Legislative advocacy is critical in our changing political landscape.  Jefferson Healthcare prioritizes advocacy efforts by visiting our state officials in Olympia regularly to discuss issues which directly impact our residents and visit Washington DC to meet with federal officials.  Our legislative priorities in 2023 focus on supporting rural hospitals across our State as well as issues specific to Jefferson Healthcare.


Support the Reproductive and Gynecological Health Project. Jefferson Healthcare is deeply committed to expanding and advancing high quality, state-of-the-art reproductive and gynecological healthcare. We are requesting an appropriation of $4 million to support the build out of clinic space and an outpatient surgery and procedure room to support this work and look forward to moving this project forward.

Protect patient access to care by reducing barriers to flexible staffing models. Jefferson Healthcare believes that the partnership between front line nurses and administration is the best option for designing staffing models that meet both patient needs and employee wellness. We have an active and vibrant staffing committee that meets consistently with excellent results. In order to maintain our ability to design solutions that meet our local needs, we are opposed to mandated staffing models, including those with caps on mandatory prescheduled on-call, as it limits our ability to ensure our community is receiving the best possible care.

Address difficult to discharge patients. Jefferson Healthcare has seen a precipitous rise in the number of difficult to discharge patients, or patients that no longer need acute inpatient care but have nowhere to go. These patients often are socially complex and require significant resources that we are not able to provide in an acute care inpatient setting. We strongly support addressing guardianship limitations and increasing funding and technical support to State and other agencies that would help get patients to the best possible place for their care.

Support the safety net assessment program. Washington State healthcare is experiencing a financial crisis, and the safety net assessment program (SNAP) is an extension of a program that opens up additional funding streams from the federal government to the State Medicaid program. These dollars are critical to keeping service lines and hospital doors open. This model supports hospitals as well as State initiatives and ensures that hospitals can continue to provide much needed care to our communities.

Critical Access Hospital Modernization Act

Utilizing Critical Access Hospital Infrastructure to Expand Critical Services to Rural Communities

In 2018, Jefferson Healthcare began discussing how to sustainably expand service lines to include things not included on the Medicare Cost Report, which is a federal designation that determines how Jefferson Healthcare is paid as a Critical Access Hospital. Starting with a series of key informant interviews, it was decided that in order to provide all needed services to our community Jefferson Healthcare had to change the legislation around how we are paid. This work led into the Critical Access Hospital Modernization Act, which has the potential to change the landscape for all critical access hospitals across the country. Jefferson Healthcare is continuing to work with our federal legislators and partners on decreasing barriers to support whole-community care.

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Critical access hospitals (CAH), a federal designation for hospitals that meet several conditions known as the Medicare Conditions of Participation, provide the majority of healthcare to rural communities, and receive cost-based reimbursement, including indirect costs (overhead), for the list of eligible services determined in 1997. Cost-based reimbursement covers many services a hospital provides, including emergency department services, inpatient unit, swing beds, and most outpatient services. Home health, hospice, and behavioral health services such as acute mental health and substance use disorder treatment, among others, are not CAH Medicare cost report eligible services, and are attributed significant overhead that is not paid by Medicare. The financial cost for providing these services by a CAH can range in the hundreds of thousands of dollars, and strongly disincentivizes critical access hospitals from providing what are critical services to undeserved communities.

Need for Behavioral Health Services

The opioid crisis disproportionately impacts rural communities, with opioid overdose deaths in rural communities surpassing urban areas by 45%.1 Despite having a similar need for services as urban areas, a fraction of all opioid treatment programs are situated in rural areas. Although CAHs can provide medication assisted treatment in a primary care setting, there is a need for more intensive outpatient programs and full-fledged evaluation and treatment centers that provide both inpatient and intensive outpatient services.

Case example:
In 2017, Jefferson Healthcare, a critical access hospital that serves East Jefferson County on the Olympic Peninsula in Washington State, explored the possibility of acquiring the struggling community mental health agency. The Medicare Cost Report (MCR) impact from adding a non-CAH cost-report eligible into Jefferson Healthcare’s service line was between $411,000 and $550,000 and was determined to not be sustainable long term. This has limited Jefferson Healthcare’s ability to partner with the mental health agency to serve the mental health and substance abuse disorder needs of their community.

This example of hospitals losing revenue for adding a needed service is repeated across the country. Providing home health, hospice, skilled nursing, and opioid treatment services are all non-cost report eligible services, and so adding these to the hospital results in significant financial losses.

Proposed Solution

Critical access hospital infrastructure is a robust system that is designed to meet the needs of their rural communities. Minimizing the financial disincentives associated with providing non-CAH eligible services allows CAHs to provide services that are critical to improving the health of rural communities.
The Critical Access Hospital Modernization Act (CAHMA) seeks to allow CAHs to receive cost-based reimbursement for non-CAH eligible services and eliminate the MCR penalty.
By realigning the Medicare cost report to include critical community services that are not currently included as cost-based eligible on the Medicare cost report, rural communities will be better able to leverage CAH infrastructure to improve the health of their community.
For more information please contact Dunia Faulx at

August, 2019
1 Hancock, C., Mennenga, H., Andrilla, H. (2017, February). Treating the Rural Opioid Epidemic. National Rural Health Policy Brief , Retrieved September 22, 2018, from

Legislative representatives visited Jefferson Healthcare fall of 2022 to learn about our Campus Expansion and Modernization Project.