ARIZONA STATE SENATE
Phoenix, Arizona
critical access
hospitals; redesignation
Exempts a hospital from modification requirements to obtain a previous licensed capacity after it terminates its critical access hospital (CAH) designation.
In 1997, Congress created a new category of limited service hospitals called CAHs, which on designation are eligible for Medicare reimbursement, giving small rural facilities the opportunity to remain financially viable while continuing to meet community needs. In order to qualify for CAH designation, the rural, nonprofit or public hospital must:
a) have an acute care bed limit of 15 beds.
b) have an additional swing-bed limit of 10 beds.
c) have an average length of stay that does not exceed 96 hours.
d) have available 24-hour emergency care.
e) be part of a network that includes a tertiary facility and an emergency medical services provider.
f) participate in the Medicare reimbursement program.
g) be located more than 35 miles from another hospital or designated by the state as a necessary provider.
Under the CAH program, state Medicaid agencies may also provide to CAH designated facilities reasonable cost-based reimbursement, which is based on actual costs and is more favorable than the typical Medicaid payment, which in Arizona is based on tiered per diem rates. Last year, the Legislature appropriated $591,900 from the state general fund and $1,108,100 in federal Medicaid matching monies for a total of $1,700,000 in FY 2001-2002 for increased reimbursement to CAHs.
According to the rural health office (RHO) at the University of Arizona, Wickenburg Regional Medical Center, Northern Cochise Community Hospital in Wilcox and Benson Hospital have been approved for CAH designation and Southeastern Arizona Medical Center in Douglas, Page Memorial Hospital and Hopi Health Care Center in Polacca have submitted applications for CAH designation.
If a CAH expands its services in the future, it must obtain an amended license. To acquire an amended license, a hospital must meet current codes and standards for hospitals in the desired licensure classification, which may involve costly architectural modifications. S.B. 1238 waives the modification requirement for hospitals that terminate their CAH designation in order to obtain a previous licensed capacity as long as that hospital was in compliance with federal regulations and does not exceed its original licensed capacity.
There are no costs related to the provisions of this bill.
1. Prohibits the Director of the Department of Health Services from requiring a hospital that was designated as a CAH to make any modifications to obtain a previous licensed capacity if:
(a) the hospital has terminated its CAH designation;
(b) the hospital does not exceed its original licensed capacity; and
(c) the hospital remains in compliance with the federal regulations effective when the hospital first received its original licensed capacity.
2. Provides for a general effective date.
Amendments
Adopted by Committee
1. Requires the hospital not to exceed its original licensed capacity.
2. Requires the hospital to remain in compliance with federal regulations effective when the hospital was originally licensed at a higher licensed capacity.
Senate Action
HEA 3/12/02 DPA 6-0-2
Prepared by Senate Staff
March 14, 2002