Olympic Medical Center  Port Angeles, WA

Olympic Medical Center
Port Angeles, WA

What is an RRC?

The Rural Referral Center (RRC) program was established by Congress to support high-volume rural hospitals that treat a large number of complicated cases and function as regional referral centers. Generally, to be classified as an RRC, a hospital has to be physically located outside a Metropolitan Statistical Area (indicating an urban area) and either have at least 275 beds or meet certain case-mix or discharge criteria.

RRCs are the rural health care providers that provide rural populations with local access to a wide range of health care services. In so doing, RRCs localize care, minimize the need for further referrals and travel to urban areas, and provide services at costs lower than would be incurred in urban areas. These hospitals also commonly establish satellite sites and outreach clinics to provide primary and emergency care services to surrounding underserved communities, a function which is becoming increasingly important as economic factors force many small rural hospitals to close. 

RRCs also are vital to their local economies, as they are typically large employers, generating significant cash outflow into the local economy, boosting the area tax base, and attracting other employers to the area.

Approximately 135 hospitals in 38 states have RRC status.

For these and other reasons, Congress has long appreciated the special role of RRCs in the rural health care community and the need to afford RRCs special recognition and protections to ensure their continued viability and role in the rural health care network.


Special Benefits

Historically, RRC status carried with it several important financial benefits, including a higher standardized amount payment rate than ordinary rural hospitals.  Today, RRCs receive special treatment under geographic reclassification and the Medicare disproportionate share hospital (DSH) program.  With respect to geographic reclassification, hospitals with RRC status are exempt from proximity and certain other requirements.  With respect to DSH, RRCs are not subject to the 12% payment adjustment cap that applies to certain other rural hospitals.  RRCs are also eligible to participate in the 340B program at a lower DSH threshold.