The Flex Program increased consumer welfare if it prevented the exit of at least 6.5 percent of randomly selected converting hospitals.

Developing Program Performance Measures for Rural Emergency Medical Services

ABSTRACTBackground: The development of measures to monitor and evaluate the performance and quality of emergency medical services (EMS) systems has been a focus of attention for many years. The Medicare Rural Hospital Flexibility Program (Flex Program), established by Congress in 1997, provides grants to states to implement initiatives to strengthen rural healthcare delivery systems, including better integration of EMS into those systems of care. Objective: Building on national efforts to develop EMS performance measures, we sought to identify measures relevant to the rural communities and hospitals supported by the Flex Program. The measures are intended for use in monitoring rural EMS performance at the community level as well as for use by State Flex Programs and the Federal Office of Rural Health Policy (FORHP) to demonstrate the impact of the Flex Program. Methods: To evaluate the performance of EMS in rural communities, we conducted a literature search, reviewed research on performance measures conducted by key EMS organizations, and recruited a panel of EMS experts to identify and rate rurally-relevant EMS performance measures as well as emergent protocols for episodes of trauma, ST Elevation Myocardial Infarction (STEMI), and stroke. The rated measures were assessed for inclusion in the final measure set. Results: The Expert Panel identified 17 program performance measures to support EMS services in rural communities. These measures monitor the capacity of local agencies to collect and report quality and financial data, use the data to improve agency performance, and train rural EMS employees in emergent protocols for all age groups. Conclusion: The system of care approach on which this rural EMS measures set is based can support the FORHP's goal of better focusing State Flex Program activity to improve program impact on the performance of rural EMS services in the areas of financial viability, quality improvement, and local/regional health system performance.

Interorganizational Relationship Trends of Critical Access Hospitals.

Examine the types of interorganizational relationships (IORs)--defined as formal linkages between 2 or more organizations to produce or coordinate some good or service--pursued by Critical Access Hospitals (CAHs), how these relationship patterns have changed over time, and how these relationships compare to non-CAHs. We used univariate analyses to describe the prevalence of different types of formal horizontal (eg, system affiliation) and vertical (eg, physician organization, nursing home ownership) relationships for CAHs over time (2002-2012) and chi-square tests to compare the prevalence of these relationships to non-CAHs. Contract management relationships were more prevalent among CAHs than other types of hospitals, and they declined over time for all types of hospitals. Network membership was more common among CAHs compared to rural, non-CAHs. Tightly integrated relationships with physician organizations were more common among CAHs, relative to rural, non-CAHs. Nursing home ownership was more prevalent among CAHs and rural, non-CAHs relative to urban, non-CAHs, but it declined over time for all hospital types. Our findings highlight a number of differences in the types of IORs pursued by CAHs relative to other types of hospitals and raise questions about the role of the Medicare Rural Hospital Flexibility Program in stimulating these differences. Our findings also suggest that even though the prevalence of hospitals engaging in any horizontal or vertical strategy was relatively stable, the fluctuations in the particular forms of these IORs were more dramatic.

Minimum-distance requirements could harm high-performing critical-access hospitals 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. Our study found that critical-access hospitals located within fifteen miles of another hospital generally are larger, provide better quality, and are financially stronger compared to critical-access hospitals located farther from another hospital. Returning to the PPS would have considerable negative impacts on critical-access hospitals that are located near another hospital. We conclude 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.

The impact of the Medicare Rural Hospital Flexibility Program on patient choice

This paper seeks to understand the impact of the Medicare Rural Hospital Flexibility (Flex) Program on rural resident hospital choice. The program created a new class of hospital, the Critical Access Hospital (CAH), which receives more generous reimbursement in return for limiting its beds and services. The program's goal is to maintain access to hospital care. Estimates from a patient choice model show that patient utility from visiting a hospital was negatively affected by conversion. While the lower bed capacity appears to play a minor role, the reduction in services results in a 28% drop in admission rates.

Economic Impact of the Critical Access Hospital Program on Kentucky's Communities

In 1997, the Medicare Rural Hospital Flexibility Grant Program created the Critical Access Hospital (CAH) Program as a response to the financial distress of rural hospitals. It was believed that this program would reduce the rate of rural hospital closures and improve access to health care services in rural communities. The objective of this paper is to analyze the economic impact of the CAH Program on Kentucky's communities. Both an economic input-output model and a quasi-experimental control group method are used in this research paper. While the analysis using the input-output model uses data from the year 2006, the analysis using the quasi-experimental control group method uses data from 1989 to 2006. The results indicate that the rural counties where a CAH was adopted did appear to benefit in economic terms relative to those that did not have a CAH.

