Impact of conversion to critical access hospital status for Oklahoma's rural hospitals

The Medicare Rural Hospital Flexibility Grant Program established a new hospital category, the Critical Access Hospital, designed to provide financial stability to small rural hospitals that were losing money after changes in the Prospective Payment System implemented by Medicare.

This article describes the impact of conversion to Critical Access Hospital (CAH) status for 15 small rural hospitals in Oklahoma. Objectives of the study were to identify how conversion to CAH affected hospital utilization and finances for the first year after conversion.

A telephone survey was used to collect information from hospital administrators. Fifteen of 16 eligible hospitals participated in the study.

In general, services and patient census declined slightly with conversion to CAH. All 15 hospitals had reported losses prior to conversion, totaling $6,985,033. Ten hospitals reported losses after conversion. After converting to CAH status, the hospitals reported total losses of $3,094,547. The hospitals had a net change of $4,293,040.

Most of the 15 study hospitals greatly improved their financial situation in the first year after conversion to CAH status, but in aggregate still operated at a loss.