Impact of Critical Access Hospital Conversion on Benficiary Liability

The Medicare Critical Access Hospital (CAH) program has improved the financial viability of small rural hospitals and enhanced access to care in rural communities, but it puts beneficiaries at risk for paying a larger share of the cost of services covered under the Medicare Part B benefit. This paper examines the impact of hospital conversion to CAH status on beneficiary out-of-pocket coinsurance payments for hospital outpatient services. Conversion is associated with an increase in beneficiary coinsurance payments per outpatient visit of $17.19, equivalent to 34 percent of mean out-of-pocket Part B payments for the study sample as a whole. However, CAH designation had no significant effect on the share of outpatient costs paid by the beneficiary.