Testing New Approaches
Why Rural-Specific Demonstration Projects Are Needed
The healthcare delivery system is undergoing dramatic change, with an emphasis on finding new approaches and organizational frameworks to:
- improve health outcomes,
- control costs,
- improve population health, and
- advance health equity
Financial incentives are changing from a focus on volume-based services to value-based services. There is a concurrent need to better measure and account for quality of care in all settings and improve transitions of care as patients move from one care setting to another.
Advances in technology and new approaches to organizing care delivery are occurring quickly, with examples like the patient-centered medical home, accountable care organizations, and patient-safety organizations.
Most early adopters of new care models have been large, urban-based integrated delivery systems. Less is known about how these changes and environmental factors will affect rural healthcare delivery systems. Because rural healthcare providers are often paid outside of the traditional prospective payment systems and fee schedules, there is less known about how new and emerging models might function in rural communities. As a result, policy makers and rural providers need to better understand the implications of new and emerging models for low-volume rural settings.
The Centers for Medicare & Medicaid Services (CMS) Innovation Center was established through the Affordable Care Act. The CMS Innovation Center tests new payment and service delivery models that may reduce cost, while also providing care of similar or higher quality. The 2021 CMS Innovation Center Strategy Refresh discusses the continued potential for CMS demonstrations to address the needs of rural providers and expand the reach of demonstration programs to Medicare and Medicaid beneficiaries in rural and underserved areas. CMS Innovation Center: 2022 Report to Congress presents summaries and updates to payment and service delivery models and initiatives tested or announced between October 2020 and September 2022.
The Rural Health Value program, with support from a Federal Office of Rural Health Policy (FORHP) cooperative agreement, examines the rural implications of demonstration projects and other changes to healthcare organization, finance, and delivery. The Rural Health Value website provides analyses of innovations undertaken in a rural setting, as well as resources for organizations interested in undertaking similar programs.
Rural-Specific Initiatives Being Tested by HRSA
Rural Maternity and
Obstetrics Management Strategies (RMOMS) Program – ongoing
Focuses on improving maternal healthcare in rural communities. Funded by the Health Resources and Services Administration's (HRSA) Federal Office of Rural Health Policy (FORHP) and Maternal and Child Health Bureau (MCHB), this four-year program allows awardees to test models of maternal healthcare to address unmet needs for populations that may experience poor health outcomes, health disparities, and other inequities. The first cohort (2019-2023) includes rural networks in Missouri, New Mexico, and Texas. Evaluation of the Rural Maternity and Obstetrics Management Strategies Program: First Annual Report provides an overview of the first cohort’s 2019-2020 planning year, their planned approaches to the program, and early lessons learned. The second cohort (2021-2025) includes rural networks in Minnesota, Missouri, and West Virginia.
Residency Planning and Development Program Awards – ongoing
An initiative from the Health Resources and Services Administration (HRSA) to expand the physician workforce in rural communities. Since 2019, HRSA has awarded three-year grants to develop rural residency programs in family medicine, internal medicine, and psychiatry. Grant recipients include rural hospitals, community health centers, Indian Health Service-operated health centers, Indian tribes and tribal organizations, and schools of medicine. In fiscal year 2022, HRSA awarded 13 additional grants to recipients in 10 states.
Rural-Specific Demonstrations Being Tested by CMS
Community Health Access and Rural
Transformation (CHART) Model – ongoing
A rural-focused initiative intended to address rural health disparities through healthcare delivery transformation and regulatory flexibilities. This model originally included two tracks for participation. In February 2022, however, CMS announced it removed the previously-publicized Accountable Care Organizations (ACO) Transformation Track from the CHART Model and would instead examine lessons learned from the previously completed CMS Innovation Center’s ACO Investment Model (AIM) to inform future ACO policies. The remaining track, the Community Transformation Track, is designed to fund rural communities to develop and implement a healthcare delivery redesign strategy. In September 2021, CMS announced cooperative agreements with the University of Alabama at Birmingham, State of South Dakota Department of Social Services, Texas Health and Human Services Commission, and Washington State Healthcare Authority to serve as lead organizations in their respective states under the Community Transformation Track. Late in 2022, the CMS Innovation Center reported that “there is insufficient participation from rural health hospitals to proceed with the first Implementation Year of the CHART Model in January 2023.” CMS is examining next steps and additional ways to expand access to care in rural areas.
Frontier Community Health
Integration Project (FCHIP) – extension period announced
Developed and tested new models for the delivery of healthcare services in frontier areas through improving access to, and better integration of, the delivery of healthcare to Medicare beneficiaries. The Consolidated Appropriations Act, 2021, authorized a five-year extension period for participating Critical Access Hospitals beginning on July 1, 2021.
