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Tennessee Office of Rural Health

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Program Area: Support for Quality Improvement

The Tennessee Flex Program partnered with the Tennessee Patient Safety Organization (PSO) that allows critical access hospitals (CAHs) to take advantage of the new federal protection to share and learn from the analysis of events to enhance safer care, mitigate patient harm and increase care efficiency. This program was offered to assist CAHs with providing the safest and highest quality of care to their patients by sharing, analyzing, and learning from patient safety events in a protected environment.

The PSO has the capacity to identify areas for improvement and promote best practices designed to reduce or eliminate patient harm on a wide-scale basis throughout the state. The PSO program provides a voluntary web-based patient safety reporting system, real-time reports, root cause analysis evaluation, critiques, feedback, and advisories related to trends, all under the protection of federal law.

The Tennessee Flex Program is working to arrange, facilitate and provide expert content for three onsite CAH Medicare Beneficiary Quality Improvement Project (MBQIP) meetings each year. The Tennessee Flex Program will work to create valid, reliable benchmark reports based on the most recent Telligen reports and CAHs will be asked to bring with them their most recent internal data for core measures and Hospital Consumer Assessment of Health Providers and Systems (HCAHPS) data for review by the group at each meeting. A centralized Report Distributor has also been created to allow CAHs to review and create customized MBQIP reports. Additional ongoing quality improvement training will also be provided at the individual CAH level.

Program Area: Support for Financial and Operational Improvement

The Tennessee Flex Program assessed the previous supplemental payment pool methodology authorized for CAH by the Tennessee Medicaid 1115 waiver. The pool provides supplemental reimbursement from TennCare for services provided by CAHs to the disproportionate number of low-income/special needs rural population. The purpose of this project is to review and evaluate the present payment methodology and identify opportunities for improving the reimbursement system. Targeted goals and deliverables include: enhancing efficiency, ensuring accurate projected and final on-time distribution of funds, and to explore the potential for inclusion of a value-based payment concept in support of maintaining a sustainable reimbursement system.

This project is proposed as an extension of the Flex Program financial and operational program activities and has been identified as a recommended financial improvement intervention to enhance CAH financial performance outcomes. Financial consultants are in the process of completing the first phase of activities in play for the Financial Improvement Network, which includes conducting Financial and Operational Assessments (FOAs) that encompass a set of analytics and advisory services designed to assist hospitals to achieve breakthrough financial performance. The consulting work culminates in a comprehensive report that delivers a complete set of findings and recommendations for all aspects of hospital performance, including strategies to build physician alignment, recommendations to develop population health strategies, as well as financial improvement opportunities. The report also serves as a blueprint for strategic and operational strategies. The introduction of the settlement pool initially helped enhance Medicaid/TennCare payments, which previously had been extremely low.

Program Area: Support for Population Health Management and Emergency Medical Services Integration 

Population Health Assessment Chart Books were developed for each CAH and include a national and state benchmark of populations defined by hospital service area. Assessments also include mapping with "hot spotting" and charting to show respective positions of populations served locally and at the national and state level. Assessment results and data analyses are provided via webinars and conference calls.

Please provide information about Collaboration/Shared Services 

Supplemental Funding to the Flex Grant Program provides additional funding to states to support in-depth technical assistance to CAHs. The supplemental funding was awarded to Tennessee to provide support in rural communities with high rates of poverty, unemployment, and substance abuse. Supplemental funds will be used to make measurable improvement(s) in the CAH based on identified need in the areas of finance, quality, and substance use. This supplemental funding provides an opportunity for more in-depth TA within the context of the Flex Program, given greater need than states have Flex grant dollars to support.

The overall goal of the Flex Program is to maintain or improve access to high-quality health care in rural communities by providing funding to state-designated organizations and increase the capacity of CAHs. Flex funds are being used to support improvements in the quality of health care provided in communities served by CAHs, support efforts to improve the financial and operational performance of the CAHs and support communities in developing collaborative regional and local health care delivery systems. Identification of areas for improvement with defined targets and measurable outcomes is an ongoing process within the Flex program.

Please provide information about any efforts to assist CAHs/communities and partner organizations in the transition to value-based care.

INDEX, previously known as the Hospital Strength Index provides a comprehensive program for comparing all U.S. general acute care hospitals across a continuum of financial, value-based, and market-driven performance indicators based on publicly available data. The Index aggregates data for over 50 individual metrics into eight manageable categories to derive a single Strength Index rating. Benchmarks are based on publicly available data sources, including Medicare cost reports, Medicare claims data, and Hospital Compare quality reporting. The initiative ranks hospitals against national peer groups using a 0-100 point scale for each performance area.

It is the first rating system to incorporate market position, competitive intensity, and accountable care demand, modeled on research-based financial ratios that are most determinant of long-term financial sustainability and the first national rating system built to include the 1,300+ CAHs. Hospital executives can access new benchmarking and peer-to-peer comparative analytics, new interactive geographic information system (GIS) mapping platforms for market visualization and new marketing and branding solutions.

Please provide information about network activities in your state to support Flex Program activities.

