The Medicare rural pass-through program lets certain small rural hospitals get paid for CRNA services at reasonable cost through their cost report. The hospital gets reimbursed for the CRNA's actual cost instead of billing each case to the Part B fee schedule.
For small hospitals that only do a few hundred anesthetics a year, fee schedule billing often cannot cover a full-time CRNA salary. The pass-through exists so those hospitals can still keep anesthesia in house. If you work in a critical access hospital or a small rural facility, there is a good chance this program is paying your salary.
Key points
- Qualifying rural hospitals are paid CRNA cost through the cost report.
- Limits: rural location, 2,080 anesthetist hours, 800 procedures a year.
- The CRNA signs away separate Medicare Part B billing at that facility.
- Your pay is a salary or contract rate, not collections.
How the pass-through works
Under normal Medicare rules, anesthesia is billed per case. Payment is base units plus time units, multiplied by a conversion factor. A hospital doing 300 cases a year would collect far less from that formula than a CRNA costs to employ.
The pass-through flips the model. A qualifying rural hospital or critical access hospital elects to be paid the reasonable cost of its CRNA services. CMS settles the amount through the hospital's Medicare cost report, and the hospital does not bill those CRNA services to the Part B fee schedule.
The trade is simple. The hospital gets cost-based payment and predictable funding for one CRNA position. In exchange, the CRNA agrees in writing not to bill Medicare separately for those services.
Which hospitals qualify
The rules sit in 42 CFR 412.113(c). As summarized by CMS and its Medicare contractors, a hospital or critical access hospital must meet all of the following. Verify current criteria with your Medicare Administrative Contractor before relying on them.
- It is located in a rural area, or it has reclassified as rural under 42 CFR 412.103. Urban hospitals that reclassify as rural have been able to qualify since December 2010.
- It employs or contracts with a qualified nonphysician anesthetist, a CRNA or certified anesthesiologist assistant. It can use more than one person, but total anesthetist hours cannot exceed 2,080 per year, roughly one full-time position.
- Its volume of surgical procedures requiring anesthesia, inpatient and outpatient combined, stays at or below the program's annual limit. To keep the exemption each year, the hospital must show its prior-year procedures requiring anesthesia did not exceed 800.
- Each CRNA agrees in writing not to bill Medicare on a fee basis for services furnished at that facility.
Hospitals re-apply to their Medicare Administrative Contractor each year, with documentation such as CRNA contracts, hours records, and a surgical log. Deadlines are strict, typically by the end of the calendar year.
What this means for you as a CRNA
If you are the solo CRNA at a pass-through hospital, a few practical things follow.
Your pay is a salary or contract rate, not collections. The hospital is funded on its costs, so there is no production upside tied to case volume. See how different pay structures compare at /how-crnas-get-paid/ and run numbers with the /crna-take-home-pay/ calculator.
You cannot bill Medicare Part B for those cases. You will sign a statement agreeing to that. Billing Part B separately for a pass-through case can jeopardize the hospital's exemption.
The hospital watches its case count. If annual anesthesia procedures creep above the limit, the facility loses the exemption and must bill the fee schedule. Growing surgical volume is good news for the hospital overall, but it changes the anesthesia funding model.
Your hours matter. The 2,080-hour cap covers all anesthetist hours at the facility. If the hospital adds a second CRNA or regular locum coverage, it can exceed the cap and lose eligibility.
These jobs are often stable, autonomous practice. Most pass-through hospitals sit in states that have opted out of the Medicare physician supervision requirement, though the two rules are separate. See /crna-opt-out-states/ for the current opt-out list.
Why the program matters
Independent CRNAs are the main anesthesia workforce in rural America. AANA notes that CRNAs are the primary anesthesia providers in most rural hospitals. Without the pass-through, many critical access hospitals could not afford 24/7 anesthesia call, which means no surgery, no obstetrics, and limited emergency stabilization.
If you are weighing a rural job, ask the administrator whether the hospital uses the pass-through. It tells you the anesthesia department is funded as a cost center with one FTE, which shapes staffing, call expectations, and how a raise request gets evaluated. For broader contract questions, see /crna-contract-negotiation/.
Questions
Is the pass-through the same as critical access hospital status?
No. Critical access hospital is a separate Medicare designation. Both CAHs and other small rural hospitals can use the CRNA pass-through if they meet the criteria above.
Does the pass-through change what patients pay?
The hospital's payment method changes, and the CRNA service is not billed to Part B as a separate professional claim. Patient cost-sharing questions should go to the hospital's billing office.
Can a hospital with two full-time CRNAs use it?
No. Total anesthetist hours are capped at 2,080 per year, about one full-time equivalent, even if the hours are split across several people.
This page is general information, not billing, legal, or financial advice. Hospitals should confirm current rules with their Medicare Administrative Contractor.