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VALLEY REGIONAL HOSPITAL UNDERGOES SUCCESSFUL JOINT COMMISSION SURVEY; SIMULTANEOUSLY EARNS RECOMMENDATION FOR CRITICAL ACCESS HOSPITAL DESIGNATION FROM CENTERS FOR MEDICARE & MEDICAID (CMS) Claremont, NH, October 4, 2004 By demonstrating compliance with the Joint Commission on Accreditation of Healthcare Organizations national standards for health care quality and safety, Valley Regional Hospital is well on the way toward earning the Joint Commissions Gold Seal of Approval. We are seeking accreditation for our organization because we want to demonstrate our commitment to our patients safety and quality of care, says Claire Bowen, President and CEO of Valley Regional Hospital. We view obtaining Joint Commission accreditation as another step toward achieving absolute excellence in patient care. Above all, the national standards are intended to stimulate continuous, systematic and organization-wide improvement in an organizations performance and the outcomes of care, says Kurt Patton, executive director, Hospital Accreditation Program, Joint Commission. The community should be proud that Valley Regional Hospital is focusing on the most challenging goal to continuously raise quality and safety to higher levels. The accreditation, which VRH expects to be processed within 5 months, will be valid for a three-year period from the grant date. Following a 10-year hiatus, Valley Regional Hospital sought the JCAHO Gold Seal of Approval after an intensive two-day survey by the commission, which examined patient care through a tracer methodology and direct observation of care. Surveyors lauded VRH for the commitment of its medical staff and Board of Trustees to the process. This isnt typically seen, says Helen Tavares, RN, one of the surveyors on site. Having a successful survey means VRH complies with the highest national standards for safety and quality of care not only today, says Bowen, but also that we must, and will, continue to meet these standards 24/7, 365 days a year. At precisely the same time the Joint Commission was surveying Valley Regional Hospital, the Centers for Medicare and Medicaid (CMS) was conducting a survey of its ownto determine VRHs eligibility to become a Critical Access Hospital. CMS surveyors arrived, unannounced, a day before the JCAHO team, and departed four days latercompleting yet another highly intensive inspection of the hospitals care and processes. VRH passed with flying colorsrendering them the first hospital in New Hampshire to undergo

full-blown, simultaneous surveys by both organizations, and to achieve success. The CMS survey emphasized VRHs policies and procedures, environment of care, nursing documentation, patient safety and quality improvement activities. Regulatory in nature, the survey determined that Valley Regional successfully complies with the Medicare Conditions of Participation to become a Critical Access Hospital. We are going to recommend that Valley Regional be awarded the Critical Access Hospital certification, says Elaine Simonds, RN, coordinator of the CMS team. Following review by the CMS home office, certification will likely be retroactive to October 1, 2004. The seven CMS surveyors on site this week have not only conducted a thorough evaluation of our environment and practices, says Bowen, but theyve also been a wonderful educational resource for our team. They spent lots of time fielding questions from staff and I think it truly benefited both sides. A Critical Access Hospital is a designation made possible by the Medicare Rural Hospital Flexibility Program created by the federal government in the Balanced Budget Act of 1997. It provides the opportunity for small, rural hospitals to increase revenues through cost-based reimbursement from Medicare, and to have greater flexibility in their delivery of services. More importantly, it provides improved access to care for the un- and underinsured members of the community. Periodic needs assessments will drive new programs and services for this population; all Critical Access Hospitals are required to complete an annual evaluation of hospital services and the CAH program itself to ensure the spirit of the program is fulfilled. The CAH designation is expected to yield approximately $2M in revenue for Valley Regional, which will be escrowed for much-needed major capital and facility improvements. This is a tremendous achievement, says Bowen. It has been through the diligent work of many people throughout the organizationphysicians, managers and staffand their unflagging dedication to our patients, that made this such a positive experience. Founded in 1951, the Joint Commission on Accreditation of Healthcare Organizations seeks to continuously improve the safety and quality of care provided to the public through the provision of health care accreditation and related services that support performance improvement in health care organizations. The Joint Commission evaluates and accredits nearly 16,000 health care organizations and programs in the United States, including 8,000 hospitals and home care organizations, and more than 8,000 other health care organizations that provide long term care, assisted living, behavioral health care, laboratory and ambulatory care services. The Joint Commission also accredits health plans, integrated delivery networks, and other managed

care entities. An independent, not-for-profit organization, the Joint Commission is the nations oldest and largest standards-setting and accrediting body in health care. The Centers for Medicare & Medicaid Services (CMS) administers the Medicare program, and works in partnership with the States to administer Medicaid, the State Childrens Health Insurance Program (SCHIP), and health insurance portability standards. CMS is responsible for the administrative simplification standards from the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and quality standards in health care facilities through its survey and certification activity.