CAH Participation in Flex Financial and Operational Improvement Activities, 2015–2018 (Policy Brief #49)

Publication Date: Oct 2019
Author(s): Knocke K, Reiter KL, Pink GH
Research Center(s): North Carolina
Project: The Characteristics of Communities Served by CAHs at High Risk of Financial Distress and Best Practices for CAHs in Environments Predictive of High Risk of Financial Distress
Topic(s): Finance

Under the Medicare Rural Hospital Flexibility Program, states with Critical Access Hospitals (CAHs) are eligible to receive federal funds to support hospital improvement. This study finds:

  • CAHs typically change activities year to year rather than continue the same activity. Further, in the second and third years of the evaluation period, less than 50% of CAHs participated in a financial or operational improvement intervention.
  • Over the three years examined, the typical activity pathway for a given CAH through a performance period is an initial assessment in year one, and an in-depth assessment in both years two and three.
  • Compared to CAHs at low risk of financial distress, CAHs at higher risk of financial distress are more likely to participate in financial and operational improvement activities.
  • Additional data on the intensity of each CAH activity is needed to determine how Flex resources are distributed among CAHs at higher risk of financial distress.

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