Medicare News
| For Immediate Release: | Contact: |
| Thursday, January 22, 2004 | CMS Office of Public Affairs 202-690-6145 |
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CMS INCREASES PAYMENTS AND EXPANDS FLEXIBILITY FOR CRITICAL ACCESS HOSPITALS IN RURAL AREAS
The Centers for Medicare & Medicaid Services today announced two new policies that will increase reimbursement to critical access hospitals for services to Medicare beneficiaries, and will allow these hospitals to use up to 25 beds for acute care services. These policies implement provisions in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 intended to bolster health care services in rural areas. The law was signed by President Bush on December 8.
As a result of these changes, payments to the 863 critical access hospitals that play a crucial role in the delivery of rural health care are expected to increase by $900 million over the next ten years.
"I am pleased that Congress has worked with the Administration to bolster services to people with Medicare living in rural areas," said Health and Human Services Secretary Tommy Thompson. We believe the rural provisions in the new Medicare law will have a major positive impact on the delivery of health care to rural beneficiaries."
Critical access hospitals are limited-service hospitals located in rural areas that receive cost-based reimbursement. To be designated a critical access hospital, a facility must, among other requirements: (1) be located in a county or equivalent unit of a local government in a rural area; (2) be located more than a 35-mile drive from a hospital or another health care facility; or (3) be certified by the State as being a necessary provider of health care services to residents in the area.
Under policies in effect prior to the new Medicare law, these hospitals could not have more than 15 beds for acute care. As a result of the new law, as implemented by the policies announced today, a critical access hospital can have up to 25 beds designated as either acute care beds or swing beds -- beds that may at times be used for acute care, and at other times for post-acute care.
In addition to increasing the permissible number of beds, the new policies put into effect a provision of Medicare law that increases the payment for both inpatient and outpatient services rendered by critical access hospitals from 100 percent to 101 percent of reasonable costs.
