August 13, 2020

CMS has a new plan to push rural providers to value-based payments. Here's what's inside.

Daily Briefing

    CMS on Tuesday announced a new alternative payment model (APM) that aims to improve rural health care and further the Trump administration's push to shift U.S. health care providers toward more value-based payments.

    The agency unveiled the new model in accordance with President Trump's recent executive order aimed at boosting Americans' access to quality rural health care and telehealth services.

    Inside the new payment model

    CMS' Center for Medicare & Medicaid Innovation (CMMI) will implement the new APM, called the Community Health Access and Rural Transformation (CHART) Model.

    CMS said the model aims to "empower" rural communities to create a system to deliver "high quality care" to patients by supporting providers through "new seed funding and payment structures, operational and regulatory flexibilities, and technical and learning support." According to the agency, the new model "will test whether upfront investments, predictable capitated payments, and operational and regulatory flexibilities will enable rural health care providers to improve access to high quality care while reducing health care costs."

    The voluntary CHART Model will feature two tracks for participation:

    • The Community Transformation Track; and
    • The Accountable Care Organization (ACO) Transformation Track.

    Community Transformation Track

    Under the Community Transformation Track, CMS said it will choose up to 15 so-called "Lead Organizations" to work closely with "key model participants" to create and implement Transformation Plans that will redesign their communities' health care delivery systems.

    CMS explained that a Lead Organization will serve as the single entity representing a rural community and will coordinate efforts to implement the Transformation Plans across the community. Lead Organizations will need "to ensure that access to care is maintained and that the needs of various stakeholders are understood and accounted for in the Transformation Plan," CMS said. In addition, Lead Organizations will be responsible for managing the effort's funding, recruiting hospitals to participate in the effort, coordinating with state Medicaid agencies and forging relationships with other payers, ensuring compliance with the track's requirements, and more.

    Examples of entities that can serve as Lead Organizations include—but aren't limited to—academic medical centers, independent practice associations, local public health departments, state Medicaid agencies, and state rural health offices. Examples of key model participants include participating hospitals and state Medicaid agencies, CMS said.

    The Trump administration intends to provide up to $75 million in seed money to support the 15 Lead Organizations and other participating partners in their efforts. CMS will provide the funding through a cooperative agreement of up to $5 million per Lead Organization, with $2 million in funding upfront and the rest coming as communities progress through their Transformation Plans. In addition, the agency will return any savings generated under the track to community participants via the Lead Organizations, according to CMMI Director Brad Smith.

    CMS also will provide certain financial flexibilities under a predictable capitated payment amount for participating hospitals, as well as other "operational and regulatory flexibilities." For instance, CMS said it will allow participating hospitals to waive beneficiaries' cost-sharing fees for Medicare Part B services, provide beneficiaries with transportation, and offer beneficiaries gift cards as incentives and rewards for participating in chronic disease management programs. CMS also will make it easier for participating providers to offer expanded telehealth services and will pay participating rural outpatient departments and EDs as if they were classified as hospitals.

    Further, CMS will waive certain conditions of participation for providers taking part in the effort, according to Inside Health Policy. CMS Administrator Seema Verma reportedly told Inside Health Policy, "It's possible to re-imagine a facility, so it doesn't have to provide cardiac surgery. Maybe they just want [ED] or maternity care." She added, "I think we always want to ensure that we have the appropriate quality and safety to make sure that we're maintaining a standard of care within rural communities."

    CMS said it will select rural communities eligible for the Community Transformation Track this September and announce track participants early next year. The agency plans to launch the track in the summer of 2021.

    ACO Transformation Track

    Under the ACO Transformation Track, participating ACOs will enter the Medicare Shared Savings Program (MSSP) with a two-sided risk arrangement, and they'll be eligible to use all waivers available under MSSP. According to CMS, the ACO Transformation Track will reboot the agency's previous ACO Investment Model—which had saved $382 million over three years—and help CHART ACOs to "engage in value-based payment efforts that will improve outcomes and quality of care for rural beneficiaries."

    CMS said participating ACOs will be able to receive advance shared savings payments through two components:

  • A one-time, upfront payment that equals at least $200,000 plus $36 per beneficiary if the ACO participates in MSSP's five-year agreement period; or
  • A prospective, per-beneficiary per-month payment that equals at least $8 for as many as 24 months, with payments varying based on the level of risk an ACO accepts under MSSP and the number of rural beneficiaries assigned to it (with a maximum of 10,000 beneficiaries).
  • The agency will require participating ACOs to enter into agreements both for MSSP and the CHART Model.

    CMS said it plans to select up to 20 rural ACOs to participate in the ACO Transformation Track, and the agency in the spring of 2021 will release a Request for Applicants looking to participate. CMS plans to launch the track in January 2022.

    Stakeholders praise the new model

    Verma said the new "CHART Model represents our next opportunity to make investments that will transform the rural health care system, allowing us to use every lever to support all Americans getting access to high-quality care where they live."

    Blair Childs, SVP of public affairs at the group purchasing organization Premier, in a statement said, "By requiring partnerships between health systems, state Medicaid agencies, and other providers, the Community Transformation Track will help break down the current care silos and enable coordination across the continuum to improve care."

    And Clif Gaus, CEO of the National Association of ACOs, in a statement said the ACO Transformation Track will "offe[r] resource-deprived rural providers a helping hand to invest in the tools needed to build accountable care models, including health IT, data analytics, and care managers" (CMS release, 8/11; CMS' "CHART Model" web page, accessed 8/11; CMS fact sheet, 8/11; Brady, "Transformation Hub," Modern Healthcare, 8/11; Landi, FierceHealthcare, 8/11; Cirruzzo, Inside Health Policy, 8/11 [subscription required]; Muchmore, Healthcare Dive, 8/11).

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