Designed to improve the financial viability of rural Pennsylvania hospitals and reduce the growth of hospital expenditures across payers, including Medicare. Participating rural hospitals will be paid monthly based on fixed all-payer global budgets and redesign their healthcare delivery system to improve quality and access in rural Pennsylvania communities. Jointly administered by CMS and the Pennsylvania Department of Health, the model is open to Critical Access Hospitals and acute care hospitals in rural Pennsylvania. The Pennsylvania Rural Health Model (PARHM): Second Annual Evaluation Report evaluates the second performance year of the model.
A similar model, the Maryland Total Cost of Care (TCOC) Model, is underway for the entire state of Maryland, including rural areas, and sets a per capita limit on Medicare total cost of care in Maryland. Evaluation of the Maryland Total Cost of Care Model: Implementation Report describes the first two years of the model's implementation.
Hospital Demonstration – ongoing
Implements cost-based reimbursement in participating small rural hospitals that are not eligible for Critical Access Hospital designation. Designed to assess the impact of cost-based reimbursement on the financial viability of small rural hospitals, and test for benefits to the community. Evaluation of the Rural Community Hospital Demonstration: Report Covering 2005-2017 (Interim Report 1), issued in September 2021, discusses the first twelve years of the demonstration and the impact of the program on hospital finances.
Rural-Relevant Demonstrations Involving Accountable Care Organizations (ACOs)
All-Payer ACO Model – ongoing
Offers ACOs in Vermont the opportunity to participate in an initiative involving the most significant payers in the state - Medicare, Medicaid, and commercial health care payers. CMS made start-up funding available to help Vermont providers with care coordination and collaboration with community-based providers. The December 2022 report Evaluation of the Vermont All-Payer Accountable Care Organization Model: Second Evaluation Report summarizes findings from the first three performance years of the model.
Note: The Medicare Shared Savings Plan now offers a BASIC and an ENHANCED track, with a July 1, 2019 start date. See the application timeline and the CMS fact sheet, Final Rule Creates Pathways to Success for the Medicare Shared Savings Program, for additional information. It will take time to see the extent to which rural providers participate in these new ACO tracks.
Additional Rural-Relevant Demonstrations Being Tested by CMS
Bundled Payments for Care
Improvement Advanced (BPCI Advanced) Model – ongoing
Participating providers receive a single bundled payment for a clinical episode of care, based on the expected costs of all items and services provided during the episode. Aims to reduce Medicare expenditures while maintaining or improving quality of care. Participants in this model include rural hospitals.
Accountable Care Organization
Realizing Equity, Access, and Community Health (ACO REACH) Model – announced
A redesign of the Global and Professional Direct Contracting (GPDC) Model intended to encourage healthcare coordination to improve care for people with Medicare, especially those from underserved communities. CMS will use the ACO REACH model to test an ACO model that can inform the Medicare Shared Savings Program and future models. Changes to the GPDC Model incorporated into the ACO REACH Model include advancing health equity; promoting leadership and governance; and increasing participant vetting, monitoring, and transparency.
Emergency Triage, Treat, and Transport
(ET3) Model – ongoing
Permits ambulance care teams to use alternate models of emergency health care, such as telehealth treatment and transport to alternative destinations, to improve quality and lower costs of care. Rural Medicare-enrolled suppliers or hospital-based ambulance providers without current medical dispatch and/or telehealth are eligible to participate.
Care for Kids (InCK) Model – participants announced
A child-centered local service delivery and state payment model aimed at reducing expenditures and improving the quality of care for children covered by Medicaid and the Children’s Health Insurance Program (CHIP) through prevention, early identification, and treatment of priority health concerns. The goals of the InCK Model are to improve child health, reduce avoidable inpatient stays and out-of-home placements, and create sustainable alternative payment models (APMs). Participants include providers serving rural populations in Illinois, Ohio, and Oregon. Integrated Care for Kids (InCK) Model Evaluation: Report 1 profiles each InCK award recipient and presents findings from the 2020-2021 pre-implementation period.
Diabetes Prevention Program (MDPP) Expanded Model – ongoing
A structured behavior change intervention that aims to prevent the onset of type 2 diabetes among Medicare beneficiaries with an indication of prediabetes.
First Model Options – ongoing
A set of five voluntary payment model options with the aim of rewarding value and quality through innovative payment structures while emphasizing the doctor-patient relationship supporting advanced primary care. Offered in 26 regions. The Primary Care First Model’s Seriously Ill Population component did not begin on the anticipated April 2021 start date and is currently under review. Evaluation of the Primary Care First Model: First Annual Report, published in December 2022, reports on the first performance year of the Cohort 1 practices.
- Cohort One – ongoing
- Cohort Two – ongoing
State Innovation Models
Support for statewide healthcare system transformation. Aims to create multi-payer models that raise community health status and reduce long term health risks for beneficiaries. Statewide approaches include rural areas, although few include a particular rural focus.
