The Medicare Rural Hospital Flexibility Program (Flex) encourages the development of a statewide rural health plan; conversion of small rural hospitals to Critical Access Hospital (CAH) status; development of rural health networks associated with the CAH facilities; the integration and strengthening of rural emergency medical systems; and the improving of the quality of healthcare services for rural populations. Programs and activities under this program are designed specifically for hospitals designated as CAHs or those investigating converting to a CAH. Major program activities include support for strategic planning; training and development; and quality improvement and data reporting.

A hospital must meet the following criteria to be considered for CAH status:

• Located in a state with a Flex program (such as Texas)
• Provide 24-hour emergency care with either on-site or on-call staff
• Provide no more than 25 inpatient beds
• Have an average length of stay of 96 hours or fewer
• Be either 35 miles from the next nearest hospital or 15 miles over secondary roadways (or mountainous terrain) from the next nearest hospital
• Be located in a rural area or be treated as rural through special allowances under the CAH program