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When CMS Changes the Map: How Mileage Recalculations Are Costing Hospitals Their CAH Status

Background: A New Wave of CAH Terminations

Critical Access Hospital (CAH) status is vital to the survival of small, rural hospitals that rely on the enhanced Medicare reimbursement that the program provides. Losing CAH status can mean financial ruin, service reductions, or full hospital closure. The Center for Medicare & Medicaid Services (CMS) has begun revoking CAH designations based on new mileage calculations, even where there has been no change to a hospital’s location, the roads, or the terrain. In several recent cases, CMS used simplified mapping tools like Google Maps to reverse its prior decision on CAH status, disregarding prior determinations with re-measured driving distances.

California news outlets are reporting on recent developments where up to four hospitals designated as CAHs for over a decade have faced a reversal of CAH status despite the exact same geographic conditions. Read this news article regarding one of those CAH. CMS asserts that these hospitals no longer meet the 35-mile or

15-mile distance thresholds required under federal law (42 U.S.C. § 1395i–4(c)(2)(B)).

CMS’ Attempt to Prevent Appeals: What Hospitals Must Know

In some recent revocation cases, CMS has attempted to avoid granting hospitals an opportunity to appeal by withholding an explanation of appeal rights until after a hospital either voluntarily converts to another provider type or is involuntarily terminated from the Medicare program. In some instances, CMS representatives have claimed that appeal rights arise only upon formal termination of Medicare participation, not upon the initial CAH revocation decision.

Hospitals cannot rely on the CMS CAH revocation notice to provide information on appeal rights and should not wait until CMS issues a formal termination notice to challenge the loss of CAH status. Once a hospital receives CMS’ decision stating it will no longer qualify as a CAH, the clock arguably starts ticking – even if the provider agreement remains temporarily in place. Delaying action until the final termination notice could limit a hospital’s ability to plan its future and protect its rights. If the hospital waits and is ultimately forced to convert to another provider type, the transition requires extensive regulatory filings, operational restructuring, and potentially months of lead time to secure state licensure changes, CMS approvals, and new enrollment forms.

Alternatively, if the hospital voluntarily converts to another provider type, it may lose the ability to appeal the CAH determination altogether. Seeking an administrative hearing before an Administrative Law Judge (ALJ) immediately after receiving CMS’ adverse determination will preserve the hospital’s appeal rights and maximize the time available to either overturn the decision or prepare for an orderly conversion.

The ALJ Appeal Process: Your Legal Right to Be Heard

Hospitals may seek review through the U.S. Department of Health and Human Services’ Departmental Appeals Board (DAB), where a federal ALJ will determine whether CMS’ decision was lawful. Under 42 C.F.R. § 498.5, any provider dissatisfied with a CMS determination regarding provider status has the right to an ALJ hearing. Once filed, the ALJ process includes several defined stages: CMS must file any motions to dismiss within 20 days or waive the argument; pre-hearing exchanges and briefing follow on a strict timeline.

If the Appeal Fails: Options for Conversion

If a hospital is unable to retain its CAH designation, it must transition to another Medicare provider type to continue participation in the program. The most common alternatives include conversion to a general acute care hospital, applying for low-volume hospital status, or seeking designation as a sole community hospital. Each of these options offers some financial support or regulatory flexibility under Medicare.

It has been reported that a number of hospitals are converting from CAHs to Rural Emergency Hospitals (REH), a Medicare designation that first became available in January 2023. The REH designation is for small rural facilities that offer 24/7 emergency and outpatient services but do not provide inpatient care. While REH status includes a 5% increase in Medicare outpatient payments, it generally disqualifies the hospital from participating in the 340B drug pricing program. This is a vital consideration for hospitals that rely on pharmaceutical cost savings. Further, Louisiana does not currently license freestanding emergency departments, which presents an additional, significant regulatory hurdle that may be impossible to clear.

Conclusion

A CMS notice of an impending revocation of CAH status is not the end, but it is a critical turning point. Louisiana hospitals in this position must immediately evaluate the validity of the CMS determination, should potentially seek an ALJ hearing, and must understand all implications before converting to another provider type. Early legal intervention and even congressional engagement can be key in preserving both appeal rights and long-term viability.

