CMS solicits applications for Rural Community Hospital Demonstration

CMS is soliciting applications for additional hospitals to participate in the Rural Community Hospital Demonstration Program, which tests payment under a reasonable cost-based methodology for Medicare inpatient hospital services furnished by eligible rural hospitals. No more than 30 hospitals can participate in the program at the same time. Applications are due May 17, 2017, and CMS’ goal is to finalize selections by June 2017.

Section 410A of the Medicare Modernization Act (MMA) (P.L. 108-173) originally authorized the demonstration for five years, and Sections 3123 and 10313 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) extended it for another five-year period. Section 15003 of the 21st Century Cures Act (P.L. 114-255) again amended section 410A to require another five-year extension of the demonstration (see 21st Century Cures clears House, now set for Senate vote, December 1, 2016).

Eligibility

To be eligible to participate in the program, a hospital must: (1) be located in a rural area or be treated as such pursuant to Soc. Sec. Act Sec. 1886(d)(8)(E); (2) have fewer than 51 acute care inpatient beds, as reported in its most recent cost report; (3) make available 24-hour emergency care services; and (4) not be designated or eligible for designation as a critical access hospital pursuant to Soc. Sec. Act Sec. 1820.

Hospitals that were participating in the demonstration as of the last day of the initial five-year period or as of December 30, 2014 may participate in this second extension period, unless the hospital elects to discontinue participation. A newly selected hospital may be located in any state; however, priority will be given to hospitals located in one of the 20 states with the lowest population densities.

Payment

For discharges occurring in the first cost reporting period on or after the implementation of the extension, hospitals participating in the demonstration will receive payment for their reasonable costs of providing covered inpatient hospital services (except for services furnished in a psychiatric or rehabilitation unit that is a distinct part of the hospital). For discharges occurring during the second or later cost reporting period, hospitals will be paid the lesser of their reasonable costs or a target amount.

For most of the previously participating hospitals, there is a gap between the end date of the hospital’s participating in the first five-year extension and the enactment of the Cures Act on December 13, 2016 that the legislation did not address. In the fiscal year 2018 hospital inpatient prospective payment system (IPPS) Proposed rule, CMS solicited comments on proposed terms of continuation for previously participating hospitals (see IPPS spending to increase $3B, LTCH PPS to decrease $173B, April 17, 2017).

The MMA requires the demonstration to be budget neutral. The IPPS proposed rule detailed the status of the demonstration and the methodology for ensuring budget neutrality.

AHA opens the door to hospital access strategies

The integration of rural hospitals with health clinics and the use of technology to provide 24/7 care are among the strategies developed by an American Hospital Association task force to assist hospital leaders with preserving access to health services in vulnerable rural and urban communities. The strategies set out in the task force’s report are designed to assist providers amidst growing pressures on the health care sector. The report recommends reforms for health care delivery and payment designed to identify and provide the essential health care services individuals need. The report also considers policies which may serve as a barrier to implementation of the strategies.

Status quo

The country has nearly 2,000 rural community hospitals and more than 2,000 urban community hospitals. Because of their location, the hospitals are what the AHA calls “the anchor for their area’s health-related services.” The report notes, however, that the hospitals face challenges in the form of: remote location, limited workforce, constrained resources, and financial instability. The survival of the hospitals is important because the hospitals serve as a critical health care access point in vulnerable communities.

Strategies

To assist the hospitals, the task force identified: characteristics and parameters for vulnerable communities, essential health care services, and emerging strategies to ensure the hospitals are able to provide those essential services. The nine strategies include:

  • addressing the social determinants of health (housing, utility needs, food insecurity, interpersonal violence, education, employment, low income);
  • implementing global budget payments, which provide greater financial certainty for vulnerable hospitals;
  • shifting inpatient resources to resources devoted to outpatient care;
  • the use of emergency medical centers to allow existing facilities to provide emergency medical services without having to maintain inpatient beds;
  • the use of urgent care centers as a viable outpatient alternative to emergency medical centers and inpatient hospitals;
  • implementing virtual care strategies like telehealth;
  • the creation of local, integrated health care organizations (called Frontier Health Systems) for very small, isolated frontier communities;
  • integration between rural hospitals and health clinics like Federally Qualified Health Centers (FQHCs); and
  • improved coordination between Indian Health Service (IHS) facilities and other providers.

Barriers

The task force acknowledged several barriers to the implementation of its strategies, including federal statutory and regulatory barriers. Additionally, the task force noted that certain facilities may have difficulty transitioning to new payment models or novel care delivery mechanisms like telehealth. The AHA acknowledged that the ability to attract and retain health care providers will continue to be a difficulty at the community level. To be successful, the AHA report notes that communities will need to expend time, effort, and finances, while hospitals will need to improve technology infrastructures and care planning.

Highlight on Georgia: State focused on promoting access to care

Georgians have received several pieces of good health care access news lately as the state works ensure that young adults and those living in rural areas get the care they need. Despite constant financial concerns surrounding health care, the state seems to be making it a priority.

Rural Healthcare 180

Rural Healthcare 180 is an effort to promote the new donation program that gives tax credits to both individuals and corporations that make donations to rural hospitals. Kim Gilman, chief executive of Phoebe Worth Hospital and Southwest Georgia Regional Medical Center, said that the hospitals need to upgrade expensive equipment and provide raises to employees.

In total, 48 rural hospitals are eligible to receive the donations. Tax credits will be supplied for donations of up to $4 million, with caps starting at $50 million in 2017 and increasing by $10 million each year for the next two years until program expiration. The potential of additional funding will hopefully address the crisis, as many rural hospitals seem to be set for the same fate as the five that have closed in the past four years.

Mental health center expansion

A new Atlanta campus of a mental health facility will open in October, adding 32 beds for young adults aged 18 to 26. This Rollins Campus, named for a gift received from the O. Wayne Rollins Foundation, is Skyland Trail’s second Atlanta campus. The nonprofit treatment organization operates 48 beds, and 60 percent of patients treated are young adults. Older adults have found Skyland Trail to be a lifeline, including a 63-year-old physician who reported experiencing her first psychotic episode at 56 years of age. She spent five months at Skyland Trail, where she attended to more than her mental health and was able to lose weight through the organization’s nutritional program.

State could be an example for EpiPens® in schools

In the wake of the EpiPen pricing controversy and stories about children in schools denied access to their own pens, Georgia’s approach may offer solutions to ensure safety in situations where students might be unknowingly exposed to food allergens. Karen Harris, mother to three children with severe allergies, founded Food Allergy Kids of Atlanta (FAKA) in 2007 in order to unite families like her own. Her goal is to ensure that this “first-line treatment” is accessible to everyone with any type of allergies.

In 2013, Georgia Governor Nathan Deal (R) signed the Emergency Epinephrine Act, which was introduced by Senator Chuck Hufstetler (R-Rome) and backed by FAKA. The law encourages (but does not require, unlike some states’ legislation) schools to stock EpiPens for emergency use, and authorizes providers to write a prescription in the name of a school. The law also protects anyone who uses the medication in good faith through its good Samaritan provision. A second piece of state legislation allows professionals to prescribe EpiPens for many public entities, including churches, restaurants, and arenas, provided that they register with the state. According to Georgia Health News, only 12 non-school entities have registered, and the article points out that no discount programs are offered to these entities.

Although some are concerned about parents depending on school-stocked pens and failing to provide for their children’s needs, a Georgia school nurse was thankful that they were able to receive donated pens through Mylan’s school program. She noted that in rural settings, quick access to epinephrine is vital when hospitals are some distance away. She has trained 25 teachers to administer the medication in the event of anaphylaxis.