title: Minimum-distance requirements could harm high-performing critical-access hospitals and rural communities.
abstract: 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.
authors.affiliation: Michelle M. Casey (mcasey@umn.edu) is a senior research fellow in and deputy director of the Rural Health Research Center, Division of Health Policy and Management, School of Public Health, University of Minnesota, in Minneapolis.
authors.forename: Michelle M
authors.initials: MM
authors.lastname: Casey
authors.affiliation: Ira Moscovice is the Mayo Professor, director of the Rural Health Research Center, and head of the Division of Health Policy and Management, all at the School of Public Health, University of Minnesota.
authors.forename: Ira
authors.initials: I
authors.lastname: Moscovice
authors.affiliation: G. Mark Holmes is an associate professor in the Department of Health Policy and Management and director of the North Carolina Rural Health Research and Policy Analysis Center, both at the University of North Carolina at Chapel Hill.
authors.forename: G Mark
authors.initials: GM
authors.lastname: Holmes
authors.affiliation: George H. Pink is the Humana Distinguished Professor in the Department of Health Policy and Management and deputy director of the North Carolina Rural Health Research and Policy Analysis Center, both at the University of North Carolina at Chapel Hill.
authors.forename: George H
authors.initials: GH
authors.lastname: Pink
authors.affiliation: Peiyin Hung is a graduate research assistant in the Division of Health Policy and Management, School of Public Health, University of Minnesota.
authors.forename: Peiyin
authors.initials: P
authors.lastname: Hung
mesh_terms: D017046:Cost Savings; D004469:Economics, Hospital; D006297:Health Services Accessibility; D006780:Hospitals, Rural / Q000191:economics*; D006801:Humans; D006278:Medicare / Q000191:economics*; D012051:Reimbursement Mechanisms / Q000191:economics; D012424:Rural Population; D014481:United States
keywords: Access To Care; Financing Health Care; Hospitals; Quality Of Care; Rural Health Care