About the Flex Program

History

The Balanced Budget Act of 1997 Public Law 105-33 (PDF) established the Medicare Rural Hospital Flexibility Program (Flex) to help rural communities preserve access to primary and emergency health care service by:

• Establishing and supporting Critical Access Hospitals (CAHs)
• Enhancing emergency medical services (EMS)
• Improving health care quality and performance
• Promoting rural health networks and community development

Each state began participating in this program by developing and approving a Rural Health Plan. Minnesota’s Rural Health Plan was approved in July 1998 and updated in 2004 and in 2008. The Minnesota Department of Health's Office of Rural Health and Primary Care (ORHPC) receives federal funds from the Federal Office of Rural Health Policy to carry out its projects and support Minnesota CAHs and rural EMS agencies. 

Critical Access Hospitals

The Balanced Budget of Act of 1997 (Public Law 105-33) established eligibility for designation as a Critical Access Hospitals. CAHs receive higher cost-based reimbursement for Medicare services. In Minnesota, they receive cost-based reimbursement for some Medicaid services. CAHs are allowed greater flexibility in staffing. In return, CAHs must be:

• A licensed and operating not-for-profit hospital
• Currently participating in the Medicare program
• Located in a rural area (this does not include those hospitals in an MSA)
• Located at least 35 miles from another hospital (15 miles if it is mountainous terrain or areas with only secondary roads) or certified by the state as being a necessary provider.  (note: The Medicare Prescription Drug Improvement and Modernization Act of 2003 rescinded the states' ability to designate "necessary providers" of January 1, 2006).
• Make emergency services available 24 hours per day
• Have no more than 25 beds
• Maintain an annual average length of stay of 96 hours or less
• Participate in networking relationships with other health care providers

Minnesota has 76 Critical Access Hospitals

ORHPC works with CAHs to verify rurality or necessary provider status as applicable. CAHs that plan to relocate their hospital or hospitals wishing to become a CAH should email health.flex@state.mn.us.

See also: Critical Access Hospitals Information Bulletin 00-34