Federal Rural Hospital Program to Expand

SEPTEMBER 27, 2004 - Posted at 7:27 a.m. CDT

LITTLE ROCK, AR - An expansion is coming this week for a federal program that allows small hospitals to survive.  Instead of covering hospitals with 25 beds or fewer, it now will allow an extra ten beds.

Arkansas has 21 hospitals that are covered under the "critical access" program, which reimburses full costs for treating Medicare patients.  Under the change, the state could have 27 hospitals under the program.

The reimbursement under Medicare is vital for rural hospitals because they treat a greater proportion of older patients than urban hospitals.

Hospitals in the program have to limit stays to an average of four or fewer days.

The policy change is enticing for hospitals that are slightly larger than the 35-bed limit.

The exemption is effective Friday.  It will allow hospitals to have distinct-care units, usually for geriatric psychiatry or rehabilitation.

A state official says not all hospitals in the program have had a financial turnaround but no rural hospitals have closed since the program started.

(Copyright 2004 by The Associated Press.  All Rights Reserved.)