January 2017

January 2017

The Federal Office of Rural Health Policy (FORHP’s) Policy Team is ready to answer any questions you may have about these updates at RuralPolicy@hrsa.gov.

Medicare Advancing Care Coordination through Episode Payment Models (EPMs)

On December 20, 2016, the Centers for Medicare & Medicaid Services (CMS) announced its final rule expanding the Comprehensive Care for Joint Replacement (CJR) model to include hip fracture care and creating episode payment models (EPMs) for high-quality, coordinated cardiac care. The expansion of CJR will be referred to as the Surgical Hip and Femur Fracture Treatment (SHFFT) Model, and the EPMs include the Acute Myocardial Infarction (AMI) Model, Coronary Artery Bypass Graft (CABG) Model and Cardiac Rehabilitation (CR) Incentive Payment Model. The CR Incentive Payment model offers a payment incentive to encourage greater use of cardiac rehabilitation services. Under the EPMs, hospitals in 98 randomly selected metropolitan areas admitting patients for a heart attack or bypass surgery will be accountable for the cost and quality of care provided to Medicare fee-for-service (FFS) beneficiaries. This includes payment for all related services during the inpatient stay and almost all Part A and Part B services provided in the 90 days after discharge. Of note for rural providers:

  • Many rural hospitals (i.e., critical access hospitals (CAHs)) are excluded from the models as the admitting inpatient hospital, though Medicare-dependent hospitals (MDHs), rural referral centers (RRCs), sole community hospitals (SCHs) and certain low-volume hospitals will participate with limited protections against financial losses
  • CAHs as well as physicians, non-physician practitioners, skilled nursing facilities (SNFs) and accountable care organizations (ACOs) (regardless of geographic location) may act as EPM collaborators in providing post-discharge care
  • CMS clarifies that all collaborators will be paid under their usual Medicare FFS payment systems throughout the model. For CAHs, this means the usual cost-based reimbursement scheme
  • As in the CJR model, CMS will waive the requirement for a three-day inpatient hospital stay prior to admission for a covered SNF stay in the AMI Model, but only if beneficiaries are admitted to SNFs rated at least three stars on the Nursing Home Compare Five-Star Quality Rating System (QRS). Swing beds at either CAHs or rural PPS hospitals will not be eligible for the waiver of the SNF three-day rule as these providers do not receive QRS star ratings

As finalized, CMS is delaying downside risk until January 2019 (i.e., inpatient stays beginning October 2018), though participating EPM hospitals may opt in to repay the difference between episode costs higher than the target price beginning January 1, 2018. The EPMs are set to begin July 1, 2017, without downside risk, and will continue through December 31, 2021. For more information, see the CMS fact sheet.

New Medicare Quality Report from ASPE

On December 21, 2016, as mandated by the IMPACT Act, the US Department of Health and Human Services (HHS) Office of the Assistant Secretary for Planning and Evaluation (ASPE) issued the first of two reports to Congress that analyze the effect of social risk factors on Medicare quality measures and quality-based payment programs. In this first report, ASPE considered how the performance of hospitals, health plans, physicians, dialysis facilities, skilled nursing facilities and home health agencies were affected by the following six social risk factors: (1) dual enrollment in Medicare and Medicaid, (2) residence in a low-income area, (3) Black race, (4) Hispanic ethnicity, (5) residence in a rural area and (6) disability status. Of the risk factors considered, ASPE found that dual enrollment was the most powerful predictor of poor performance. While beneficiaries’ rural residence was not a significant predictor, rural beneficiaries are more likely to be dually enrolled than their urban counterparts. In its results, ASPE finds that beneficiaries with social risk factors had poorer outcomes on many processes, clinical outcome and patient experience measures, and in every care setting examined, providers that cared for higher proportions of beneficiaries with social risk factors tended to perform worse than their peers, even after adjusting for beneficiary characteristics, leading to financial penalties across all five Medicare quality-based payment programs.

Rural Economic Development Loan and Grant Programs

On November 21, 2016, the US Department of Agriculture (USDA) Rural Business-Cooperative Service solicited applications for the Rural Economic Development Loan and Grant Programs (REDLG) for fiscal year (FY) 2017. Loans and grants, of a maximum of $1 million and $300 thousand, respectively, are made to projects that promote rural economic development and job creation. Eligible project activities that may be of particular interest to rural hospitals and health systems include advanced telecommunications services and computer networks for medical, educational and job training services, and community facilities projects for economic development. Loans and grants may be made to any entity that is identified by USDA Rural Development as an eligible borrower under the Rural Electrification Act of 1936. Deadlines for completed applications to be received in the USDA Rural Development State Offices no later than 4:30 p.m. (local time) are March 31, 2017, (for the third quarter) and June 30, 2017, (for the fourth quarter). 

Rural Transportation Systems Development

On November 18, 2016, the USDA Rural Business-Cooperative Service solicited applications for grants to provide technical assistance for rural transportation systems under the Rural Business Development Grant (RBDG) program. Grants will be made to qualified non-profit organizations for the provision of technical assistance and training to rural communities for the purpose of improving passenger transportation services or facilities. While the purpose of the program is to improve the economic conditions of rural areas, studies have shown that a lack of reliable public transportation options in rural areas adversely impacts rural residents’ abilities to get to the grocery store and pharmacy, take advantage of social interactions that support good mental health and access health care services. Completed applications must be received in the USDA Rural Development State Office no later than 4:30 p.m. (local time) on March 31, 2017, to be eligible for fiscal year (FY) 2017 funding.