CAH election and what it does to the plant

Critical Access Hospital election is often sold as a rate story. It is also a plant, staffing, and service-mix story. Cost-based reimbursement pays you for the cost of the hospital you operate. That helps if the building is right-sized. It does not if it is not.

The questions that matter: Is the 25-bed and 96-hour structure compatible with the surgical and obstetric volume the community expects? Are swing beds carrying the census the SNF down the road used to hold? Is method II physician billing worth the administrative load? None of those are answered by a statewide average cost-to-charge ratio.

We model CAH and PPS side by side on the hospital's own trial balance, not a peer average. The decision memo is written for a board: dollars, staffing, and what would have to change in the next three years for the election to still be the right one.

If you are already a CAH, the same model is how you stop leaving money in the cost report, especially around swing-bed statistics, non-reimbursable cost centers, and related-party contracts that have not been reviewed since the last administrator left.