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KGH's new program will benefit unique needs of hospital and community

Ketchikan General Hospital applies for Critical Access status


April 15, 2006

Ketchikan, Alaska - Ketchikan General Hospital (KGH) has applied with the State of Alaska to be designated a Critical Access Hospital. The new status will allow the hospital more flexibility with many federal rules and regulations. In addition, the hospital will be eligible for a higher level of payment from the Medicare program. The Ketchikan General Hospital Governing Board approved the plan at its last meeting.

jpg Patrick Branco KGH CEO

Patrick Branco, KGH CEO

"When Congress made changes in the Medicare program in 1995 they unintentionally penalized small rural hospitals. Rural hospitals have different needs than larger hospitals," said Patrick Branco, KGH CEO. "This program will allow our hospital and others like it to continue providing high quality, affordable health care services right here in our community."

Branco added that Congress' changes caused a severe financial burden on small hospitals that rely on Medicare to pay for 60 to 80 percent of the services provided. In addition, when Congress passed the Balanced Budget Act of 1997 it further cut the Medicare program, even more heavily impacting small hospitals.

When Congress recognized these problems, they created the Critical Access Hospital program. And in 1997, the Alaska Legislature approved the Critical Access Hospital program for Alaska.

"Our patients can count on receiving the same services and high quality care with this new program," said Branco, "In reality, most people won't even notice the small changes that will occur because the majority of the change will come from internal operations.

The benefits of the Critical Access Hospital program include:

  • A Critical Access Hospital receives a higher level of payment from Medicare than the current system allows. Currently, the Medicare program does not pay hospitals for the actual cost of the services provided. Instead, Medicare uses a complex system that is based on a number of variables. A Critical Access Hospital will receive a new type of Medicare payment; in most cases the result will be an increase in Medicare payment.
  • The law permits Critical Access Hospitals to care for patients whose needs require that they stay in the hospital longer than four days. However it is important to note that CAHs are required to maintain an average length of stay of no more than four days, which is reviewed on an annual basis. While this may sound like a short period of time, actually it is not. The fact is new technologies and advances in surgical procedures have significantly lowered the number of days a patient will stay in the hospital. In Alaska, patients spend an average of 3.2 days in rural hospitals. The four-day rule does not apply to each individual patient, but instead asks that local hospitals maintain an average length of stay of four days for all of their patients combined. Therefore, patients admitted to CAHs should see little or no change.
  • A Critical Access Hospital has a formal agreement with another, larger hospital. If necessary, a patient will be transferred to a larger hospital. Formal arrangements will be made with a nearby hospital to ensure that a patient's care will not be disrupted. Referral patterns will not change. Patients will continue working with their physicians to determine which hospital will best meet their needs.
  • A Critical Access Hospital can have up to 25 patient beds for acute care services. On average, hospitals that become critical access have fewer than 25 patients at any one time, so there will always be beds available for patients who need care. Critical Access Hospitals are not restricted from having other levels of service such as long-term care.
  • A Critical Access Hospital must provide inpatient care, emergency care, laboratory services and radiology services. Believe it or not, a regular hospital is not required by law to provide emergency services. A Critical Access Hospital, however, must agree to provide 24-hour coverage of emergency services.
  • Management at a Critical Access Hospital has more flexibility than other hospitals. Increased flexibility allows hospital administrators to better manage their facilities, and meet the needs of their communities. Critical Access Hospitals have fewer federal restrictions, allowing them to operate more efficiently and in the best interest of patients.

"We are looking forward to the opportunities this new program will provide our hospital" said Bob Berto, KGH Board Vice Chairman. "Ketchikan and surrounding communities only stand to benefit from this program through continued access to high quality, affordable health care.

The application process takes approximately six months to complete and includes inspection from the State of Alaska. The federal Health Care Financing Administration must also approve the application.


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