Seeking Models for Sustaining Access to Health Care in

Rural CommunitiesRural Hospital Conference of

the CarolinasNovember 9, 2017

Andy Fosmire, M.S., VP for Rural HealthOklahoma Hospital Association

Fosmire@okoha.com

83 Hospital Closures Since 2010

In Oklahoma:• Sayre Memorial Hospital• Memorial Hospital & Physician Group (Frederick)• Epic Medical Center (Eufaula)

• Pushmataha Hospital (Antlers) Bankruptcy Protection• Atoka County Medical Center Bankruptcy Protection

83 Hospital Closures Since 2010

In North Carolina:• Davie Medical Center-Mocksville• Blowing Rock Hospital• Vidant Pungo Hospital (Belhaven)• Yadkin Valley Community Hospital (Yadkinville)

Oklahoma’s Rural Hospital Financial Positions

• 65 “truly rural hospitals” in Oklahoma• 53 have negative operating margins • 37 have less than 14 days cash on hand• 7 struggle to make payroll and payroll

taxes

Source: Eide Bailly 2017

Rural vs Urban Oklahoma Hospitals 2015

Death by a Thousand Cuts

• Sequestration cuts – 2% for nine years• Bad debt reimbursement cuts• Documentation & coding cuts• Readmission cuts• Multiple therapy procedure cuts• ESRD reimbursement cuts• Super rural laboratory extender – expired• Outpatient hold harmless payments – expired • 508 reclassifications – expired

Rural/Urban Divide

“Rural folks tend to be poorer, sicker, and older that their

urban counterparts”Alan MorganCEO, NRHA

Data:

Hing, E, Hsiao, C. US Department of Health and Human Services. State Variability in Supply of Office-based Primary Care Providers: United States 2012. NCHS Data Brief, No. 151, May 2014.

CDC’s National Center for Health Statistics. https://www.ers.usda.gov/topics/rural-economy-population/rural-poverty-well-being/poverty-overview/

https://www.ruralhealthinfo.org/topics/aging

http://www.giaging.org/issues/rural-aging/

A. O’Connor and G. Wellenius, “Rural–Urban Disparities in the Prevalence of Diabetes and Coronary Heart Disease,” Public Health, Oct. 2012 126(10):813–20.

M. Shan, Z. Jump, E. Lancet, “Urban and Rural Disparities in Tobacco Use,” National Conference on Health Statistics, August 8, 2012, https://www.cdc.gov/nchs/ppt/nchs2012/SS-33_LANCET.pdf

C. A. Fontanella, D. L. Hiance-Steelesmith, and G. S. Phillips, “Widening Rural–Urban Disparities in Youth Suicides, United States, 1996–2010,” JAMA Pediatrics, May 2015 169(5):466–73.

https://apps.fcc.gov/edocs_public/attachmatch/DOC-331734A1.pdf

https://www.ers.usda.gov/webdocs/publications/aib795/30150_aib795_lowres_002.pdf

Source: M. Hostetter and S. Klein, In Focus: Reimagining Rural Health Care,Transforming Care: Reporting on Health System Improvement, The Commonwealth Fund, March 2017.

Searching for Solutions

Redefining Rural Health Summits:

• April 2015: Convened 12 state hospital associations to learn what steps they are taking to address rural hospitals in crisis.

• Discussed models/ideas states are investigating for sustaining future rural health services.

• Distributed a detailed summary report for states that were not in attendance.

• August 2015: Follow up meeting, 22 states, led to AHA Rural Affiliate group formation/monthly calls

• March 2016: First formal Rural Affiliate meeting

Purpose of the Summits:

Convene other state hospital associations to identify common themes and discern elements for sustaining rural health services.

Discuss models/ideas states are investigating for sustaining future rural health services.

An opportunity for state associations to gain insight from others and guide their own efforts with rural communities.

Identify forces impacting provision of rural healthcare. Develop guiding principals a common path forward.

Drivers Impacting Rural Communities:

• Money-Declining volumes, funding cuts, uncompensated care, regulations, workforce issues

• Continuity of care limited or no collaboration among rural providers “collaborative disconnect”

• Lifestyle issues: Rural hospitals act as default social services agencies, i.e. poor nutrition, poverty, and other uniquely rural factors

• Reform fatigue: Uncertain future, communities tired of continued effort to “prop up” their hospital

• Resistance to maintaining a medical presence in communities without a full service hospital

Redefining Rural HealthGuiding Principals for Transformation:

• Patient first (community and population-based health)• Enlightened governance and leadership• Access to appropriate care• Provide quality and value• Collaborate among all providers (continuum of care)• Leverage technology• Adequate payment from state and federal sources

Structure for Rural Services

• New Provider Type, OR• Amend Current Provider Type(s)?

