Why some hospitals are turning critical access

The number of critical access hospitals has increased by 446 since 2004 and as rural hospitals face a financial crunch, more could be trimming their services in exchange for increased federal funds.

To obtain critical access status, hospitals need to have no more than 25 beds and an average duration of stay under 96 hours. While cutting services to meet these requirements might seem like a difficult choice, hospital leaders told Becker's that the designations give them a path toward financial stability. 

In June, Farmington, Maine-based Franklin Memorial Hospital applied for critical access status. Franklin Memorial CEO Barbara Sergio said that the new designation will allow them to turn a profit.

"Currently, Franklin runs in the negative every year, and we were grateful to have the support of Maine Health and be part of that health system," Ms. Sergio said. "For that reason, when we turn critical access on Oct. 1, we should actually turn positive. We haven't identified the exact bottom dollar yet, but we're definitely looking positive when you put in the cost reporting system."

For hospitals on the edge, the extra funding can allow them to keep their doors open. Malone, N.Y.-based Alice Hyde Medical Center will receive between $3 million and $4.5 million more in annual reimbursements if their designation is approved. 

"Critical access hospital status will directly support Alice Hyde's mission of caring for our community," Michelle LeBeau, RN, president of Alice Hyde Medical Center, said in the release. 

"Our ability to invest in our people, our facilities and our campus is critical as we continue to change to meet the needs of our community. CAH status will support those needs through improved reimbursement from government payers and advance the already high-quality care we provide."

Some hospital leaders also see the critical access designation will allow them to remain independent and not merge with a larger system.

In May, Carroll, Iowa-based St. Anthony Regional Hospital applied for a critical access designation. Hospital officials aim for the new designation to reduce financial vulnerability and allow them to remain an independent rural hospital.

"This allowed us to continue operating as a strong independent hospital for our community and it's something that we always try to make our decisions around," said St. Anthony Regional CFO Eric Salmonson.

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