To qualify for Critical Access Hospital status, CAHs must be at least 35 miles (or 15 miles in mountainous terrains or areas that only have rugged secondary roads) from another hospital or designated by their state as a “necessary provider”, cannot have more than 25 acute-care beds, must offer 24-hour emergency services and cannot have an annual average length of stay greater than 96 hours. Since 1997, CAHs have been paid 101% of their allowable costs for outpatient, inpatient, lab and other services to ensure the CAH stays open for its community. By comparison, traditional hospitals paid through the Medicare inpatient and outpatient prospective payment systems typically cover about 93% of the costs of Medicare patients.
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