• CAH (Critical Access Hospital)• PPS (Prospective Payment System)• RHC (Rural Health Clinic)• FQHC (Federally Qualified Health Center)• Ambulatory Surgery Centers• FESC (Federal Extended Stay Clinic)• Other?

• Combination of the two in a way that meets the “Core” needs

Amend Current Provider Type Rationale

• Limits entrants to only those currently in that particular type to move along a continuum at desired pace

• Creates flexibility based on need (documented through modified CHNA)

• Quicker legislative/regulatory path• Administration open to New Provider type

We Are All Pushing the Same Rock

Kansas Hospital Association Summary

KHA’s Rural Health Visioning Technical Assistance Group (TAG) formed in 2012 and identified five areas of work:• Establishing a case for change • Identifying and reviewing best practices and

emerging models • Finding or developing models that could be an option • Developing scenarios to assist members to structure

leadership discussions about their role and future• Providing resources for members to evaluate

collaboration and affiliation

Minnesota Hospital Association SummaryCritical Access Hospital Payment Reform Task Force –member driven endeavor• Analyzed HCRIS, operating margin profiles,

admissions trends, case mix, and swing bed ratesCAH Reform Model Concepts designed to: • Be patient-centered, value driven home and

community-based care• Recognize provider-generated savings whether

realized by Medicare or Medicaid• Generate direct/indirect savings for CMS by

improving quality and decreasing utilization• Maintain access to emergency services

Illinois Hospital Association SummaryIHA Transforming Illinois Health Care Task Force, Rural Health Subgroup – 13 CAHS and 5 rural PPS hospitals formed in 2014 and convened to:• Identify elements of new rural health care delivery

models with government and finance mechanisms; and

• Develop pathways for members to transition to new models.

Three subcommittees• Model design• Payment system• Quality improvement

Washington State Hospital Association Summary

WSHA and the Washington State Department of Health created the Washington Rural Health Access Preservation (WRHAP) to ensure continued access to essential health services in WA’s most vulnerable communities using their CMS SIM grant. WRHAP has:• Reviewed existing alternative rural healthcare models

– Frontier Extended Stay Clinic (FESC)– Federal Community Health Integration Project (F-

CHIP)– Free standing ED (Georgia)– Integrated interagency county/district/regional

system

Washington State Hospital Association Summary continued

• Identified an initial list of essential services that need to be provided locally

• Described some potential payment models– Fixed cost of the facility– Prospective per member per month for primary

care (including prevention) and possibly other services

– Extended stay payments– Bundled payments for episodes of pre and post-

acute care

Pennsylvania approach: Rural Global Budget

SOURCE: Pennsylvania Department of Health and Hospital Association of Pennsylvania30

Fixed annual revenue (global budget)

Transformation support (Rural Health Redesign Center)

The global budget is fixed annually and paid out to hospitals monthly, providing a stable stream of revenue

The objective of the global budget is to stabilize cash flow, allowing focus on investment and care quality

The global budget is calculated based on historic data adjusted for transformation-related annual service changes

Rural Health Redesign Center will provide tailored, end-to-end assistance at no cost to the hospital

The objective of the RHRC is to minimize the burden of the transformation, allowing focus on successful implementation

The RHRC will participate in all transformation phases: data collection, plan creation, implementation progress

Model is driven by a hospital-led transformation plan and enabled by a global budget (Project funded by a $25 million grant from CMMI)

Oklahoma Hospital Association SummaryCouncil on Rural Health

• Comprised of 15 rural CEOs from across the state and three ex-officio members.

• Provides a forum to address health care issues specific to rural communities across Oklahoma.

• Develop and address health policy and regulatory issues unique to rural settings.

• Advises the OHA board on ways to focus its resources to better assist rural hospitals in service to their communities.

Hey, This Direction…

Oklahoma Options:Two Sub-models

Hybrid of CAH and FQHCo Allows for acute inpatient, swing beds, outpatient

services, cadre of required FQHC services (behavioral health, oral health, sliding fee scale)

24-Hr outpatient hospitalo 24-hr emergency treatment, stabilizationo Primary Care and Outpatient serviceso Short Term Observation o No inpatient beds (acute or swing)o Proposed edits to OSDH 667 Sub-Chapter 40

.

