Critical Access Hospitals

Minnesota's ability to designate hospitals less than 35 miles apart as "necessary providers" for Critical Access Hospital designation expired December 31, 2005. Because of this federal law change, ORHPC removed details of the necessary provider option and CAH application process from this website.

Federal criteria for eligibility in the Critical Access Hospital Program

The Balanced Budget Act of 1997 (Public Law 105-33) established eligibility for designation as a Critical Access Hospital. To become a Critical Access Hospital, the facility must be:
  • A licensed and operating not-for-profit hospital
  • Currently participating in the Medicare program
  • Located in a rural area (this does not include those hospitals in an MSA) and
  • Located at least 35 miles from another hospital (15 miles if it is mountainous terrain or areas with only secondary roads) or certified by the state as being a necessary provider. (note: The Medicare Prescription Drug Improvement and Modernization Act of 2003 rescinded the states' ability to designate "necessary providers" of January 1, 2006).

In addition, all eligible hospitals (both federal and state) must adhere/agree to the following federal criteria:

  • Apply for designation
  • Limit inpatient acute care beds to no more than 25. Facilities participating in the swing-bed program may use beds for either acute care or swing as long as they do not exceed the 25 bed limit
  • Have an average annual length of stay of no more than 96 hours
  • Comply with all of the licensure and certification requirements for CAHs established by the federal and state governments
  • Participate in a rural health network, defined as an organization consisting of at least one CAH and at least one full-service acute care hospital where participants have developed network related agreements, including the following agreements:
    • Patient referral and transfer
    • Development and use of communications systems, where feasible, including:
      • Telemetry
      • Systems for electronic sharing of patient data.
    • Transportation agreements
      • Emergency
      • Non-emergency.
  • Establish credentialing and quality improvement assurances with at least one eligible hospital and/or agency (network hospital, peer review organization or equivalent), including:
    • Medical staff credentialing, privilege delineation agreement
    • Medical staff peer review agreement
    • Quality improvement agreement.
  • Make available 24-hour emergency services
  • Make available 24-hour nursing services, but not required to staff unless an inpatient is present
  • Inpatient services may be provided by a physician assistant, nurse practitioner or clinical nurse specialist as long as there is physician oversight (physician does not have to be present in the facility) and
  • Costs for inpatient, outpatient and lab services to Medicare beneficiaries will be reimbursed on a reasonable basis.

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Minnesota's criteria for "necessary provider" designation

As a result of changes in the Medicare Prescription Drug Improvement and Modernization Act of 2003, effective January 1, 2006, Minnesota is no longer able to designate a hospital as a “necessary provider.” Only hospitals that are 35 miles from other hospitals are eligible to become a critical access hospital.

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Updated Tuesday, August 09, 2011 at 10:07AM