The Tennessee Hospital Association (THA) has implemented the CAH Financial Improvement Network program. As with the existing CAH Quality Improvement Network, this Flex-grant funded opportunity is the result of collaboration between THA and the Tennessee Department of Health’s Office of Rural Health. The purpose of the Financial Network is to identify areas for improvement, maintain a database of rural-relevant benchmarks, implement performance improvement activities, and provide educational sessions related to rural hospital trends.  Stroudwater Associates has been engaged to manage and facilitate network activities. The Financial Network has face-to-face sessions as a group to review data, design performance improvement activities, and participate in interactive educational sessions facilitated by Stroudwater.

Ongoing support will include:

  • arrange, facilitate and provide expert content for future webinars;
  • create valid, reliable benchmark reports based on monthly CAH monthly financial statements;
  • development of Learning and Action Taskforces as requested;
  • ongoing support provided through the formation of Task Forces that will create and implement subject-specific action plans; 
  • and provide training assistance to individual hospitals by means of e-mail or conference call as needed regarding new data and activities.

The Tennessee Flex Program is also conducting FOAs for CAHs most critically in need that encompasses a set of analytics and advisory services designed to assist hospitals to achieve breakthrough financial performance. The Tennessee Flex Program will develop a comprehensive report that delivers a complete set of findings and recommendations for all aspects of hospital performance, including strategies to build physician alignment and develop population health strategies, which serve as a blueprint for strategic and operational strategies. The report will include, but is not limited to the following analyses, plans, and identified opportunities:

  • onsite interviews with key informants;
  • hospital Analysis;
  • financial and operational analysis of key departments with a focus on improving efficiency
  • analysis of core business functions;
  • quantification of financial improvement opportunities related to specific recommendations;
  • inpatient service utilization and resource use;
  • outpatient service utilization and resource use;
  • ancillary service utilization and resource use;
  • department staffing plan relative to benchmark standards;
  • quality of care and patient satisfaction relative to benchmark standards;
  • Medicare Cost Report review to ensure optimal reimbursement;
  • finance functions review including third-party contract strategies, availability of decision support information, etc.;
  • and business office functionality review including billing and revenue cycle.                        

Please provide information about cross-state collaborations you may be working on related to the Flex Program.

Tennessee has been selected to participate in an important project in support of the Flex Program. To advance the development of rural relevant measures, to set the stage for future MBQIP data reporting and to foster a new set of CAH research, the Federal Office of Rural Health Policy (FORHP) and the Flex Monitoring Team (FMT) have commissioned a national pilot test for swing bed outcome measures. The Tennessee Flex Program has been invited to be one of the states to implement the data collection and reporting model for these new CAH swing bed measures. THA and the Tennessee State Office of Rural Health, in partnership with Stroudwater, asked the CAHs to consider participating in this project as it will augment the existing QI program, provide new data to support performance improvement at the facilities, and elevate the program from a national perspective. Additional background on the project:

The Tennessee Flex Program has hoped to have no less than 50% (8) of the CAHs volunteer for this project and currently have 56% (9) participating CAHs. Given that swing beds are an essential service in rural communities, the Tennessee Flex Program see this as a valuable opportunity and means to expand and strength the ongoing quality networking activities among the state’s CAHs.

Please describe how your state Flex Program has enhanced its use of data in the past year.

THA administers the DUI Interlock Assistance Fund and from it makes grants to CAHs for purchasing medical equipment, enhancing high technology efforts and expanding health care services in underserved areas. 

TennCare has launched two primary care transformation initiatives that rely on real-time hospital Admission, Discharge and Transfer (ADT) messages to inform providers of TennCare member’s interactions with hospitals. Receiving this notification allows providers to better coordinate the care provided to TennCare members.

This grant funding is being utilized to support CAHs in establishing connectivity and flowing ADT messages in real time into THA’s ADT data service called ConnecTN. These messages will then be routed to TennCare and other providers, which will enhance the care coordination provided to each hospitals’ patients.

Establishing the connectivity with ConnecTN requires hospital staff to establish a secure VPN connection with ConnecTN, and to establish a new HL7 ADT interface between the hospitals EHR and ConnecTN. Both of these efforts require hospital IT staff time, and often a direct cost incurred by the EHR vendor used by that hospital. The grant funding would offset some or all of the costs the hospital can expect to incur in establishing this connectivity. 

The grant funding will benefit the hospital, rural health system, and community by offsetting some or all of the costs that the hospital will incur in setting up the technical solution to send real-time ADT messages to ConnecTN. Enabling this connectivity will provide ConnecTN and TennCare with real-time notification that a patient at the participating hospital has been admitted, discharged, or transferred from that facility, along with their chief complaint, admitting diagnosis, and discharge diagnosis as that information is made available. This information, when made available to primary care providers, is invaluable in providing more coordinated care for the patients in these hospitals.

Do you have any hospitals interested in converting to CAH status?:


Program Statistics

Type of Organization State Government
Staffing 3.0 FTEs
Number of CAHs 16
Website URL Organization Website

Flex Program Staff

Angie Allen
State Office Director and Flex Coordinator, Tennessee
(615) 741-5226

Specialty Areas / Background

Administrative responsiblity for state and federal grant programs that enhance access to care and support the shortage designation process in underserved areas.

Flex Coordinator since 2005, State Office Director since 2013

Bill Jolley
Vice President, Tennessee Hospital Association, Tennessee
(615) 256-8240

Specialty Areas / Background

  • Rural hospital operations and reimbursement
  • Resource and partner development
  • Workforce

Vice President, Tennessee Hospital Association since 1999 

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, $1,205,000 (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.