The Presence of Ethics Programs in Critical Access Hospitals

The purpose of this study was to assess the presence of ethics committees in rural critical access hospitals across the United States. Several studies have investigated the presence of ethics committees in rural health care facilities. The limitation of these studies is in the definition of 'rural hospital' and a regional or state focus. These limitations have created large variations in the study findings. In this nation-wide study we used the criteria of a critical access hospital (CAH), as defined by the Medicare Rural Hospital Flexibility Program (Flex Program, 2007), to bring consistency and clarity to the assessment of the presence of ethics committees in rural hospitals. The Flex Monitoring Team conducted a national telephone survey of 381 CAH administrators throughout the United States. The survey covered a wide variety of questions concerning hospitals' community benefit, impact activities, and whether the hospital had a formally established an ethics committee. About 230 (60%) of the respondents indicated they had a formally established ethics committee or ethics consultation program at their CAH. The prevalence of ethics committees declined as the CAH location became increasingly rural along a rural-urban continuum. Unlike CAHs, all rural Department of Veterans Affairs Medical Centers have ethics committees. The results of this study provide an understanding of the limited presence of ethics committee in rural America and the need to consider new approaches for providing ethics assistance. A virtual ethics committee network may be the most efficient and effective way of providing rural hospitals access to a knowledgeable ethics committee or consultant.

Inefficiency Differences between Critical Access Hospitals and Prospectively Paid Rural Hospitals

The Medicare prospective payment system (PPS) contains incentives for hospitals to improve efficiency by placing them at financial risk to earn a positive margin on services rendered to Medicare patients. Concerns about the financial viability of small rural hospitals led to the implementation of the Medicare Rural Hospital Flexibility Program (Flex Program) of 1997, which allows facilities designated as critical access hospitals (CAHs) to be paid on a reasonable cost basis for inpatient and outpatient services. This article compares the cost inefficiency of CAHs with that of nonconverting rural hospitals to contrast the performance of hospitals operating under the different payment systems. Stochastic frontier analysis (SFA) was used to estimate cost inefficiency. Analysis was performed on pooled time-series, cross-sectional data from thirty-four states for the period 1997-2004. Average estimated cost inefficiency was greater in CAHs (15.9 percent) than in nonconverting rural hospitals (10.3 percent). Further, there was a positive association between length of time in the CAH program and estimated cost inefficiency. CAHs exhibited poorer values for a number of proxy measures for efficiency, including expenses per admission and labor productivity (full-time-equivalent employees per outpatient-adjusted admission). Non-CAH rural hospitals had a stronger correlation between cost inefficiency and operating margin than CAH facilities did.

Effect of Critical Access Hospital Conversion on Patient Safety

The Medicare Rural Hospital Flexibility Program of the 1997 Balanced Budget Act allowed hospitals meeting certain criteria to convert to critical access hospitals (CAH) and changed their Medicare reimbursement mechanism from prospective payment system (PPS) to cost-based. To examine the impact of CAH conversion on hospital patient safety. Secondary data on hospital patient safety indicators (PSIs), hospital CAH status, patient case-mix, and market variables, for 89 Iowa rural hospitals during 1997-2004. We employed quasi-experimental designs that use both control groups and pretests. The hospital-year was the unit of analysis. We used generalized estimating equations logit and random-effects Tobit models to assess the effects of CAH conversion on hospital patient safety. The models were adjusted for patient case-mix and market variables. Sensitivity analyses, which varied by sample and statistical model, were used to examine the robustness of our findings. PSIs were computed from Iowa State Inpatient Databases (SIDs) using Agency for Healthcare Research and Quality indicators software. Hospital CAH status was extracted from Iowa Hospital Association. Patient case-mix variables were extracted from Iowa SIDs. Market variables came from Area Resource File (ARF). CAH conversion in Iowa rural hospitals was associated with better performance of risk-adjusted rates of iatrogenic pneumothorax, selected infections due to medical care, accidental puncture or laceration, and composite score of four PSIs, but had no significant impact on the observed rates of death in low-mortality diagnosis-related groups (DRGs), foreign body left during procedure, risk-adjusted rate of decubitus ulcer, or composite score of six PSIs. Conclusion. CAH conversion is associated with enhanced performance of certain PSIs.

Illness severity and propensity to travel along the urban–rural continuum

In this paper, we examine whether the relationship between severity of illness and the propensity to travel greater distance relative to the norm (defined by peers in one's county of residence) is uniform across the urban–rural continuum of geography or over time. We focus on the elderly in New York State who have been admitted to hospital for ambulatory care sensitive conditions (ACSCs), admissions which are presumed to be representative of usual travel patterns. The two periods of time examined span the implementation of the Balanced Budget Act (BBA) of 1997, which established the Medicare Rural Hospital Flexibility Program, a major national initiative to strengthen rural health care with the development of rural Critical Access Hospitals (CAHs). As the number of NY rural hospitals certified as CAH increased with the expanded funding from the BBA, one might expect to see increased distance traveled by more severely ill rural elderly, as their CAHs referred them to their affiliated support hospitals. The logistic regression estimates support this expectation, highlighting an asymmetrical relationship between relative distance and severity across patients in rural and urban areas. Despite a general decline in average propensity to travel further than the norm across the landscape, severity had a larger impact on travel propensity in rural areas, which increased over time.

