A sole community hospital (SCH) is classified by the Centers for Medicare & Medicaid Services (CMS) under 42 CFR 412.92 based on geographic access to other like hospitals; a Medicare-dependent, small rural hospital (MDH) meets 42 CFR 412.108. CMS describes MDH authorization through December 31, 2026, absent further legislation, and a December 1 application date for MDHs seeking SCH status at expiration. Integral Healthcare Solutions (IHS) prepares classification evidence for hospital leaders to review and submit.
Sources: page opened November 5, 2026 for each linked authority. Current eCFR: 42 CFR 412.92, Special treatment: Sole community hospitals; 42 CFR 412.108, Special treatment: Medicare-dependent, small rural hospitals (Title 42 last amended October 8, 2026). Also reviewed: CMS FY 2027 IPPS/LTCH PPS final rule, August 4, 2026, and MM14415, release date April 14, 2026.
What is sole community hospital classification?
Section 412.92(a) gives two routes: a hospital qualifies if it is located more than 35 miles from other like hospitals, or if it is located in a rural area (as defined in 42 CFR 412.64) and meets one of the conditions below (42 CFR 412.92). This page does not estimate payment.
| Rural-area route | What the section requires |
|---|---|
| 25 to 35 miles from like hospitals, (a)(1) | One of three criteria: (i) no more than 25 percent of residents, or of Medicare beneficiaries, who become hospital inpatients in the service area are admitted to other like hospitals within a 35-mile radius or, if larger, within the service area; (ii) fewer than 50 beds, and the MAC certifies the hospital would have met (i) but for beneficiaries or residents forced to seek care outside the service area because necessary specialty services were unavailable at the community hospital; or (iii) because of local topography or periods of prolonged severe weather conditions, the other like hospitals are inaccessible for at least 30 days in each 2 out of 3 years. |
| 15 to 25 miles, (a)(2) | Because of local topography or periods of prolonged severe weather conditions, the other like hospitals are inaccessible for at least 30 days in each 2 out of 3 years. |
| Travel time, (a)(3) | Because of distance, posted speed limits and predictable weather conditions, the travel time to the nearest like hospital is at least 45 minutes. |
Additional multicampus requirements under 412.92(a)(4): for a main campus and remote locations under one provider agreement, providing and billing IPPS services and meeting 413.65 provider-based criteria, combine data for (a)(1)(i) and (ii). Each site must independently satisfy the applicable mileage, rural-location, accessibility and travel-time requirements.
Under 42 CFR 412.92(c), miles means the shortest distance over improved roads: publicly available roads maintained by a local, State or Federal government, including the paved surface to the hospital entrance. A like hospital furnishes short-term acute care; for cost reporting periods beginning on or after October 1, 2002, a nearby hospital is excluded if its inpatient days at the acute care PPS level are no more than 8 percent of the applicant’s similarly calculated days. The service area supplies at least 75 percent of inpatients during the most recent 12-month cost reporting period before application. If the latest period is shorter than 12 months, use the preceding most recent period of 12 months or longer.
Where is the request filed and what data supports it?
The hospital applies to its Medicare Administrative Contractor (MAC), which recommends approval or disapproval to CMS (412.92(b)(1)). For (a)(1)(i) or (ii), provide patient origin data for all inpatient discharges to establish service-area boundaries, plus data from all other hospitals within 35 miles or the larger service area to document the admissions test. ZIP codes are one example. For applications received on or after October 1, 2018, approved SCH status takes effect when the MAC receives the complete application, except under 412.92(b)(2)(v) and (vi).
What is Medicare-dependent hospital classification?
42 CFR 412.108(a)(1) covers cost reporting periods beginning on or after April 1, 1990 and ending before October 1, 1994, or discharges on or after October 1, 1997 and before January 1, 2027. Its conditions include:
- Rural location as defined in subpart D, or location in a State with no rural area and satisfaction of 412.103(a)(1) or (3), or (a)(2) as of January 1, 2018.
- 100 or fewer beds under 412.105(b) during the cost reporting period; no SCH classification.
- At least 60 percent Medicare Part A inpatient days or discharges in the periods specified in (a)(1)(iv): (A) the cost reporting period ending on or after September 30, 1987 and before September 30, 1988; (B) only if no (A) period exists, the period beginning on or after October 1, 1986 and before October 1, 1987; (C) at least two of the last three most recent audited periods with settled cost reports.
If a selected period is shorter than 12 months, (a)(1)(v) substitutes the preceding most recent period of 12 months or longer. Section (a)(2) counts acute inpatient stays, including acute-care swing-bed stays, excludes PPS-excluded and newborn nursery units, and counts transfers defined in 412.4(b) as discharges. Under (a)(3), hospitals with a main campus and remote locations under one provider agreement, providing and billing IPPS services and meeting 413.65 provider-based criteria, must combine data for (a)(1)-(2) and satisfy the location requirement at each site.
The MAC determines eligibility. After disqualification, reapplication requires another audited, settled cost reporting period and a written request with documentation (412.108(b)(1), (7)).
Does MDH status end, and what is the December 1 date?
CMS’s FY 2027 final rule, 91 FR 49848 states that MDH authorization ends after December 31, 2026 absent Congressional action; affected hospitals then lose MDH status and receive the Federal rate.
Under 412.92(b)(2)(v), an MDH applying because the program expires receives SCH status the following day only if approved, it applies “prior to 30 days before” expiration, and it requests that effective date. CMS MM14415 says to apply “by December 1, 2026.” These formulations differ; the hospital should resolve timing with its MAC before relying on December 1. IHS does not obtain that determination.
