RCHD
Rural Community Hospital Demonstration
The Rural Community Hospital Demonstration tests cost-based reimbursement for covered Medicare inpatient hospital services paid to small rural hospitals with fewer than 51 beds. It aims to increase financial viability for hospitals that are too large to qualify for Critical Access Hospital (CAH) designation.
Innovation
Tests payment under a reasonable cost-based methodology for inpatient hospital services furnished by participating hospitals, rather than the standard Inpatient Prospective Payment System (IPPS).
The Problem
Many small rural hospitals are too large to qualify for a Critical Access Hospital (CAH) designation and face considerable financial pressures under the Medicare Inpatient Prospective Payment System (IPPS) due to low or negative Medicare inpatient margins.
The Solution
The Rural Community Hospital Demonstration tests the feasibility and advisability of providing cost-based reimbursement for covered Medicare inpatient hospital services to selected rural hospitals.
Expected Outcomes
Through increased reimbursement, hospitals work to achieve the demonstration’s goals of; 1) increasing participant hospitals’ financial viability and capacity within the community, 2) meeting additional beneficiary needs within their service areas, and 3) promoting high-quality health care delivery and services.
Strategy
Rural hospitals can be a lifeline to small communities, and the RCHD empowers selected small rural hospitals to achieve financial stability and to meet Medicare beneficiaries’ delivery and service needs within their communities.
Model Goals
- Increase participant hospitals' financial viability and capacity within the community
- Meet additional beneficiary needs within their service areas
- Promote high-quality health care delivery and services
Patient Eligibility
Medicare beneficiaries receiving covered inpatient hospital services or extended care services at participating rural community hospitals.
- Must be a Medicare beneficiary
- Must receive covered inpatient hospital services or extended care services (swing beds)
Provider Eligibility
Small rural hospitals with fewer than 51 beds located in one of the 20 least densely populated states that do not qualify for Critical Access Hospital (CAH) designation.
- Located in a rural area or treated as being so located
- Has fewer than 51 acute care inpatient beds
- Makes available 24-hour emergency care services
- Is not eligible for Critical Access Hospital (CAH) designation, or has not been designated a CAH
- Located in one of the 20 least densely populated states
Care Categories
Inpatient Care
CMS Benchmarks & Thresholds
eligibility
operational
See how this model fits your organization
Answer three quick questions about your facility and get matched to the VBC models that fit your profile — with benchmark context from organizations like yours.
Start Assessment