The Efficiency Incentives of Medicare's Rural Hospital Flexibility Program

The Efficiency Incentives of Medicare's Rural Hospital Flexibility Program

Quality Improvement Strategies and Best Practices in Critical Access Hospitals

Critical access hospitals (CAHs) face many challenges in implementing quality improvement (QI) initiatives, which include limited resources, low volume of patients, small staffs, and inadequate information technology. A primary goal of the Medicare Rural Hospital Flexibility Program is to improve the quality of care provided by CAHs. This article describes key quality improvement initiatives for a national sample of CAHs that are actively involved in implementing quality-related initiatives in collaboration with support hospitals and statewide organizations. Researchers conducted a national telephone survey of 72 CAHs and 2 in-depth case studies of CAHs. The survey and case studies demonstrate that many CAHs are successfully implementing QI activities, including patient safety initiatives, improvements in overall QI processes and peer review processes, and implementation of QI projects focused on treatment of 1 or more specific diseases. The CAHs are involved with multiple external organizations in these activities. The administrators of the 2 case study CAHs have made QI a priority for their hospitals; ensured that resources are available for QI activities; and worked with their support hospitals, statewide organizations, and other CAHs to develop and implement rural-relevant QI initiatives. Cost-based Medicare reimbursement has been a key factor in the ability of CAHs to fund additional staff, staff training, and equipment to improve patient care. The commitment of hospital leaders and key staff is a crucial factor in moving QI initiatives forward in CAHs.

Impact of conversion to critical access hospital status for Oklahoma's rural hospitals.

The Medicare Rural Hospital Flexibility Grant Program established a new hospital category, the Critical Access Hospital, designed to provide financial stability to small rural hospitals that were losing money after changes in the Prospective Payment System implemented by Medicare. This article describes the impact of conversion to Critical Access Hospital (CAH) status for 15 small rural hospitals in Oklahoma. Objectives of the study were to identify how conversion to CAH affected hospital utilization and finances for the first year after conversion. A telephone survey was used to collect information from hospital administrators. Fifteen of 16 eligible hospitals participated in the study. In general, services and patient census declined slightly with conversion to CAH. All 15 hospitals had reported losses prior to conversion, totaling $6,985,033. Ten hospitals reported losses after conversion. After converting to CAH status, the hospitals reported total losses of $3,094,547. The hospitals had a net change of $4,293,040. Most of the 15 study hospitals greatly improved their financial situation in the first year after conversion to CAH status, but in aggregate still operated at a loss.

Critical access hospitals: rural nursing issues.

Critical Access Hospitals (CAHs) are a recent federal initiative to address the fiscal concerns of small rural hospitals and improve access to healthcare for rural residents. A national effort exists to examine the outcomes of this federal initiative, but there is a paucity of information about nursing in CAHs. This pilot study, using survey techniques, examined rural nurses' perceptions of CAH conversion. The authors discuss the authorizing legislation, Medicare Rural Hospital Flexibility Program (MRHFP), and highlight survey findings on nurses' perceptions about hospitals that converted to CAH status. The information can be used by nursing administrators and educators to prepare nurses to work in CAHs that are located in more remote areas of the United States.

Critical access hospitals: how many rural hospitals will meet the requirements?

Although the Medicare Rural Hospital Flexibility Program (MRHFP), which establishes a new designation for limited-service hospitals called critical access hospitals (CAH), intends to assist small rural hospitals having financial difficulty, it is unclear how many hospitals will qualify for the program. Potential CAHs are identified and the strategic issues that will impact actual participation in the program are discussed. Potential CAHs are identified by applying the legislative criteria for designation to a data set created from both the 1992-1995 Medicare Hospital Cost Report Information System and the 1993 and 1995 Prospective Payment System's Impact files. Descriptive analyses are used to identify potential CAHs by three parameters: distance to nearest hospital, average daily census and operating margin. Results indicate that the majority of potential CAHs have low volume and report poorer operating margins than other rural hospitals. Findings also show that the mileage requirements significantly impact the number of potential CAHs. There is more than a ninefold difference between the 93 hospitals that meet the mileage criterion and the 864 hospitals that might be eligible if certified by the state as "necessary providers," regardless of distance to the nearest hospital. The MRHFP is designed to prevent small, isolated hospitals from closing and thus to ensure continued access to care for rural residents. However, the number of potential CAHs that participate will clearly hinge on the flexibility of the program and the ability of states to determine "necessary providers."