Critical Access Hospitals

About the Critical Access Hospital Program 

The Critical Access Hospital (CAH) Program was included in the Balanced Budget Act of 1997 (BBA). The BBA had a severe financial impact on hospitals around the country.  To help alleviate the impact on small, rural hospitals, the BBA created the Medicare Rural Hospital Flexibility Program, which allows rural hospitals to receive a higher reimbursement rate and have greater flexibility from federal rules and regulations. Across the United States, over 700 rural hospitals have converted to CAH status since 1999.


  • Located in a rural parish;
  • 35 miles from another hospital (15 miles on secondary road) OR designated as “necessary provider” by the State; and
  • Licensed hospital participating in the Medicare program.

Program Requirements 

  • May have up to 25 acute and/or swing beds;
  • 96 hours annual length of stay, excluding swing and hospice beds;
  • Offer inpatient and outpatient care services
  • Emergency care available 24 hours a day with medical staff on-call and available within 30 minutes, staff must be trained or experienced in emergency care;
  • Medical staff must consist of at least one MD or DO and may include mid-level providers;
  • One RN on duty 24 hours a day, can serve in the emergency room, acute and swing-bed units;
  • Patient referral and transfer agreement with a network hospital;
  • Must have available routine and emergency patient transportation; and
  • Credentialing and quality assurance assistance agreement with a hospital or QIO.

Technical Assistance 

  • Health system network development services;
  • State-wide CAH quality improvement initiatives; and
  • Performance improvement services (financial, practice management, recruitment).

Benefits of CAH Program

  • 101 percent Medicare cost-based reimbursement for inpatient, outpatient, and swing bed care;
  • Relief from Federal regulations of full-time coverage of dietary, pharmacy, lab and x-ray;
  • Cost-based reimbursement for CAH ambulance service allowed if 35-mile requirement is met;
  • Allowable on-call coverage cost of the emergency room, includes mid-level providers;
  • Distinct Part Units 10 bed allowance (geri-psych or rehab) effective 10/04;
  • 115 percent of the Medicare physician fee schedule on physician assigned billing;

For more information see the CAH Fact Sheet.

Medicare Beneficiary Quality Improvement Project (MBQIP)

The Medicare Beneficiary Quality Improvement Project (MBQIP) is a quality improvement activity under the Federal Office of Rural Health Policy’s (FORHP) Medicare Rural Hospital Flexibility (FLEX) grant program. Implemented in 2011, the goal of MBQIP is to improve the quality of care provided in critical access hospitals (CAHs) by increasing quality data reporting by CAHs and then driving quality improvement activities based on the data.

MBQIP provides an opportunity for individual hospitals to look at their own data, compare their results against other CAHs and partner with other hospitals around quality improvement initiatives to improve outcomes and provide the highest quality care to each and every one of their patients. As the U.S. moves rapidly toward a health care system that pays for value versus volume of care provided, it is crucial for CAHs to participate in federal, public quality reporting programs to demonstrate the quality of the care they are providing. Low numbers are not a valid reason for CAHs to not report quality data. It is important to provide evidence-based care for every patient, 100 percent of the time. MBQIP takes a proactive approach to ensure CAHs are well-prepared to meet future quality requirements.

MBQIP Louisiana Peer Training Toolkit


For more information, contact:   

Kandi Smith, Program Manager

FLEX/SHIP Programs
Bureau of Primary Care and Rural Health

Louisiana Department of Health Office of Public Health
Physical Address: 628 North 4th Street, 8th Floor, Baton Rouge, LA 70802
Mailing Address:    P. O. Box 3118, Baton Rouge, LA 70821-3118
Phone: (225) 342-1525
Fax:      (225) 342-5839


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