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.
Current and Recent Rural Demonstrations
Rural healthcare delivery models tested by the Centers for Medicare & Medicaid Services (CMS) and supported by the Federal Office of Rural Health Policy (FORHP):
Community Health Integration Project (FCHIP) – ongoing
Developing and testing 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.
Additional rural-specific demonstrations being tested by CMS:
Pennsylvania Rural Health Model
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.
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. The Report to Congress: Rural Community Hospital Demonstration, issued in October 2018, summarizes findings from the first twelve years of the demonstration.
Rural-relevant demonstrations involving accountable care organizations (ACOs):
ACO Investment Model (AIM)
AIM funding is for accountable care organizations (ACOs) participating or seeking to participate in the Medicare Shared Savings Program. Tests 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.
ACO Track 1+ Model – ongoing
Qualified as an Advanced Alternative Payment Model (APM), seeks to encourage more small practices and hospitals to transition to performance-based risk. Incorporates elements of Track 1 and Track 3 of the Medicare Shared Savings Program, and tests a payment design with more limited downside risk than currently present in Track 2 or Track 3.
Next Generation ACO Model
An initiative for ACOs experienced in coordinating care for populations of patients. Allows higher levels of financial risk and reward than available under the Medicare Shared Savings Program.
Additional rural-relevant demonstrations being tested by CMS:
Comprehensive Primary Care
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
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.
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.
P3C – proposed
“Programs of All-Inclusive Care for the Elderly – Person Centered Community Care”
Adapts the PACE model of care for disabled individuals age 21 and older who are dually eligible for Medicare and Medicaid. The P3C model would allow greater provider choice and regulatory flexibility compared to the traditional PACE program, focusing on community integration to meet the needs of a younger, mobility-impaired population.
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.
Practice Initiative (TCPI) – ongoing
Supports clinician practices in sharing, adapting, and further developing comprehensive quality improvement strategies. The Practice Transformation Networks (PTNs) provide technical assistance and peer-level support. They are required to recruit clinicians serving rural and medically underserved communities and small rural practices. The Support and Alignment Networks will involve national and regional professional associations and public-private partnerships currently working in practice transformation efforts. They will especially support the recruitment of clinician practices serving small, rural, and medically underserved communities. The Federal Office of Rural Health Policy hosted an April 21, 2016 webinar on the TCPI model with representatives from the Centers for Medicare & Medicaid Services and two of the PTNs. The webinar recording and presentation slides are available.
The Rural Impact initiative, a public-private partnership to address rural child poverty that is testing innovative service delivery models:
Integration Models for Parents and Children to Thrive (IMPACT) Demonstration – ongoing
Support for selected rural and tribal communities to develop innovative two-generation strategies to meet the needs of low-income families using a comprehensive, whole-family approach. November 2016 report details the Implementation of the Federal Rural IMPACT Demonstration.
Completed Rural Demonstrations
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.
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:
- 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. 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