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Alabama Flex Grant Program

The Medicare Rural Hospital Flexibility (Flex) Program was established by the Balanced Budget Act (BBA) of 1997. Any state with rural hospitals may establish a Flex Program and apply for federal funding that provides for the creation of rural health networks, promotes regionalization of rural health services, and improves access to hospitals and other services for rural residents. The Federal Office of Rural Health Policy (FORHP) funds the Flex Program.

The BBA of 1997 also created critical access hospitals (CAHs). CAH designation allows the hospital to be reimbursed on a reasonable cost basis for inpatient and outpatient services provided to Medicare patients (including lab and qualifying ambulance services) and, in some states, Medicaid patients. For additional information see: CAH designation status and benefits.

Alabama's Flex Grant Program is administered by the Alabama Department of Public Health (ADPH) through the State Office of Rural Health (SORH) and a cooperative agreement with the Alabama Hospital Association (AlaHA). Representatives from each form the Alabama Flex Grant Oversight Committee, which provides direction to the program. Eligible hospitals are Non-Federal, Short-Term, General Acute Care Facilities, with 25 or Fewer - Acute Care Inpatient Beds. They must also meet specific geographic location criteria. Five hospitals are currently designated CAHs in our state: Choctaw General, Red Bay Hospital, St. Vincent's Blount, Tanner - East Alabama Medical Center and Washington County Hospital.

OPCRH and AlaHA support Flex hospitals by assisting in their pursuit of financial viability and quality improvement initiatives They further support Flex hospitals by collecting and disseminating health-related information, coordinating rural resources, providing technical assistance, and promoting recruitment to improve access. Flex funding encourages the development of cooperative systems of care in rural areas, joining together CAHs, emergency medical service (EMS) providers, clinics, and health practitioners to increase efficiencies and quality of care. The Flex Program requires states to develop rural health plans and funds their efforts to implement community-level outreach. The Flex Program includes support for the following program areas:

  • CAH Quality Improvement (required)
  • CAH Operational and Financial Improvement (required)
  • CAH Population Health Improvement (optional)
  • Rural Emergency Medical Services (EMS) Improvement (optional)
  • Rural Innovative Model Development (optional)
  • CAH Designation (required if requested)

 Alabama Flex - Quality Improvement Initiatives

Alabama’s critical access hospitals (CAHs) participated in quarterly network meetings with the Rural Quality Network (RQN), where participants worked to address specific quality measures. Hospitals shared best practices and tools to address the Emergency Department Transfer Communication (EDTC) and MBQIP measures along with Hospital Compare measures.  

Medicare Beneficiary Quality Improvement Projects (MBQIP) focus on improving the quality of care that CAHs provide. CAHs that wish to participate in Flex-funded activities must participate and report in MBQIP core quality measures.

Alabama’s CAHs also participate in a nationwide - Quality Improvement Labs (QIL) Through in-person meetings, webinars and network collaboration, Alabama’s CAHs are improving the quality and standards of care for patients in their communities. Internal data collection and reporting have also improved as a result of QIL participation.

 Alabama Flex - Quality Improvement Initiatives

Flex funds are utilized to assist Alabama’s CAHs with feasibility studies on a rotating basis. Financial feasibility studies, conducted by a national consultant, are in-depth reviews of the hospital’s cost report resulting in recommendations to improve the financial and operational performance. Participation in the swing bed project also addressed the impact of swing beds and the financial bottom line of hospitals. A four-part cost report training webinar series was hosted by a consultant for CAHs to be able to expand their knowledge of completing the cost report and the impact the cost report had on reimbursement rates.

Alabama Flex – Population Health Improvement Initiatives

The Alabama Flex Program continues to encourage the identification of areas for improvement with defined targets and measurable outcomes. A minimum standard of reporting on outcomes is requested from the participating state programs. The Alabama Flex Program identifies through the RQN our hospitals’ evolving needs from the current industry and rural healthcare environmental factors. Any barriers which hinder CAHs ability to continuously improve rural population health; the Alabama Flex Program will work to strategically address and assist. Through targeted workplan activities, contracted consultants, professional development education, investment value analysis, and technical assistance; the program seeks to continuously facilitate and improve our CAH’s impact and value to rural populations across our state.

Alabama Flex – Strategic Partnerships & Non-Traditional Partners

The Alabama Flex Program is always looking for ways to cultivate intra/inter-agency collaboration across our state and this country. We believe industry collaboration is a force multiplier and that our combined efforts will provide an even greater impact on the providers and patients we serve. If your organization has a rural health-related initiative, please don’t hesitate to contact our office anytime. We will look forward to speaking with you.


Any additional questions or technical assistance regarding Alabama Flex Grant Program should be directed to Stanley Woodson via email or (334) 206-5441, or Jane Knight via email or (334) 272-8781.

Page last updated: March 24, 2023