The Centers for Medicare and Medicaid Innovation on Tuesday unveiled a new alternative payment model for rural providers.
The Community Health Access and Rural Transformation—CHART—model will give rural communities money upfront to change how they pay for and deliver care to Medicare beneficiaries. It will also provide them with operational and regulatory relief, as well as technical and educational support.
"The CHART Model represents our next opportunity to make investments that will transform the rural healthcare system," CMS Administrator Seema Verma said in a statement.
The new demonstration follows President Donald Trump's executive order last week, directing federal agencies to improve rural health and access to telehealth services.CMMI hopes it will increase rural providers' financial stability, ease providers' administrative burden, and improve beneficiaries' access to care.
Providers will have two options to participate in the model: a community transformation track and an accountable care organization track.
Under the community transformation track, up to 15 rural communities will receive as much as $2 million in initial funding from the CMS Innovation Center to reform care delivery and make capitated payments to providers. Each community could receive up to $5 million in total funding.
State Medicaid agencies, state offices of rural health, local public health departments, academic medical centers and other "lead organizations" will head each initiative. Lead organizations will need to get insurers, states, hospitals and other providers to take part "to ensure they are developing solutions that will work for the entire community," Verma said during a press call.
She added that other payers must get involved because it's hard for providers to transform how they deliver care if the changes only apply to one payment model from a single insurer.
"By requiring partnerships between health systems, state Medicaid agencies and other providers, the community transformation track will help break down the current care silos and enable coordination across the continuum to improve care," said Blair Childs, senior vice president of public affairs for group purchasing organization Premier Inc.
Participating hospitals will be able to waive cost-sharing for Medicare outpatient services, transport beneficiaries and offer gift cards or other financial rewards through chronic disease management programs.
The community transformation track offers rural providers a wide range of additional operational and regulatory flexibilities like making it easier for providers to expand telehealth services and allowing "a rural outpatient department and emergency room to be paid as if they were classified as a hospital," according to a CMS fact sheet.
CMS will choose up to 15 participants in September and announce them in early 2021. The pilot will kick off next summer.
The accountable care organization track effectively reboots the ACO investment model, which saved $382 million over three years, the agency said in a statement. It allows providers to take part in two-sided risk arrangements under the Medicare Shared Savings Program. According to the agency, participating ACOs will get a one-time upfront payment of at least $200,000 per beneficiary and monthly prospective payments for each beneficiary for up to two years.
"The ACO transformation track offers resource-deprived rural providers a helping hand to invest in the tools needed to build accountable care models, including health IT, data analytics and care managers," National Association of ACOs CEO Clif Gaus said in a statement.
CMS will allow up to 20 rural ACOs to join the track in 2022. The agency will request applications from interested organizations next spring.
Rural providers have been unusually slow to adopt value-based payment, even though they face long-term declines in fee-for-service revenue. Likewise, rural communities often have worse health outcomes than other areas. But many rural providers can't afford to invest in making the changes needed to transition to value-based payment, even if they want to do it. New payment models could help rural providers transform how they deliver care since they often have different needs than urban or suburban health systems.
The Trump administration has rolled out several executive orders and related policies in recent weeks to shore up the president's healthcare record. The announcement could help Trump drum up enthusiasm among his disproportionately older, more rural political base going into November's election.