HJAR Nov/Dec 2025

RURAL HEALTHCARE 10 NOV / DEC 2025 I  HEALTHCARE JOURNAL OF ARKANSAS   Why Critical Access Hospital Status Matters — and How We Got There Amid these challenges, Mena Regional took one of the most consequential steps in its history: transitioning from the Prospec- tive Payment System (PPS) to Critical Access Hospital (CAH) status. While the termmay sound technical, the implications for our community could not be more profound. Created by Congress in 1997, the CAH programwas designed to preserve access to care in rural America by allowing small hos- pitals to receive cost-based reimbursement from Medicare instead of fixed PPS rates. This shift more closely aligns payments with the actual costs of delivering care in low- volume, geographically isolated communi- ties like ours. It helps level the playing field in the face of one of the biggest legislative and regulatory barriers rural hospitals face: the Area Wage Index. Under the old PPS model, CMS adjusted Medicare payments based on regional labor costs, which meant that because rural areas like Polk County have lower average wages, our reimbursements were automatically lower, regardless of the actual costs of care. This inequity has pushed many rural hos- pitals into fiscal crisis and has been a key driver of closures nationwide. Cost-based reimbursement under CAH status reduces the impact of theAreaWage Index, aligning payments more closely with real expenses and giving hospitals like Mena Regional a fighting chance to sustain essential services. For Mena Regional, the path to CAH sta- tus was driven by necessity and guided by collaboration. Our board and leadership team initiated the process in late 2023 after years of financial strain and reimburse- ment challenges made clear that PPS was no longer sustainable. The journey was nei- ther quick nor simple. It required extensive operational restructuring, policy and pro- cedural revisions, coordination with the Arkansas Department of Health, detailed facility assessments, and months of federal review by Centers for Medicare &Medicaid Services (CMS). We officially received notice of our con- version from PPS to CAH on February 12, 2025, with the status retroactively effective to November 13, 2024. However, CMS did not issue our official rate letter until May 28, 2025. This rate letter is a pivotal step of the transition journey. Only after receiving the rate letter could we begin the complex process of renegotiating contracts with pri- vate insurers and aligning our reimburse- ment structure with our new CAH status. This payer contract alignment paves the way for long-term stability and continued care close to home. This transition is not about shrinking our capabilities; it is about ensuring sus- tainability while preserving essential ser- vices. We converted our intensive care unit into a progressive care unit and transitioned our inpatient rehabilitation unit to a swing- bed model, allowing patients — regardless of payer — to remain close to home sur- rounded by family while receiving needed care. Services such as labor and delivery, primary care, outpatient rehabilitation, counseling, imaging, specialty clinics, sleep studies, and comprehensive laboratory ser- vices have continued without interruption. For our patients, the change means more than financial stability. It means the hospital they depend on will remain in their commu- nity. It means local jobs will be protected, emergency services will stay available, and families won’t have to drive hours for care. It means that the heartbeat of Polk County can continue to beat strong. The Challenges That Remain: Payers and Policymakers Even with federal recognition, significant barriers remain. Several major insurers have yet to fully implement our CAH designation within their systems. While we understand the operational complexity involved, these delays in claims processing create substan- tial financial strain. They slow infrastruc- ture improvements, hamper recruitment, and limit innovation. These delays are not just bureaucratic frustrations. They undermine the health and economic stability of the entire region. Each year, Mena Regional manages more than 9,000 emergency visits, 1,400 inpatient stays, 30,000 clinic visits, and 36,000 outpatient ancillary services. If a rural hospital like ours closes, it is not merely a healthcare crisis; it is a community crisis. Jobs disappear, businesses suffer, families relocate, and the fabric of local life begins to fray. Addressing these challenges requires partnership and action from all stakeholders. CMS, theArkansas Legislature, and our congressional delegation play critical roles in shaping policies and funding that sustain rural healthcare. Private payers must actively engage with us to achieve timely implementation of contracts and designations that make care accessible. By working together, we can find practical solutions that strengthen our hospital, support our workforce, and ensure rural communities continue to thrive. Building a Collaborative Future for Rural Healthcare Securing the future of rural healthcare requires more than policy reformor medical innovation. It demands collaboration across sectors, regions, and disciplines. Mena Regional is building on the groundwork laid by partners likeARHP and theArkansas Hospital Association, which have fostered collaboration among providers and shared best practices across the state. We are also working alongside major health systems in Arkansas, whose expertise, resources, and leadership are vital to creating a resilient