When CMS Changes the Map: How Mileage Recalculations Are Costing Hospitals Their CAH Status

Background: A New Wave of CAH Terminations

Critical Access Hospital (CAH) status is vital to the survival of small, rural hospitals that rely on the enhanced Medicare reimbursement that the program provides. Losing CAH status can mean financial ruin, service reductions, or full hospital closure. The Center for Medicare & Medicaid Services (CMS) has begun revoking CAH designations based on new mileage calculations, even where there has been no change to a hospital’s location, the roads, or the terrain. In several recent cases, CMS used simplified mapping tools like Google Maps to reverse its prior decision on CAH status, disregarding prior determinations with re-measured driving distances.

California news outlets are reporting on recent developments where up to four hospitals designated as CAHs for over a decade have faced a reversal of CAH status despite the exact same geographic conditions. Read this news article regarding one of those CAH. CMS asserts that these hospitals no longer meet the 35-mile or

15-mile distance thresholds required under federal law (42 U.S.C. § 1395i–4(c)(2)(B)).

CMS’ Attempt to Prevent Appeals: What Hospitals Must Know

In some recent revocation cases, CMS has attempted to avoid granting hospitals an opportunity to appeal by withholding an explanation of appeal rights until after a hospital either voluntarily converts to another provider type or is involuntarily terminated from the Medicare program. In some instances, CMS representatives have claimed that appeal rights arise only upon formal termination of Medicare participation, not upon the initial CAH revocation decision.

Hospitals cannot rely on the CMS CAH revocation notice to provide information on appeal rights and should not wait until CMS issues a formal termination notice to challenge the loss of CAH status. Once a hospital receives CMS’ decision stating it will no longer qualify as a CAH, the clock arguably starts ticking – even if the provider agreement remains temporarily in place. Delaying action until the final termination notice could limit a hospital’s ability to plan its future and protect its rights. If the hospital waits and is ultimately forced to convert to another provider type, the transition requires extensive regulatory filings, operational restructuring, and potentially months of lead time to secure state licensure changes, CMS approvals, and new enrollment forms.

Alternatively, if the hospital voluntarily converts to another provider type, it may lose the ability to appeal the CAH determination altogether. Seeking an administrative hearing before an Administrative Law Judge (ALJ) immediately after receiving CMS’ adverse determination will preserve the hospital’s appeal rights and maximize the time available to either overturn the decision or prepare for an orderly conversion.

The ALJ Appeal Process: Your Legal Right to Be Heard

Hospitals may seek review through the U.S. Department of Health and Human Services’ Departmental Appeals Board (DAB), where a federal ALJ will determine whether CMS’ decision was lawful. Under 42 C.F.R. § 498.5, any provider dissatisfied with a CMS determination regarding provider status has the right to an ALJ hearing. Once filed, the ALJ process includes several defined stages: CMS must file any motions to dismiss within 20 days or waive the argument; pre-hearing exchanges and briefing follow on a strict timeline.

If the Appeal Fails: Options for Conversion

If a hospital is unable to retain its CAH designation, it must transition to another Medicare provider type to continue participation in the program. The most common alternatives include conversion to a general acute care hospital, applying for low-volume hospital status, or seeking designation as a sole community hospital. Each of these options offers some financial support or regulatory flexibility under Medicare.

It has been reported that a number of hospitals are converting from CAHs to Rural Emergency Hospitals (REH), a Medicare designation that first became available in January 2023. The REH designation is for small rural facilities that offer 24/7 emergency and outpatient services but do not provide inpatient care. While REH status includes a 5% increase in Medicare outpatient payments, it generally disqualifies the hospital from participating in the 340B drug pricing program. This is a vital consideration for hospitals that rely on pharmaceutical cost savings. Further, Louisiana does not currently license freestanding emergency departments, which presents an additional, significant regulatory hurdle that may be impossible to clear.

Conclusion

A CMS notice of an impending revocation of CAH status is not the end, but it is a critical turning point. Louisiana hospitals in this position must immediately evaluate the validity of the CMS determination, should potentially seek an ALJ hearing, and must understand all implications before converting to another provider type. Early legal intervention and even congressional engagement can be key in preserving both appeal rights and long-term viability.

