CMS launches new alternative payment model for rural healthcare providers

A sunset over a barn structure
CMS launched a new payment model to make investments to help transform the rural health care system. (Getty/ehrlif)

The Trump administration has launched a new payment model to provide upfront investments to rural healthcare providers.

The Centers for Medicare and Medicaid Innovation (CMMI) will use the model to test whether seed funding, predictable capitated payments, and operational and regulatory flexibilities will enable rural health care providers to improve access to high quality care while reducing health care costs, according to a release issued Tuesday.

The Community Health Access and Rural Transformation (CHART) model builds on an executive order issued by President Donald Trump issued last week to support healthcare in rural areas. Trump directed the Department of Health and Human Services (HHS) to set up a new voluntary pilot payment model.

Through the new payment model, CMS aims to address disparities by providing a way for rural communities to transform their health care delivery systems by leveraging innovative financial arrangements as well as operational and regulatory flexibilities, the agency said in the press release.

The CHART Model also ties payments to value, increases choice and lowers costs for patients, officials said. 

RELATED: COVID-19 spikes in certain states spark concerns for vulnerable rural hospitals

"The Trump Administration has placed an unprecedented priority on improving the health of the one in five Americans who live in rural areas,” said CMS Administrator Seema Verma in a statement. “The CHART Model represents our next opportunity to make investments that will transform the rural health care system, allowing us to use every lever to support all Americans getting access to high-quality care where they live.”
 
Americans living in rural areas have worse health outcomes and higher rates of preventable diseases than the over 57 million Americans living in urban areas, according to CMS.

Impediments such as transportation challenges disproportionately impact rural Americans and their access to care. Rural providers also experience challenges. For example, many rural healthcare facilities experience health care workforce shortages, and operate on thin margins and over 126 rural hospitals have closed since 2010.

Many rural hospitals also have difficulty recruiting and retain medical professionals to rural areas.

Meanwhile, value-based payment models have accelerated nationally, though rural health care providers have been slow to adopt these models, CMS said.

RELATED: Trump signs executive order to expand telehealth, boost rural health care
 
The CHART Model will feature two options for provider participation: the community transformation track and the accountable care organization (ACO) transformation track.

As part of the community transformation track, the Trump administration is investing up to $75 million in seed money to enable up to 15 rural communities to participate.

Through regulatory flexibilities, healthcare providers will be able to expand telehealth to allow the beneficiary’s place of residence to be an originating site and waive certain Medicare hospital conditions of participation to allow a rural outpatient department and emergency room to be paid as if they were classified as a hospital, CMS said.

The model also allows participant hospitals to waive cost-sharing for certain Part B services, provide transportation support, and gift cards for chronic disease management.

In September, CMS will select up to 15 rural communities to participate in this track, with the winners being announced in early 2021 and the model starting in Summer 2021.

RELATED: 2019 broke record for most rural hospital closures: report

Providers participating in this track will enter into two-sided risk arrangements as part of the Medicare Shared Savings Program (MSSP) and may use all waivers available in the MSSP program.

CMS will release a Request for Applications in the Spring 2021 and plans to select up to 20 rural ACOs to participate starting in January 2022. 

An executive order issue by President Trump last week also expands some telehealth services beyond the COVID-19 pandemic.

As a result, CMS expanded the list of telehealth services covered by Medicare in its calendar year 2021 Physician Fee Schedule proposed rule released on August 4.

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