Opioid Use Disorder Treatment Demonstration – ongoing
Creates two new payments for opioid use disorder (OUD) treatment services, a per beneficiary per month care management fee and a performance-based incentive, with the goal of increasing access to OUD treatment, improving health outcomes, and to the extent possible, reducing costs.
Completed Rural and Rural-Relevant Demonstrations
Primary Care Plus (CPC+)
Focused on improving the quality, accessibility, and efficiency of primary care through regionally-based multi-payer payment reforms and care delivery transformation. Provided participants with technical assistance and up-front enhanced payments as a way to promote practice building capabilities. Providers participated in one of two tracks depending on their existing care delivery activities. Both tracks qualified as Advanced Alternative Payment Models under the Quality Payment Program (QPP). Performance periods concluded December 31, 2021. The Independent Evaluation of Comprehensive Primary Care Plus (CPC+): Fourth Annual Report discusses the first four program years of the model, including practice changes and outcomes for Medicare fee-for-service beneficiaries.
Next Generation ACO
An initiative for ACOs experienced in coordinating care for populations of patients. Allowed higher levels of financial risk and reward than available under the Medicare Shared Savings Program. The Fifth Evaluation Report: Next Generation Accountable Care Organization Model Evaluation discusses changes to the model in response to the COVID-19 pandemic and presents findings on the model's impact through 2020. Ended December 31, 2021.
Clinical Practice Initiative (TCPI)
Supported clinician practices in sharing, adapting, and further developing comprehensive quality improvement strategies. The Practice Transformation Networks (PTNs) provided technical assistance and peer-level support and were required to recruit clinicians serving rural and medically underserved communities and small rural practices. The Support and Alignment Networks involved national and regional professional associations and public-private partnerships and supported the recruitment of clinician practices serving small, rural, and medically underserved communities. The initiative concluded September 28, 2019. Clinical practice transformation tools and resources developed through the initiative continue to be available.
ACO Track 1+ Model
Qualified as an Advanced Alternative Payment Model (APM), sought to encourage more small practices and hospitals to transition to performance-based risk. Incorporated elements of Track 1 and Track 3 of the Medicare Shared Savings Program, and tested a payment design with more limited downside risk than in Track 2 or Track 3. Ended December 31, 2018; participants could elect to extend through June 30, 2019.
ACO Investment Model
AIM funding was for accountable care organizations (ACOs) participating or seeking to participate in the Medicare Shared Savings Program. Tested the use of pre-paid shared savings to encourage new ACOs to form in rural and underserved areas and to encourage current Medicare Shared Savings Program ACOs to transition to arrangements with greater financial risk. Ended December 31, 2018. Lessons learned about advanced payments from AIM informed the incorporation of advanced payments into the Shared Savings Program for Calendar Year 2023.
- Evaluation of the Accountable Care Organization Investment Model: Final Report, Abt Associates, September 2020
Health Care Innovation Awards (HCIA)
Tested a wide range of innovative projects to deliver better health, improved care, and lower costs via Medicare, Medicaid, and the Children's Health Insurance Program (CHIP), particularly for beneficiaries with the highest healthcare needs. Included projects that serve rural populations. Ended September 1, 2017.
Frontier Extended Stay Clinics
An enhanced clinic model in frontier areas to address the needs of seriously ill or injured patients who cannot be transferred to a hospital, or who need monitoring and observation for a limited period of time. Ended April 15, 2013.
Medical Assistance Facilities (MAF)
A Montana demonstration program aimed at preserving healthcare access in frontier areas by converting full-service hospitals into low-intensity, short-stay healthcare service centers. Authorized by the Montana State legislature in 1987, with a Health Care Financing Administration (HCFA, the precursor to CMS) Medicare reimbursement waiver through 1993. Along with the Rural Primary Care Hospital (RPCH) program, a precursor to the Critical Access Hospital program. For more information:
- Medical Assistance Facilities: A Demonstration Program to Provide Access to Health Care in Frontier Communities, HHS Office of the Inspector General, July 1993
Essential Access Community Hospital/Rural Primary Care Hospital (EACH/RPCH) Program
Enacted by the Omnibus Budget Reconciliation Act of 1989, this program recognized a limited-service facility, the Rural Primary Care Hospital, and linked each RPCH into a network tied to a larger supporting Essential Access Community Hospital. Along with the Medical Assistance Facilities (MAF) program, a precursor to the Critical Access Hospital program. For more information:
- Developing Rural Health Networks Under the EACH/RPCH Program: Interim Report of the Evaluation of the Essential Access Community Hospital/Rural Primary Care Hospital Program, Mathematica Policy Research, September 1993
- Lessons from the Essential Access Community Hospital Program for Rural Health Network Development, Journal of Rural Health, 11(1), 32-9. Article Abstract