When CMS Changes the Map: How Mileage Recalculations Are Costing Hospitals Their CAH Status

Background: A New Wave of CAH Terminations

Critical Access Hospital (CAH) status is vital to the survival of small, rural hospitals that rely on the enhanced Medicare reimbursement that the program provides. Losing CAH status can mean financial ruin, service reductions, or full hospital closure. The Center for Medicare & Medicaid Services (CMS) has begun revoking CAH designations based on new mileage calculations, even where there has been no change to a hospital’s location, the roads, or the terrain. In several recent cases, CMS used simplified mapping tools like Google Maps to reverse its prior decision on CAH status, disregarding prior determinations with re-measured driving distances.

California news outlets are reporting on recent developments where up to four hospitals designated as CAHs for over a decade have faced a reversal of CAH status despite the exact same geographic conditions. Read this news article regarding one of those CAH. CMS asserts that these hospitals no longer meet the 35-mile or

15-mile distance thresholds required under federal law (42 U.S.C. § 1395i–4(c)(2)(B)).

CMS’ Attempt to Prevent Appeals: What Hospitals Must Know

In some recent revocation cases, CMS has attempted to avoid granting hospitals an opportunity to appeal by withholding an explanation of appeal rights until after a hospital either voluntarily converts to another provider type or is involuntarily terminated from the Medicare program. In some instances, CMS representatives have claimed that appeal rights arise only upon formal termination of Medicare participation, not upon the initial CAH revocation decision.

Hospitals cannot rely on the CMS CAH revocation notice to provide information on appeal rights and should not wait until CMS issues a formal termination notice to challenge the loss of CAH status. Once a hospital receives CMS’ decision stating it will no longer qualify as a CAH, the clock arguably starts ticking – even if the provider agreement remains temporarily in place. Delaying action until the final termination notice could limit a hospital’s ability to plan its future and protect its rights. If the hospital waits and is ultimately forced to convert to another provider type, the transition requires extensive regulatory filings, operational restructuring, and potentially months of lead time to secure state licensure changes, CMS approvals, and new enrollment forms.

Alternatively, if the hospital voluntarily converts to another provider type, it may lose the ability to appeal the CAH determination altogether. Seeking an administrative hearing before an Administrative Law Judge (ALJ) immediately after receiving CMS’ adverse determination will preserve the hospital’s appeal rights and maximize the time available to either overturn the decision or prepare for an orderly conversion.

The ALJ Appeal Process: Your Legal Right to Be Heard

Hospitals may seek review through the U.S. Department of Health and Human Services’ Departmental Appeals Board (DAB), where a federal ALJ will determine whether CMS’ decision was lawful. Under 42 C.F.R. § 498.5, any provider dissatisfied with a CMS determination regarding provider status has the right to an ALJ hearing. Once filed, the ALJ process includes several defined stages: CMS must file any motions to dismiss within 20 days or waive the argument; pre-hearing exchanges and briefing follow on a strict timeline.

If the Appeal Fails: Options for Conversion

If a hospital is unable to retain its CAH designation, it must transition to another Medicare provider type to continue participation in the program. The most common alternatives include conversion to a general acute care hospital, applying for low-volume hospital status, or seeking designation as a sole community hospital. Each of these options offers some financial support or regulatory flexibility under Medicare.

It has been reported that a number of hospitals are converting from CAHs to Rural Emergency Hospitals (REH), a Medicare designation that first became available in January 2023. The REH designation is for small rural facilities that offer 24/7 emergency and outpatient services but do not provide inpatient care. While REH status includes a 5% increase in Medicare outpatient payments, it generally disqualifies the hospital from participating in the 340B drug pricing program. This is a vital consideration for hospitals that rely on pharmaceutical cost savings. Further, Louisiana does not currently license freestanding emergency departments, which presents an additional, significant regulatory hurdle that may be impossible to clear.

Conclusion

A CMS notice of an impending revocation of CAH status is not the end, but it is a critical turning point. Louisiana hospitals in this position must immediately evaluate the validity of the CMS determination, should potentially seek an ALJ hearing, and must understand all implications before converting to another provider type. Early legal intervention and even congressional engagement can be key in preserving both appeal rights and long-term viability.

