Testing New Approaches

Why Rural-specific Demonstration Projects Are Needed

The healthcare delivery system is undergoing dramatic change, with an emphasis on finding new approaches and organizational frameworks to:

  • improve health outcomes,
  • control costs, and
  • improve population health

Financial incentives are changing from a focus on volume-based services to value-based services. There is a concurrent need to better measure and account for quality of care in all settings and improve transitions of care as patients move from one care setting to another.

Advances in technology and new approaches to organizing care delivery are occurring quickly, with examples like the patient-centered medical home, accountable care organizations, and patient-safety organizations.

Most early adopters of new care models have been large, urban-based integrated delivery systems. Less is known about how these changes and environmental factors will affect rural healthcare delivery systems. Because rural healthcare providers are often paid outside of the traditional prospective payment systems and fee schedules, there is less known about how new and emerging models might function in rural communities. As a result, policy makers and rural providers need to better understand the implications of new and emerging models for low-volume rural settings.

The Centers for Medicare and Medicaid Services (CMS) Innovation Center was established through the Affordable Care Act. It tests new payment and service delivery models that may cost less while providing the same quality of care. A June 2012 policy brief from the National Advisory Committee on Rural Health and Human Services, Rural Implications of the Center for Medicare and Medicaid Innovation, discusses the potential for CMS demonstrations to address rural needs and offers recommendations specific to rural demonstrations.

The Rural Health System Analysis and Technical Assistance (RHSATA) program, with support from a Federal Office of Rural Health Policy (FORHP) cooperative agreement, examines the rural implications of demonstration projects and other changes to healthcare organization, finance, and delivery. RHSATA’s Rural Health Value website provides analyses of innovations undertaken in a rural setting, as well as resources for organizations interested in undertaking similar programs.

Current and Recent Rural Demonstrations

Two new rural healthcare delivery models tested by the Center for Medicare and Medicaid Services (CMS) and supported by the Federal Office of Rural Health Policy (FORHP):

  • Frontier Extended Stay Clinics (demonstration complete)
    An enhanced clinic model in frontier areas to address the needs of seriously ill or injured patients who cannot be transferred to a hospital, or who need monitoring and observation for a limited period of time.
  • Frontier Community Health Integration Program (ongoing)
    Developing and testing new models for the delivery of healthcare services in frontier areas through improving access to, and better integration of, the delivery of healthcare to Medicare beneficiaries.

Additional rural-relevant demonstrations being tested by CMS:

  • Rural Community Hospital Demonstration (ongoing)
    Cost-based reimbursement for small rural hospitals too large to be Critical Access Hospitals. Examines the community benefits and financial impact for participating hospitals.
  • Health Care Innovation Awards  (ongoing)
    Tests a wide range of innovative projects to deliver better health, improved care, and lower costs via Medicare, Medicaid and the Children’s Health Insurance Program (CHIP), particularly for beneficiaries with the highest healthcare needs. Includes projects that serve rural populations.
  • State Innovation Models (ongoing)
    Support for statewide healthcare system transformation.  Aims to create multi-payer models that raise community health status and reduce long term health risks for beneficiaries. Statewide approaches include rural areas, although few include a particular rural focus.