The state Rural Hospital Flexibility Grant Program is a major national initiative to strengthen rural health care by:

  1. Allowing small hospitals the flexibility to reconfigure their operations, particularly for acute inpatient care as Critical Access Hospitals (CAHs).
  2. Offering cost-based reimbursement for Medicare acute inpatient and outpatient services.
  3. Encouraging the development of rural-centric health networks.
  4. Offering grants to states to help implement a CAH program in the context of broader initiatives to strengthen the rural health care infrastructure.

The CAH program requires participating states to develop rural health plans and funds the states to support and implement community-level outreach and technical assistance. Although focused on very small rural hospitals, this complex intervention operates on the national, state, community, and facility levels and covers a broad range of health service issues.

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