When CMS Changes the Map: How Mileage Recalculations Are Costing Hospitals Their CAH Status

Background: A New Wave of CAH Terminations

Critical Access Hospital (CAH) status is vital to the survival of small, rural hospitals that rely on the enhanced Medicare reimbursement that the program provides. Losing CAH status can mean financial ruin, service reductions, or full hospital closure. The Center for Medicare & Medicaid Services (CMS) has begun revoking CAH designations based on new mileage calculations, even where there has been no change to a hospital’s location, the roads, or the terrain. In several recent cases, CMS used simplified mapping tools like Google Maps to reverse its prior decision on CAH status, disregarding prior determinations with re-measured driving distances.

California news outlets are reporting on recent developments where up to four hospitals designated as CAHs for over a decade have faced a reversal of CAH status despite the exact same geographic conditions. Read this news article regarding one of those CAH. CMS asserts that these hospitals no longer meet the 35-mile or

15-mile distance thresholds required under federal law (42 U.S.C. § 1395i–4(c)(2)(B)).

CMS’ Attempt to Prevent Appeals: What Hospitals Must Know

In some recent revocation cases, CMS has attempted to avoid granting hospitals an opportunity to appeal by withholding an explanation of appeal rights until after a hospital either voluntarily converts to another provider type or is involuntarily terminated from the Medicare program. In some instances, CMS representatives have claimed that appeal rights arise only upon formal termination of Medicare participation, not upon the initial CAH revocation decision.

Hospitals cannot rely on the CMS CAH revocation notice to provide information on appeal rights and should not wait until CMS issues a formal termination notice to challenge the loss of CAH status. Once a hospital receives CMS’ decision stating it will no longer qualify as a CAH, the clock arguably starts ticking – even if the provider agreement remains temporarily in place. Delaying action until the final termination notice could limit a hospital’s ability to plan its future and protect its rights. If the hospital waits and is ultimately forced to convert to another provider type, the transition requires extensive regulatory filings, operational restructuring, and potentially months of lead time to secure state licensure changes, CMS approvals, and new enrollment forms.

Alternatively, if the hospital voluntarily converts to another provider type, it may lose the ability to appeal the CAH determination altogether. Seeking an administrative hearing before an Administrative Law Judge (ALJ) immediately after receiving CMS’ adverse determination will preserve the hospital’s appeal rights and maximize the time available to either overturn the decision or prepare for an orderly conversion.

The ALJ Appeal Process: Your Legal Right to Be Heard

Hospitals may seek review through the U.S. Department of Health and Human Services’ Departmental Appeals Board (DAB), where a federal ALJ will determine whether CMS’ decision was lawful. Under 42 C.F.R. § 498.5, any provider dissatisfied with a CMS determination regarding provider status has the right to an ALJ hearing. Once filed, the ALJ process includes several defined stages: CMS must file any motions to dismiss within 20 days or waive the argument; pre-hearing exchanges and briefing follow on a strict timeline.

If the Appeal Fails: Options for Conversion

If a hospital is unable to retain its CAH designation, it must transition to another Medicare provider type to continue participation in the program. The most common alternatives include conversion to a general acute care hospital, applying for low-volume hospital status, or seeking designation as a sole community hospital. Each of these options offers some financial support or regulatory flexibility under Medicare.

It has been reported that a number of hospitals are converting from CAHs to Rural Emergency Hospitals (REH), a Medicare designation that first became available in January 2023. The REH designation is for small rural facilities that offer 24/7 emergency and outpatient services but do not provide inpatient care. While REH status includes a 5% increase in Medicare outpatient payments, it generally disqualifies the hospital from participating in the 340B drug pricing program. This is a vital consideration for hospitals that rely on pharmaceutical cost savings. Further, Louisiana does not currently license freestanding emergency departments, which presents an additional, significant regulatory hurdle that may be impossible to clear.

Conclusion

A CMS notice of an impending revocation of CAH status is not the end, but it is a critical turning point. Louisiana hospitals in this position must immediately evaluate the validity of the CMS determination, should potentially seek an ALJ hearing, and must understand all implications before converting to another provider type. Early legal intervention and even congressional engagement can be key in preserving both appeal rights and long-term viability.

