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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, and
  • improve population health

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 Innovation Center tests new payment and service delivery models that may reduce cost, while also providing care of similar or higher quality. A June 2012 policy brief from the National Advisory Committee on Rural Health and Human Services, Rural Implications of the Center for Medicare and Medicaid Innovation, discusses the potential for CMS demonstrations to address rural needs and offers recommendations specific to rural demonstrations.

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 FORHP

  • 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.
  • Rural 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. In 2019, HRSA awarded three-year grants to recipients in 21 states 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 2021, HRSA awarded 9 additional grants to recipients in 7 states.

Rural-Specific Demonstrations Being Tested by CMS

  • Community Health Access and Rural Transformation (CHART) Model
    This rural-focused initiative includes two tracks for participation. The Community Transformation Track will 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. The Accountable Care Organizations (ACO) Transformation Track will select rural-focused ACOs to receive advanced payments as part of joining the Medicare Shared Savings Program. The request for applications for this track will be released in spring 2022.
    • Community Transformation Track – ongoing
    • ACO Transformation Track – announced
  • 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.
  • Pennsylvania Rural Health Model – ongoing
    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. 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. The Pennsylvania Rural Health Model (PARHM): First Annual Report evaluates the first year of the Pennsylvania Rural Health Model (PARHM).
  • Rural Community 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):

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.
  • Comprehensive Primary Care Plus (CPC+)
    Focuses on improving the quality, accessibility, and efficiency of primary care through regionally-based multi-payer payment reforms and care delivery transformation. Provides participants with technical assistance and up-front enhanced payments as a way to promote practice building capabilities. Providers participate in one of two tracks depending on their existing care delivery activities. Both available tracks qualify as an Advanced Alternative Payment Model under the Quality Payment Program (QPP).
    • Round One – ongoing
    • Round Two – ongoing
  • Global and Professional Direct Contracting (GPDC) Model – ongoing
    A set of two voluntary payment model options that were introduced to innovate Medicare fee-for-service (FFS) approaches to produce value and high-quality care outcomes. The goal of this model is to reduce burden, support a focus on beneficiaries with complex, chronic conditions, and encourage participation from organizations that have not typically participated in Medicare FFS or CMS Innovation Center models.
  • 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.
  • Health Care Innovation Awards (HCIA)
    Tests 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. Includes projects that serve rural populations.
  • Integrated 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.
  • Medicare 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.
  • Primary Care 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.
    • Cohort One – ongoing
    • Cohort Two – announced
  • State Innovation Models (SIM)
    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.
  • Value in 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.

The Rural Impact initiative, a public-private partnership to address rural child poverty that is testing innovative service delivery models:

Completed Rural and Rural-Relevant Demonstrations

  • Transforming 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.
  • Medicare 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)
    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.
  • Frontier Extended Stay Clinics (FESC)
    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 health care 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. For more information:
  • 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. For more information: