Evaluation of the Rural Community Hospital Demonstration (RCHD)
Dating to 2003, the Rural Community Hospital Demonstration (RCHD) provides enhanced Medicare reimbursement for inpatient services to small rural hospitals that do not qualify as critical access hospitals (CAHs). The RCHD is designed to increase the capability of these hospitals to meet the healthcare needs of rural beneficiaries in their service areas. The demonstration tests payment under a reasonable cost-based methodology for Medicare inpatient hospital services furnished by rural hospitals with fewer than 51 acute care inpatient beds that have 24-hour emergency care services and that are ineligible to be or have not been designated as CAHs.
AIR is leading the evaluation of the RCHD, which has twice been extended by Congress, for the Centers for Medicare & Medicaid Services (CMS). The mixed-methods evaluation examines the demonstration's effects on Medicare payments and hospital financial condition using CMS hospital cost report data, other secondary data sources, and interviews with hospital leaders. The evaluation includes a difference-in-differences design to generate impact estimates for the model.