When CMS Changes the Map: How Mileage Recalculations Are Costing Hospitals Their CAH Status

Background: A New Wave of CAH Terminations

Critical Access Hospital (CAH) status is vital to the survival of small, rural hospitals that rely on the enhanced Medicare reimbursement that the program provides. Losing CAH status can mean financial ruin, service reductions, or full hospital closure. The Center for Medicare & Medicaid Services (CMS) has begun revoking CAH designations based on new mileage calculations, even where there has been no change to a hospital’s location, the roads, or the terrain. In several recent cases, CMS used simplified mapping tools like Google Maps to reverse its prior decision on CAH status, disregarding prior determinations with re-measured driving distances.

California news outlets are reporting on recent developments where up to four hospitals designated as CAHs for over a decade have faced a reversal of CAH status despite the exact same geographic conditions. Read this news article regarding one of those CAH. CMS asserts that these hospitals no longer meet the 35-mile or

15-mile distance thresholds required under federal law (42 U.S.C. § 1395i–4(c)(2)(B)).

CMS’ Attempt to Prevent Appeals: What Hospitals Must Know

In some recent revocation cases, CMS has attempted to avoid granting hospitals an opportunity to appeal by withholding an explanation of appeal rights until after a hospital either voluntarily converts to another provider type or is involuntarily terminated from the Medicare program. In some instances, CMS representatives have claimed that appeal rights arise only upon formal termination of Medicare participation, not upon the initial CAH revocation decision.

Hospitals cannot rely on the CMS CAH revocation notice to provide information on appeal rights and should not wait until CMS issues a formal termination notice to challenge the loss of CAH status. Once a hospital receives CMS’ decision stating it will no longer qualify as a CAH, the clock arguably starts ticking – even if the provider agreement remains temporarily in place. Delaying action until the final termination notice could limit a hospital’s ability to plan its future and protect its rights. If the hospital waits and is ultimately forced to convert to another provider type, the transition requires extensive regulatory filings, operational restructuring, and potentially months of lead time to secure state licensure changes, CMS approvals, and new enrollment forms.

Alternatively, if the hospital voluntarily converts to another provider type, it may lose the ability to appeal the CAH determination altogether. Seeking an administrative hearing before an Administrative Law Judge (ALJ) immediately after receiving CMS’ adverse determination will preserve the hospital’s appeal rights and maximize the time available to either overturn the decision or prepare for an orderly conversion.

The ALJ Appeal Process: Your Legal Right to Be Heard

Hospitals may seek review through the U.S. Department of Health and Human Services’ Departmental Appeals Board (DAB), where a federal ALJ will determine whether CMS’ decision was lawful. Under 42 C.F.R. § 498.5, any provider dissatisfied with a CMS determination regarding provider status has the right to an ALJ hearing. Once filed, the ALJ process includes several defined stages: CMS must file any motions to dismiss within 20 days or waive the argument; pre-hearing exchanges and briefing follow on a strict timeline.

If the Appeal Fails: Options for Conversion

If a hospital is unable to retain its CAH designation, it must transition to another Medicare provider type to continue participation in the program. The most common alternatives include conversion to a general acute care hospital, applying for low-volume hospital status, or seeking designation as a sole community hospital. Each of these options offers some financial support or regulatory flexibility under Medicare.

It has been reported that a number of hospitals are converting from CAHs to Rural Emergency Hospitals (REH), a Medicare designation that first became available in January 2023. The REH designation is for small rural facilities that offer 24/7 emergency and outpatient services but do not provide inpatient care. While REH status includes a 5% increase in Medicare outpatient payments, it generally disqualifies the hospital from participating in the 340B drug pricing program. This is a vital consideration for hospitals that rely on pharmaceutical cost savings. Further, Louisiana does not currently license freestanding emergency departments, which presents an additional, significant regulatory hurdle that may be impossible to clear.

Conclusion

A CMS notice of an impending revocation of CAH status is not the end, but it is a critical turning point. Louisiana hospitals in this position must immediately evaluate the validity of the CMS determination, should potentially seek an ALJ hearing, and must understand all implications before converting to another provider type. Early legal intervention and even congressional engagement can be key in preserving both appeal rights and long-term viability.

