Rural Hospital Flexibility Program

Legislation enacted as part of the Balanced Budget Act (BBA) of 1997 authorized states to establish State Medicare Rural Hospital Flexibility Programs (Flex Program), under which certain facilities participating in Medicare can become Critical Access Hospitals (CAH). To receive funds under the grant program, states must apply for the funds and engage in rural health planning through the development and maintenance of a State Rural Health Plan that:

  • Designates and supports the conversions of CAHs. A hospital must meet the following criteria to be designated a CAH:
    • Be located in a state that has established a State Flex Program
    • Provide no more than 25 inpatient beds
    • Furnish 24-hour emergency care services, using either on-site or on-call staff
    • Have an average annual length of stay of 96 hours or less
    • Be located either more than 35 miles from the nearest hospital or CAH or more than 15 miles in areas with mountainous terrain or be certified as a "necessary provider" before December 31, 2005
  • Promotes emergency medical services (EMS) integration initiatives by linking local EMS with CAHs and their network partners
  • Develops rural health networks to assist and support CAHs.
  • Develops and supports quality improvement initiatives. In partnership with the Kentucky Hospital Association, the Flex Program supports the development and implementation of quality improvement initiatives.
  • Evaluates State programs within the framework of national program goals.

Kentucky’s Rural Hospital Flexibility Grant Program endeavors to stabilize the smallest and most vulnerable rural hospitals, and to improve access to hospital- based care for rural populations.