If the program is extended, an MDH that became an SCH in anticipation of expiration must reapply under 412.108(b) and meet 412.108(a) to return to MDH status. No later extension was found in the sources reviewed November 5, 2026; confirm current status with CMS.
Who needs it and what triggers it
- An MDH considering SCH status when the MDH program expires, with the timing issue described above to resolve.
- A rural hospital 15 to 35 miles from like hospitals that has not yet assembled patient-origin data.
- An existing SCH that must report listed events, such as a new hospital in its service area, to the MAC within 30 days (412.92(b)(3)(ii)).
How IHS helps
IHS is a consulting firm with three practice lines: accreditation consulting, compliance services and program development. This is compliance services work, led by Thomas G. Goddard, JD, PhD, who founded IHS in 2002 and served as URAC's Chief Operating Officer and General Counsel.
- Assess gaps against 412.92 and 412.108; assign evidence owners.
- Map discharge, patient-origin and campus data to applicable criteria.
- Draft the evidence packet and supporting narratives for hospital review, with clinical content approved by the client’s clinicians where needed.
- Conduct a mock review and support readiness for the hospital’s submission, using timing confirmed by the hospital.
What you supply: hospital leaders, who submit the request; data owners, who supply patient-origin and discharge data; and reimbursement staff.
The real limit: IHS does not compute payment effects and does not file. IHS does not communicate with your MAC or CMS; your hospital submits the request.
What to have ready
Checklist references use the current eCFR version identified above (page opened November 5, 2026):
- Like-hospital inpatient-day comparisons and improved-road distances under 42 CFR 412.92(c)(1)-(2).
- Travel times reflecting distance, posted speed limits and predictable weather under 42 CFR 412.92(a)(3).
- Topography/weather inaccessibility records under 42 CFR 412.92(a)(1)(iii) and (a)(2).
- All-discharge patient-origin data for requests under (a)(1)(i) or (ii); ZIP codes are an example, not a mandated format (42 CFR 412.92(b)(1)(ii)(A)).
- Other-hospital patient-origin data within 35 miles or the larger service area; if required Medicare residence information cannot be obtained, the hospital may request it from CMS, whose supplied information controls the residence determination (42 CFR 412.92(b)(1)(ii)(B)-(iii)).
- Bed counts, Medicare Part A data, applicable audited/settled cost reports and short-period substitutions under 42 CFR 412.108(a)(1)-(3).
To see where your data stands, start with the introductory call.
How it compares
SCH concerns geographic access under 42 CFR 412.92; CMS decides. MDH concerns the location alternatives, bed count, Medicare share and other conditions in 42 CFR 412.108; the MAC decides. The classifications cannot be held together. Rural emergency hospital conversion and hospital swing bed program readiness concern different services.
What it costs
Neither 412.92 nor 412.108 states a fee for a classification request, and this page cites no payment figures. IHS scopes each engagement after a free introductory call, and the number of campuses and discharges moves the scope.
What this is not
- It is not legal advice or a payment projection. IHS is a consulting firm, not a law firm.
- It is not a classification, which the MAC and CMS decide, or a statement that MDH status continues after December 31, 2026.
Frequently asked questions
What makes a hospital a sole community hospital?
CMS classifies a hospital more than 35 miles from other like hospitals, or a hospital in a rural area as defined in 412.64 meeting an applicable mileage, accessibility or travel-time condition. Multicampus requirements also apply (42 CFR 412.92(a)).
What distance and travel-time tests apply?
Rural hospitals 25-35 miles from like hospitals must meet one of the three criteria in 412.92(a)(1), detailed above. At 15-25 miles, topography or prolonged severe weather must make other like hospitals inaccessible for at least 30 days in each 2 out of 3 years. The rural travel-time route requires at least 45 minutes to the nearest like hospital because of distance, posted speed limits and predictable weather (42 CFR 412.92(a)(1)-(3)).
What patient origin data is needed?
For requests under (a)(1)(i) or (ii), provide all-discharge patient-origin data to define the service area. Also provide data from all other hospitals within 35 miles or the larger service area to document the admissions test (42 CFR 412.92(b)(1)(ii)).
Where is the request filed, and who decides?
The hospital applies to its MAC, which sends its recommendation to CMS; CMS sends approval or disapproval to the MAC (42 CFR 412.92(b)(1)). Your hospital submits; IHS does not.
When does SCH status take effect, and does it need renewal?
For applications received on or after October 1, 2018, approved status starts when the MAC receives the complete application, except under 412.92(b)(2)(v) and (vi). Approval continues without reapproval unless the underlying circumstances change; reporting duties apply (42 CFR 412.92(b)(2)-(3)).
What are the MDH conditions?
For discharges on or after October 1, 1997 and before January 1, 2027, the location alternatives, 100-or-fewer-bed rule, SCH exclusion and 60-percent Medicare Part A test apply. Use the full period, counting and multicampus conditions described above (42 CFR 412.108(a)).
Does MDH status expire, and what is the December 1 date?
CMS describes expiration after December 31, 2026 absent Congressional action (91 FR 49848). For an MDH applying because the program expires, 412.92(b)(2)(v) makes next-day SCH status conditional on approval, applying “prior to 30 days before” expiration and requesting that effective date. CMS MM14415 says “by December 1, 2026”; the hospital should resolve this timing difference with its MAC. No later extension was found in sources reviewed November 5, 2026; confirm with CMS.
Can a hospital be both an SCH and an MDH?
No. MDH eligibility excludes hospitals also classified as SCHs (42 CFR 412.108(a)(1)(iii)).