Cost Certainty in Uncertain Times
Why Time Studies Matter More Than Ever for Critical Access Hospitals (CAHs) After the Big Beautiful Bill
The passing of the Big Beautiful Bill has introduced a new layer of uncertainty into the financial outlook for Critical Access Hospitals. While many of the bill’s implications will unfold over the coming months and years, one thing is already certain: the financial environment for CAHs just got more complex. In this new reality, the margin for error has narrowed.
Across the country, CAH leaders are working to navigate this shifting landscape without overextending already-stretched teams. Everyone is looking for ways to stabilize operations, protect their communities, and future-proof their reimbursement strategy. While no single solution can address every challenge, certain steps deliver an outsized return for the effort required. For many CAHs, improving time studies is one of those steps—a straightforward change that can yield significant financial return.
A Quiet Liability
For most Critical Access Hospitals, time studies have become a quiet liability. Legacy processes are tedious, inconsistent, and often inaccurate. Manual logs are prone to human error and often fail to accurately reflect the actual distribution of standby time, administrative time, or the allocation of work across departments for individuals who float across units.
That disconnect has consequences. When time and cost allocations aren’t accurately captured, hospitals risk leaving money on the table, or worse, face clawbacks down the road.
The good news is: this problem is both visible and solvable.
Three Places Dollars Slip
Many CAHs are losing reimbursable dollars every day. These gaps often appear small, but add up quickly. Here are three of the most common and correctable examples:
• Emergency Department Part A (Standby)
CAHs are federally required to provide 24/7 emergency care services, with a qualified provider available on-site or within a CMS-defined response window. Because this coverage is mandated, it’s also reimbursable—if it is properly documented. CMS allows cost-based reimbursement for on-call emergency providers, but only when supported by time studies that accurately allocate provider time for Part A. Without proper tracking, CAHs risk missing out on dollars they’re entitled to for simply meeting regulatory requirements.
• Cost Allocation for Cross-Departmental Staff
In CAHs, it’s common for staff to wear multiple hats. Physicians, nurses, PCTs, and support personnel frequently rotate between departments to meet daily needs. However, when their time is recorded under only one cost center, cost reports fail to accurately reflect the true distribution of work. For cost-based reimbursed hospitals, this matters. Accurate and defensible time allocation to the appropriate cost centers ensures that reimbursement reflects the actual cost of care delivery. In many cases, where higher Medicare mixes prevail, that means reimbursement increases.
• Provider Administrative Time
Part A time doesn’t end at the Emergency Department. Providers involved in administrative functions, whether overseeing quality, leading departments, or managing education, often spend a meaningful portion of their time outside of direct patient care. When that time isn’t captured and correctly allocated, CAHs lose the ability to recover costs they’re entitled to. Many hospitals either skip this step or rely on outdated, manual methods that create audit risk and leave reimbursement on the table.
Each of these examples represents a missed opportunity—one that hospitals can’t afford to overlook in today’s environment.
VersaBadge: Purpose-Built for Rural Realities
VersaBadge was founded to address this specific issue. From the start, we have been focused on helping rural hospitals to improve their financial health, replacing the guesswork of traditional, manual time studies with defensible data that directly supports reimbursement. Among CAHs, time studies are widely used, often incorrect, and almost universally detested. Yet when done accurately, they can deliver significant financial impact.
That focus has resonated. Today, VersaBadge serves one in every six CAHs across the country. And while our platform has grown, time studies remain one of the highest-value areas we support.
What sets VersaBadge apart is that it’s purpose-built for CAHs. Most rural hospitals cannot dedicate extra staff to time studies, and with budgets tight and administrative capacity limited, any solution must fit seamlessly into existing operations. VersaBadge does exactly that. The platform captures data passively and requires virtually no IT lift. The result is accurate, auditable cost allocation without added burden or complexity. It can also be easily expanded to address quality and safety use cases, creating even greater value over time.
The Bottom Line
CAHs can no longer afford to rely on assumptions, but even amid uncertainty, there are moves that create stability.
Automated, accurate time studies are one of the clearest, most practical steps a hospital can take to protect reimbursement, reduce audit exposure, and bring greater clarity to cost reports.
Book a discovery call to connect with the VersaBadge team and receive a no-cost or obligation Return on Investment review.
