RURAL HOSPITALS: Gore Launches $13M Grant Program

      Vice President Al Gore Friday announced the first grant awards under the administration's new Rural Hospital Flexibility Program, giving $13 million to 43 states to support a new approach in improving access to health care in rural communities and developing health care networks to expand services. Gore said, "For people living in rural communities rural hospitals are a lifeline, and yet today 20 million Americans in our rural communities do not have adequate access to quality health care. That is why we are taking this important step to help assure that rural hospitals can meet the health care needs of working families." The Rural Hospital Flexibility Program is a five-year, $125 million program administered by HHS' Health Resources and Services Administration's Office of Rural Health Policy. The nationwide program allows the creation of a new category of rural hospitals called "critical access hospitals" (CAHs). The new designation entitles a rural public or not-for-profit hospital to receive cost-based reimbursement for their Medicare patients. For a hospital to qualify as a CAH, it must operate a limited number of inpatient beds, keep patients a maximum of four days, provide 24-hour emergency medical services and be designated by the state. States will use the HRSA grant funds to develop a rural health plan, help communities decide which hospitals should convert to CAHs and promote the development of rural health networks that include enhanced delivery of emergency medical services. HHS Secretary Donna Shalala said, "These grants will help rescue financially at-risk rural hospitals and make sure they continue to provide much needed care. We're giving states the resources and flexibility to develop their own unique plans for revitalizing small rural hospitals and building the strong networks needed to give rural residents access to comprehensive, quality health care." HRSA Administrator Claude Earl Fox said, "What's unique about this new program is that it gives rural communities a chance to save their local hospitals, and helps develop a broader range of essential health care services to their residents through the community networks," said The 43 states will receive amounts ranging from $81,325 to $574,057. Two states, Rhode Island and New Jersey, did not qualify because they do not have any counties in non-metropolitan areas, and five states -- Connecticut, Delaware, Pennsylvania, Utah and Oregon -- chose not to apply for the additional funding but remain eligible in subsequent years (HRSA release, 9/10).