The Department of Health and Human Services (HHS) is expanding CMS’ Rural Community Hospital Demonstration. The action is being taken as part of the Affordable Care Act and will set up 20 additional hospitals in states eligible for improved reimbursement for patient services. To participate, these small community hospitals serving rural areas must be located in states with low population density, including Alaska, Arizona, Arkansas, Colorado, Idaho, Iowa, Kansas, Maine, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah or Wyoming.
The hospitals - which must be located in a rural area - can have no more than 51 beds, provide emergency-care services and must not be a designated critical-access facility. According to HHS, the goal is to test “the feasibility and advisability of cost-based reimbursement for small rural hospitals that are too large to be critical access hospitals. In recent years, hospitals in this category have experienced negative Medicare margins on inpatient services. CMS is conducting an extensive evaluation of the demonstration, testing the benefits to the community and financial impact on participating hospitals.”
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