General Information

Medicare Reference Guide for Sole Community Hospitals

A Hospital is eligible to be classified as a Sole Community Hospital (SCH) if it is located more than 35 miles from other like hospitals. A hospital may also be classified as a SCH if it is located in a rural area AND it meets ONE of the following three conditions:

1) The hospital is located between 25 and 35 miles from other like hospitals AND meets ONE of the following criteria:

  • No more than 25 percent of residents who become hospital inpatients or no more than 25 percent of the Medicare beneficiaries who become hospital inpatients in the hospital’s service area are admitted to other like hospitals located within a 35-mile radius of the hospital or, if larger, within its service area;
  • The hospital has fewer than 50 beds and would meet the 25 percent criterion above were it not for the fact that some beneficiaries or residents were forced to seek specialized care outside of the service
    area due to the unavailability of necessary specialty
    services at the hospital; or
  • Other like hospitals are inaccessible for at least 30 days in each of two out of three years because of local topography or prolonged
    severe weather conditions;

2) The hospital is located between 15 and 25 miles from other like hospitals but because of local topography or periods of prolonged severe weather conditions, the other like hospitals are inaccessible for at least 30 days in each of two out of three years; or

3) Because of distance, posted speed limits, and predictable weather conditions, the travel time between the hospital and the nearest like hospital is at least 45 minutes.

Sole Community Hospital Payments

Payments to SCHs are determined based on whichever of the following yields the greatest aggregate payment for the cost reporting period:

The Federal rate applicable to the hospital;

  • The updated hospital-specific rate based on fiscal year (FY) 1982 costs per discharge;
  • The updated hospital-specific rate based on FY 1987 costs per discharge;
  • The updated hospital-specific rate based on FY 1996 costs per discharge; or
  • The updated hospital-specific rate based on FY 2006 costs per discharge.

To find additional information about SCHs, see Chapter 3 of the Medicare Claims Processing Manual (Pub. 100-4) at http://www.cms.hhs.gov/Manuals on the Centers for Medicare & Medicaid Services website.

Commands