Rural Hospitals

Small rural hospitals are a crucial part of New Hampshire’s healthcare delivery system and make up 13 of the 26 acute-care hospitals in the state. Rural hospitals provide essential emergency department services, inpatient care, and care coordination services to areas that otherwise would not have access.

Populations served in rural hospitals tend to be older, poorer, and more likely to have chronic diseases and depend on public programs for healthcare coverage. In addition to providing access to healthcare for these populations, rural hospitals also significantly impact the local economy by providing jobs, utilizing area businesses for equipment and resource needs, and attracting new businesses to the area due to availability of services.

There are unique financial and staffing challenges faced by rural hospitals, and since these challenges have been recognized, several designations have been created to positively impact their bottom line. There are four different designations for rural hospitals that allow different financial compensation for services:

  • Critical Access Hospital (CAH),
  • Disproportionate Share Hospital (DSH),
  • Rural Referral Center (RRC), or
  • Sole Community Hospital (SCH)

What is a Critical Access Hospital (CAH)?

Critical Access Hospitals (CAHs) are a designation given to certain rural hospitals by the Centers for Medicare and Medicaid Services (CMS) as part of the 1997 Balanced Budget Act. Critical Access Hospitals are supported by a federal grant called the Medicare Rural Hospital Flexibility (Flex) Program. The Flex grant is just part of the important work being done by the New Hampshire’s State Office of Rural Health, housed within the Division of Public Health Services.

A Critical Access Hospital is a small, rural hospital with 25 or fewer acute care inpatient beds, located more than 35 miles from another hospital, or 15 miles by mountainous terrain or secondary roads. The length of stay in a CAH must average 96 hours or less for acute care services, and the hospital must provide 24/7 emergency care services. If all qualifications are met, a hospital will be designated as a CAH and receive 101 percent of allowable costs for reimbursement from Medicare.

Find out more about New Hampshire Critical Access Hospitals and the Flex Program

The Medicare Rural Hospital Flexibility Program (Flex)

The Balanced Budget Act of 1997 established the Medicare Rural Hospital Flexibility Grant Program with the intent to assist rural hospitals and improve access through critical access hospital (CAH) designation. The Flex program provides funding to States for the designation of Critical Access Hospitals (CAHs) in rural communities. Medicare reimburses CAHS on a reasonable cost basis for inpatient and outpatient services (including lab and qualifying ambulance services) provided to Medicare patients. Flex funding encourages the development of cooperative systems of care in rural areas -- joining together CAHs, EMS providers, clinics, and health practitioners to increase efficiencies and quality of care.

The NH Flex program focuses on three core areas:

  1. Support for Quality Improvement in CAHs
  2. Support for Operational and Financial Improvement in CAHs
  3. Support for Health System Development and Community Engagement, including integrating EMS in regional and local systems of care

The Small Rural Hospital Improvement Program (SHIP)

The purpose of the Small Rural Hospital Improvement Grant Program (SHIP) is to help small rural hospitals of 49 beds or less, and do any or all of the following: 1) enable the purchase of equipment and/or training to help hospitals attain value-based purchasing provision in the Patient Protection and Affordable Care Act (ACA), 2) aid small rural hospitals in joining or becoming accountable care organizations, or create shared savings programs per the ACA, and 3) enable small rural hospitals to purchase health information technology, equipment and/or training to comply with meaningful use, ICD-10 standards, and payment bundling.


Medicare Beneficiary Quality Improvement Project (MBQIP)

The Medicare Beneficiary Quality Improvement Project (MBQIP) is one way New Hampshire’s Critical Access Hospitals work to continuously improve patient care. MBQIP is a component of the Medicare Rural Hospital Flexibility grant program administered by the State Office of Rural Health and Primary Care. See the federal Rural Hospital Program web page for more information about the federal program.

Critical Access Hospitals report their performance on MBQIP quality measures related to patient safety, patient engagement, care transitions, and outpatient care of patients in the emergency department.