What is a nonprofit Critical Access Hospital?

Our South Big Horn County Hospital District, Three Rivers Health, is a nonprofit Critical Access Hospital (CAH), which receives funding from the county, primarily through property tax mill levies. This supports operating costs, capital improvements and essential healthcare services in our rural community. As a designated special district, it relies on these local tax funds to bridge financial gaps, as well as maintaining and replacing equipment. Similar to other rural Wyoming hospitals, the district faces financial challenges in providing accessible healthcare, making local tax support crucial. The loss of 25% of the county assessment (due to the 2025 legislative property tax relief SF 69), has impacted operations at TRH, and additional cuts to our hospital could be devastating.

When I became a member of the Three Rivers Health Board of Trustees, like many community members, I had no idea what it meant to be a nonprofit CAH. In addition, I was misinformed about our hospital’s capabilities and its limits to provide healthcare. To meet the requirement of a CAH, TRH must be in a rural area and can’t be closer than 35 miles to another hospital. Although, since the South Big Horn Hospital District was granted CAH status prior to 2006, this provision can be waived. 

A CAH must provide 24-hour, seven days a week fully staffed emergency medical care, which includes radiology facilities (X-ray and ultrasound), a medical lab and a pharmacy. There are limits to what a CAH can provide, such as not exceeding 25 beds and maintaining an average length of stay following acute care of no more than 96 hours. However, TRH was granted swing bed approval by the state, which means it can provide post-hospital, skilled nursing level care in inpatient beds for a longer period. All CAHs must be compliant with the Federal requirements set forth in the Medicare Conditions of Participation (CoP) in order to receive Medicare/ Medicaid payments. If you would like to review this information, it can be found at the U.S. Centers for Medicare and Medicaid Services website CMS.gov, search for Critical Access Hospital. 

As a nonprofit hospital, TRH reinvests excess revenue into community benefits, services, and equipment rather than distributing profits to owners or shareholders, which allows it to qualify for tax-exempt status. Under the Affordable Care Act, nonprofit hospitals must provide community benefits and focus on community health needs to maintain this status. Therefore, TRH periodically conducts a Community Health Needs Assessment and adjusts its healthcare objectives to meet the community health needs realized by this survey. Compared to a for-profit hospital, nonprofit hospitals provide less profitable services such as emergency care, mental health, and maternity care services. Charity care, to subsidize low-income patients, is part of the TRH guiding principle, as well as free high school sports physicals.

Based on 2015-2019 data, for-profit hospitals are generally less likely to offer comprehensive, high-cost services like 24/7 emergency departments compared to nonprofit hospitals, often focusing instead on specialized, high-margin areas, such as elective surgeries. While many for-profit hospitals operate emergency rooms, they are more frequently located in areas with higher private insurance coverage and lower Medicare/Medicaid populations. With 28% of Big Horn County’s residents over 60, folks on Medicare make up a substantial portion of Three Rivers Health patients.

To meet the needs of our community, TRH has utilized the available healthcare management tools by meeting the requirements of a CAH and a nonprofit hospital. This ensures the highest standards of rural healthcare, while taking advantage of tax incentives and ensuring their status with Medicare and Medicaid is satisfied. This is often a difficult balancing act, therefore it’s important to remember the significance of Big Horn County financial support and the support from our community.

Jeff Petty is the Three Rivers Health Board of Trustees Chair.