December 2016

December 2016

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

Final Rule: Advanced Practice Registered Nurses

On December 14, 2016, the Department of Veterans Affairs (VA) published a final rule that expands the scope of practice of advanced practice registered nurses (APRN)- certified nurse practitioners, clinical nurse specialists and certified nurse-midwives- who work for the agency in order to provide veterans with greater and timely access to care. The VA anticipates that increasing the authorities of advance-practice nurses will help to reduce wait times for primary care, among other advantages. The proposed rule had a similar provision for advance-practice nurse-anesthetists, but the agency declined to include that provision in the final rule, citing comments indicating that there was already adequate field strength for this area of medicine, and thus no need for a regulatory change. The VA is accepting comments on full practice authority for Registered Nurse Anesthetists (CRNAs) on or before January 13, 2017. For more information about this final rule see

CMS Posts Final Hospital Notice for Implementation by March 8, 2017

The Centers for Medicare & Medicaid Services (CMS) posted its updated version of the Medicare Outpatient Observation Notice (MOON), a standard notice that all hospitals and critical access hospitals (CAHs) must provide, effective March 8, 2017, to all Medicare beneficiaries who receive outpatient observation services for more than 24 hours. Under the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act, hospitals must provide oral and written notice to beneficiaries within 36 hours after observation services are initiated, or sooner if the individual is transferred, discharged or admitted as an inpatient. The notice informs them that they are an outpatient receiving observation services, not an inpatient, and the associated implications for cost-sharing and eligibility for Medicare coverage of skilled nursing facility services. The CMS website includes a downloadable copy of the MOON and its accompanying instructions. CMS notes that manual instructions will be made available in the coming weeks.

Final Rule on Eligibility Notices, Fair Hearing and Appeal Processes for Medicaid and CHIP

CMS published this final rule to assist states in implementing Medicaid and the Children's Health Insurance Program (CHIP) eligibility, appeals and enrollment changes required by the Affordable Care Act. It finalizes the proposed rule published on January 22, 2013 and codifies in regulation certain statutory eligibility provisions; changes regulatory requirements to provide states more flexibility to coordinate Medicaid and CHIP eligibility notices, appeals and other administrative procedures with similar procedures used by Exchanges; modernizes and streamlines existing rules, eliminates obsolete rules and updates provisions to reflect the various Medicaid eligibility pathways; and codifies certain Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA) eligibility-related provisions, including eligibility for newborns whose mothers were eligible for and receiving Medicaid or CHIP coverage at the time of birth. 

Since issuing the proposed rule, CMS developed a toolkit to provide states with consumer-tested model notices for Medicaid and CHIP, as well as guidance on developing and structuring, effective notices in a coordinated and streamlined eligibility and enrollment system. The toolkit also includes resources on key messages based on communication requirements and eligibility scenarios, and consumer tested best practices and tips. The toolkit can be obtained at

Proposed Rule on the Use of New or Increased Pass-Through Payments in Medicaid Managed Care Delivery Systems

In the May 2016 final Medicaid Managed Care rule, CMS finalized a policy limiting “pass-through” payments, which are additional amounts added to contracted payment rates between Managed Care Organizations, Pre-paid Inpatient Health Plan (PIHPS), or Pre-paid Ambulatory Health Plan (PAHPs) and hospitals, physicians or nursing facilities that are not explicitly for a specific service or benefit provided to an enrollee. CMS contends that these pass-through payments are not consistent with their standards for actuarially sound rates because they do not tie provider payments with the provision of services. The final rule included a 10-year transition period beginning in 2017 to minimize the impact of this payment change on providers’ ability to serve beneficiaries, especially safety-net providers who rely on these supplemental payments. Since publication of the final rule, CMS has learned of increases in and the creation of new pass-through payments.

In this proposed rule, CMS clarifies that their intent was to prohibit increases or additions to pass through payments, so they propose to move the start date of the phase out to July 5, 2016. The phase out will begin with the amount of pass-through payments in effect as of that date. Rural hospitals, physicians and nursing facilities receiving pass-through payments as part of their Medicaid managed care contracts should be aware of how payments will change because of this policy. CMS accepted feedback about the proposal to move up the start date of the phase out. Comments were due to CMS by 5 p.m., December 22, 2016.

New Medicare-Medicaid Accountable Care Organization (ACO) Model

CMS recently announced the Medicare-Medicaid Accountable Care Organization (ACO) Model, a new initiative designed to improve the quality of care and lower costs for beneficiaries who are enrolled in both Medicare and Medicaid. The Medicare-Medicaid ACO Model builds on the current Medicare Shared Savings Program (MSSP) and advances efforts to partner with states in transforming the health care delivery system.

CMS is accepting letters of intent from states that wish to work with CMS to design certain state-specific elements of the model. The Medicare-Medicaid ACO Model is open to all states and the District of Columbia that have a sufficient number of Medicare-Medicaid enrollees in fee-for-service Medicare and Medicaid. CMS will enter into participation agreements with up to six states with preference given to states with low Medicare ACO saturation. Once a state is approved to participate in the model, a request for application will be released to ACOs and health care providers in that state.

This model holds promise for rural ACOs, especially with the focus on including safety net providers. Additional information can be found on the Medicare-Medicaid ACO Model web page.

This project is/was supported by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) under grant number UB1RH24206, Information Services to Rural Hospital Flexibility Program Grantees, $1,100,000 (0% financed with nongovernmental sources). This information or content and conclusions are those of the author and should not be construed as the official position or policy of, nor should any endorsements be inferred by HRSA, HHS or the U.S. Government.