When CMS Changes the Map: How Mileage Recalculations Are Costing Hospitals Their CAH Status

Background: A New Wave of CAH Terminations

Critical Access Hospital (CAH) status is vital to the survival of small, rural hospitals that rely on the enhanced Medicare reimbursement that the program provides. Losing CAH status can mean financial ruin, service reductions, or full hospital closure. The Center for Medicare & Medicaid Services (CMS) has begun revoking CAH designations based on new mileage calculations, even where there has been no change to a hospital’s location, the roads, or the terrain. In several recent cases, CMS used simplified mapping tools like Google Maps to reverse its prior decision on CAH status, disregarding prior determinations with re-measured driving distances.

California news outlets are reporting on recent developments where up to four hospitals designated as CAHs for over a decade have faced a reversal of CAH status despite the exact same geographic conditions. Read this news article regarding one of those CAH. CMS asserts that these hospitals no longer meet the 35-mile or

15-mile distance thresholds required under federal law (42 U.S.C. § 1395i–4(c)(2)(B)).

CMS’ Attempt to Prevent Appeals: What Hospitals Must Know

In some recent revocation cases, CMS has attempted to avoid granting hospitals an opportunity to appeal by withholding an explanation of appeal rights until after a hospital either voluntarily converts to another provider type or is involuntarily terminated from the Medicare program. In some instances, CMS representatives have claimed that appeal rights arise only upon formal termination of Medicare participation, not upon the initial CAH revocation decision.

Hospitals cannot rely on the CMS CAH revocation notice to provide information on appeal rights and should not wait until CMS issues a formal termination notice to challenge the loss of CAH status. Once a hospital receives CMS’ decision stating it will no longer qualify as a CAH, the clock arguably starts ticking – even if the provider agreement remains temporarily in place. Delaying action until the final termination notice could limit a hospital’s ability to plan its future and protect its rights. If the hospital waits and is ultimately forced to convert to another provider type, the transition requires extensive regulatory filings, operational restructuring, and potentially months of lead time to secure state licensure changes, CMS approvals, and new enrollment forms.

Alternatively, if the hospital voluntarily converts to another provider type, it may lose the ability to appeal the CAH determination altogether. Seeking an administrative hearing before an Administrative Law Judge (ALJ) immediately after receiving CMS’ adverse determination will preserve the hospital’s appeal rights and maximize the time available to either overturn the decision or prepare for an orderly conversion.

The ALJ Appeal Process: Your Legal Right to Be Heard

Hospitals may seek review through the U.S. Department of Health and Human Services’ Departmental Appeals Board (DAB), where a federal ALJ will determine whether CMS’ decision was lawful. Under 42 C.F.R. § 498.5, any provider dissatisfied with a CMS determination regarding provider status has the right to an ALJ hearing. Once filed, the ALJ process includes several defined stages: CMS must file any motions to dismiss within 20 days or waive the argument; pre-hearing exchanges and briefing follow on a strict timeline.

If the Appeal Fails: Options for Conversion

If a hospital is unable to retain its CAH designation, it must transition to another Medicare provider type to continue participation in the program. The most common alternatives include conversion to a general acute care hospital, applying for low-volume hospital status, or seeking designation as a sole community hospital. Each of these options offers some financial support or regulatory flexibility under Medicare.

It has been reported that a number of hospitals are converting from CAHs to Rural Emergency Hospitals (REH), a Medicare designation that first became available in January 2023. The REH designation is for small rural facilities that offer 24/7 emergency and outpatient services but do not provide inpatient care. While REH status includes a 5% increase in Medicare outpatient payments, it generally disqualifies the hospital from participating in the 340B drug pricing program. This is a vital consideration for hospitals that rely on pharmaceutical cost savings. Further, Louisiana does not currently license freestanding emergency departments, which presents an additional, significant regulatory hurdle that may be impossible to clear.

Conclusion

A CMS notice of an impending revocation of CAH status is not the end, but it is a critical turning point. Louisiana hospitals in this position must immediately evaluate the validity of the CMS determination, should potentially seek an ALJ hearing, and must understand all implications before converting to another provider type. Early legal intervention and even congressional engagement can be key in preserving both appeal rights and long-term viability.