In 1997 legislation was enacted as part of the Balanced Budget Act that authorized each state to establish a State Medicare Rural Hospital Flexibility Program (aka Flex Program) under which certain facilities that participated in the Medicare program could become Critical Access Hospitals (CAHs). These were current hospitals with Medicare participation; hospitals that stopped operating after November 29, 1989 or health clinics or centers (as defined by the state) that ceased operation as a hospital but now operate as a health clinic or center.

The program began in response to a growing concern about access to care for Americans living in rural areas. There was fear that without financial assistance rural hospitals would close and people in these areas would not have access to quality care.

The Flex program provided grants to each state to implement a CAH program. Every state except Connecticut, Delaware, Rhode Island, Maryland and New Jersey has a State Flex Program.


CAHs are certified under a different set of Medicare Conditions of Participation that are more flexible than acute care hospital Conditions of Participation. This designation allows them to become certified to receive cost-based reimbursement from Medicare. This special reimbursement that CAHs receive is intended to improve their financial performance and thereby maintain access to basic health care in rural areas by providing rural health networks and rural emergency medical services.

CAH Requirements:
To be eligible as a CAH today the following requirements must be met:


The benefits of CAH status include:

Number of CAHs:

As of September 30, 2012, there are 1,330 certified Critical Access Hospitals located throughout the United States. This represents more than 25 percent of all US hospitals.

The Flex monitoring team keeps a comprehensive list of all Critical Access Hospitals along with their name, address, city, state, zip code and the start date for their CAH status.

Key Abbreviations to Remember:

Critical Access Hospital = CAH
Conditions of Participation = CoP

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