Rural Hospital Flexibility Grant Program (FLEX)
The Medicare Rural Hospital Flexibility (Flex) Program was established by the Balanced Budget Act (BBA) of 1997. Any state with rural hospitals may establish a Flex Program and apply for federal funding that provides for the creation of rural health networks, promotes regionalization of rural health services and improves access to hospitals and other services for rural residents. The Federal Office of Rural Health Policy (FORHP) funds the Flex Program.
The BBA of 1997 also created critical access hospitals (CAHs). CAH designation allows the hospital to be reimbursed on a reasonable cost basis for inpatient and outpatient services provided to Medicare patients (including lab and qualifying ambulance services) and, in some states, Medicaid patients.
Flex funding encourages the development of cooperative systems of care in rural areas, joining together CAHs, emergency medical service (EMS) providers, clinics and health practitioners to increase efficiencies and quality of care. The Flex Program requires states to develop rural health plans and funds their efforts to implement community-level outreach. The Flex Program includes support for the following five program areas:
- Quality improvement
- Financial and operational improvement
- Population health management and EMS integration (optional)
- Designation of CAHs (required if requested)
- Integration of innovative health care models (optional)
Small Rural Hospital Improvement Grant Program (SHIP)
The Small Rural Hospital Improvement Grant Program (SHIP) is supported by the U.S. Department of Health and Human Services, Health Resources and Services Administration’s Federal Office of Rural Health Policy (FORHP). Section 1820(g)(3) of the Social Security Act (SSA) authorizes SHIP to assist eligible hospitals in meeting the costs of implementing data system requirements established under the Medicare Program, including using funds to assist hospitals in participating in improvements in value and quality to health care such as:
- Value-Based Purchasing Programs (VBP)
- Accountable Care Organizations (ACOs)
- Payment Bundling (PB)
Eligible small rural hospitals are located in the United States and its territories and include hospitals with 49 available beds or less. These small rural, non-federal hospitals provide short-term, general acute care to their communities. They may be for-profit, not-for-profit or tribal organizations. Critical access hospitals are eligible for the program.
Fact Sheets for Rural Hospitals:
- American Hospital Association Rural Report
- Executive Summary: Ensuring Local Access to High-quality, Affordable Care
- Challenges Facing Rural Communities and the Roadmap to Ensure Local Access to High-quality, Affordable Care
View Map of Rural Hospitals
Health Systems Support Specialist
mteachout @ utah.gov