The Critical Access Hospital (CAH) program was created by Congress in 1998 to help stabilize the rural health care delivery system. It works by reimbursing rural hospitals for amounts based on the actual costs to the hospital for providing care to Medicare and Medicaid patients. Since the program began, over 800 small, rural hospitals all across the United States have shifted to CAH status.

"This move will be transparent to the community. We will not change the way we care for patients, we will continue offering all of our existing services and no jobs will be eliminated if we are designated as critical access," said Ralph Gabarro, Mayo's CEO.

Over 60% of Mayo's revenue now comes from the Medicare and Medicaid programs, yet Mayo is reimbursed at a rate substantially less than what it costs the hospital to provide those services. Changing to the cost-based reimbursement formula provided by CAH status is a "fiscally responsible change," according to Gabarro.

A Maine Hospital Association study showed that Medicare reimburses Maine hospitals an average of 88 cents, and Medicaid reimburses 80 cents for each dollar of cost.

Eight of Maine's 39 acute care hospitals have already been designated as critical access, and several more are actively considering the change. Existing critical access hospitals are Blue Hill Memorial, Calais Regional Hospital, Charles A. Dean Memorial Hospital in Greenville, Millinocket Regional Hospital, Mt. Desert Island Hospital, Penobscot Valley Hospital in Lincoln, Rumford Hospital and St. Andrews Hospital in Boothbay Harbor.

"When you look at the results from the eight hospitals in Maine that have already gained critical access status, you only see good," said Gabarro. "The federal government came up with the CAH program to preserve access to rural health care, and that is exactly what it has done."

Mayo is now in the process of preparing a formal application to the state Department of Human Services for designation as a critical access hospital. Gabarro expects the application to be forwarded to Augusta in July, and for a DHS survey team to visit Mayo in September. If the application is approved, Mayo could gain CAH designation by Oct. 1.

Mayo will host a community meeting on July 1 to explain the plans to become a critical access hospital. All are invited to attend this information session, scheduled for 6:30 p.m. in the hospital's Sebec/Borestone conference rooms.

The decision to seek critical access status was the result of a nine-month strategic planning process completed at Mayo in February. The change in status is supported by the hospital administration, medical staff, strategic planning committee and Board of Directors.

Mayo meets the basic requirements to become a critical access hospital, such as being licensed as an acute care hospital, being located in a rural designated area, having 24-hour emergency services, having a network arrangement with other hospitals to accommodate transfers and referrals, and maintaining credentialing and quality assurance programs.

The CAH program also limits hospitals to not more than 25 beds for inpatient acute care services, of which up to 10 may be "swing beds" used for either acute care or skilled nursing needs. Critical access hospitals also must meet an average patient length of stay standard of no more than 4 days for all acute beds.

Mayo expects to have no trouble operating within the 25-bed limit or 4-day length of stay requirement. The current average daily patient census is 13 beds, and the average length of stay is 3.2 days.

"The federal law was recently changed to increase the allowable beds up to 25. Prior to that, a critical access hospital could only have 15 beds, and that would not have worked well for us," said Gabarro. "The change gives us the flexibility we need to gain the desired status."

Gabarro expressed appreciation for the efforts of State Sen. Paul Davis of Sangerville and State Rep. Jim Annis of Dover-Foxcroft, who supported action which resulted in Maine conforming to the federal CAH bed-limit change during this year's legislative session.