Flex Program

The Medicare Rural Hospital Flexibility (Flex) Program was authorized by section 4201 of the Balanced Budget Act of 1997 (BBA), Public Law 105-33. The Flex program provides funding to States for the designation of critical access hospitals (CAHs) in rural communities. Critical Access Hospital designation allows the hospital to be reimbursed on a reasonable cost basis for inpatient and outpatient services (including lab and qualifying ambulance services) provided to Medicare patients.

The core areas of the Programs include support for:

  • Quality Improvement
  • Operational and Financial Improvement
  • Health System Development and Community Engagement

Additional activities within the Flex Program include facilitating the conversion of hospitals to CAH status; supporting network development; and, supporting for workforce issues.

The Flex Program is based on two programs from the early 1990s: the Essential Access Community Hospital and Rural Primary Care Hospital (EACH/RPCH) program and the Montana Medical Assistance Facility (MAF) demonstration project. These programs successfully showed that states, working with their rural communities and providers, could develop networks of limited-service hospitals and other providers, expand the supply of practitioners, improve the financial position of rural hospitals, and foster the integration of services to improve continuity and avoid duplication.

Funding for the Flex Program is provided by the Health Resources and Services Administration's Office of Rural Health Policy (ORHP).

For further information, please contact Tracy Morton at 218-727-9390, ext 227 or tmorton@ruralcenter.org.