October 1, 2021

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Federal Agencies Release Second Installment of Surprise-Billing Regulations
Democratic Infighting Delays Reconciliation Process
Urge Your Members of Congress to Support the Commonsense Reporting Act
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State Spotlight: Four States Chosen for New CMS Innovation Model Aimed at Rural Healthcare
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State Spotlight: Four States Chosen for New CMS Innovation Model Aimed at Rural Healthcare

Just over one year ago, CMS announced the inception of the Community Health Access and Rural Transformation (CHART) model. This model is designed to help transform rural healthcare delivery and close some of the gaps that exist in rural healthcare. Late last month, South Dakota, Washington state, Texas and Alabama were chosen to receive up to $5 million in federal funding to test the new CHART model.

The CHART model is a seven-year cooperative agreement funding opportunity for “rural communities that face significant barriers to accessing healthcare.” The funding is intended to assist rural hospitals maintain financial stability, something that is unfortunately lacking. The model, among other things, will transition participating hospitals’ Medicare and Medicaid reimbursement methodologies to a biweekly capitated payment based on historical expenditures with adjustment factors. Medicare payments would be transitioned to this methodology beginning in January 2023 and Medicaid payments would be transitioned to an aligned methodology beginning January 2024. The capitated payments are intended to provide a “financially predictable, stable revenue with the opportunity to generate and keep savings” in addition to providing “flexibility to innovate care, focus on quality, and drive population health.”

South Dakota Medicaid, a division of the South Dakota Department of Social Services, will serve as the lead organization for the Rushmore State’s grant. South Dakota Medicaid is one of the state’s largest healthcare purchasers, providing coverage for more than 140,000 of the 884,000 residents. The state will receive approximately $5 million in federal funding to implement the CHART model. “South Dakota’s rural landscape presents unique challenges for healthcare service delivery,” said Social Services Cabinet Secretary Laurie Gill. “These funds will help address access-to-care issues in rural areas of the state and accelerate the state’s transition to more innovative payment methodologies and value-based purchasing.”

Down in Texas, the Health and Human Services Commission (HHSC) will also be receiving up to $5 million to help deliver care to underserved rural residents beginning 2023. Upon notice that the Lone Star State will be receiving the grant, HHSC announced that it will use the funds to “provide technical assistance, allow hospitals to purchase telemedicine equipment, training and software, and hire additional staff, if needed, to implement their programs.” “As we work to address health disparities throughout the state, this funding will help break down barriers to accessing care while connecting rural Texans with healthcare providers in creative ways and improving overall health outcomes within their communities,” HHSC Chief Financial Officer Trey Wood stated.

Up in Washington State, the Washington State Health Care Authority (HCA) announced that it too would be receiving the federal funds. HCA was clear in its statement that the funding will go specifically toward rural communities in in the North Central region of the state, including Chelan, Douglas, Grant and Okanogan counties. The HCA will partner with rural health systems, providers, plans and the Department of Health’s Office of Rural Health, and Accountable Communities of Health.

Finally, moving back east, the Yellowhammer State was also chosen as one of the four states to utilize this new innovation model. Like other states included in this article, Alabama is struggling to deliver quality healthcare to its rural residents; at least seven rural hospitals have closed in Alabama over the past decade, and even more are actively vulnerable to closure. Unlike the previously listed states, however, University of Alabama Birmingham (UAB) will receive the federal funds, not the state’s departments of insurance or public health. “We’ll be testing out whether an alternative payment model where there's stabilized revenues or predictable revenues will we be able to provide some sort of financial stability to these rural healthcare institutions,” said Dawson Smith, vice president of affiliate operations and network development at UAB Health System.

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