CMS Rural Solutions Summit: October 19, 2016

CMS gathered rural stakeholders in person at CMS headquarters to discuss ways to improve rural health access, support local innovations in care delivery, and serve as a CMS Rural Council listening session. Workgroups focused on:• Essential healthcare services in rural communities• Enhancing innovation in rural healthcare delivery• Modernizing telemedicine

Outcome from the CMS Rural Solutions Summit

Develop a proposal to CMS for a “payment model demonstration project” to pilot the Outpatient Hospital Model coordinating with:• CMS/CMMI representatives • Other state hospital assocations• Federal Office of Rural Health policy• American Hospital Association

Rural Hospital Initiative:Testing New Approaches to

Payment & Delivery

Presented and proposed by the hospital associations of Colorado*, Kansas, New Mexico and Oklahoma

*Due to legislative changes in CO, they have withdrawn form active participation

Project Goals

• Promote collaboration at all levels of the project – Federal, state, regional and local

• Develop and test:– Health care access point in rural communities as

an alternative to PPS hospital or CAH– Predictable and flexible payment approach that

incentivizes local health improvement, quality and efficiency

• Budget neutral or system savings while access is retained or improved

Tasks/Deliverables to Start

• Secure complete beneficiary Medicare data• Identify and engage sites willing to participate

– Those testing new model– Partner organization

• Discuss with and engage Medicaid and Third Party payers in collaboration

• Address and resolve key statutory and regulatory barriers at state and federal levels

• Path back to previous status if community chooses

Overview of the Model

Overview of Services Provided - CORE

• Primary health care including prenatal care • Urgent & Emergency care • Emergent and non-emergent transportation • Observation • Outpatient and ambulatory services

• Minor procedures • Ancillary services to support primary care and basic

diagnostic • Care coordination, chronic disease management and

other approaches to population health• Active Telemedicine

Overview of Services Provided - OPTIONAL

• If unavailable locally, may be included in the payment model

• Rehabilitative services• Subacute care• Behavioral health• Oral Health • Services needed within a reasonable distance.*

Must be consistent with community need and documented in data.

*Distance will need to be determined with CMS input.

Services That Should Be Available Within Reasonable Distance

• Prenatal services, normal and/or emergency deliveries and subsequent newborn care

• Unique local and regional services • Must be consistent with community need and

documented in data• If unavailable within a reasonable distance* may

be included in the payment model

*Distance will need to be determined with CMS

Payment Principles• To preserve access and improve health, low volume

facilities must be supported with a new approach to payment that is at least budget neutral

– Annual federal grants or support: Built into a fixed payment similar to MedPAC's approach

– Annual financial participation from the local community: To assist in supporting the continued access to services

– One time grant or transitional funding: To bridge challenges as CMS makes payment process changes to fund local costs of transition

Payment Principles (Cont.)• An inclusive budget encompassing all services

• Incentivize clinical integration • Allow flexible use of limited staff and resources to

adjust to day-to-day changes in volume and service needs

• Ideally, all payers should participate in the demonstration to determine exactly how the model can balance the support of access and optimal health for a community as well as incentives for efficiency and high quality

• States in conversations with Medicaid agencies and third party payers as per discussions with CMS

Payment MethodologyBlended Fixed and Encounter

Payment

$ Value Incentive• +/- 2% Risk/Reward of fixed payment• Rural relevant quality, outcome and performance measures, aligned with scope

of services provided by the model• Phase in – Report, Reward, Risk

$ Additional services

• Traditional fee schedule reimbursement for non-core services• Other revenue – investment, grants, philanthropic contributions• Third party payer payments for all non-governmental funded services if not

included in demonstration• Co-pays and deductibles collected in traditional manner

$ Encounter Payments• Paid by all payers participating in demonstration• For all core services • Based on % of traditional fee schedule negotiated to account for fixed payments

$ Grants • Federal Grant to ensure access to emergency services • Local financial support at a minimum of 10% of Federal Grant

$ Fixed Payment

• Tied to Negotiated Base Budget for core services• Multi-year agreement negotiated annually• Paid monthly 1/12th, no back-end reconciliation • Includes all services and a capital allowance• Operational incentive to be efficient and effective to meet budget

LESS

DEPENDABILITY

More

Incentives & Accountability• Reporting, consistent with the nature of the facility, should

document and assess*– Local health improvement services, quality, local population

served by core services, and operational efficiency measures and expense

• Measures should be consistent with the scope of services provided by the facility*

– Recognition should be given to identifying “key” measures and balancing accountability with burdensome processes

• Demonstration facilities would continue to submit encounter data – To support the services provided – To support the process of collecting co-pays and insurance– To document and assess services provided, along with budget

neutrality or savings• Components of a value incentive are included to support the triple

aim*Lessons can be learned from work to identify and test rural relevant measures from other sources

Test Site Eligibility Recommendations• Any previous Medicare and Medicaid certified

hospital located in a CMS designated rural area willing to meet the service, payment and accountability requirements, or

• May have been closed for up to 2-3 years• Must be able to demonstrate community commitment

(cash to the budget)• Average acute census (TBD, likely > two)

Partner Organizations• Any PPS or CAH that provides Inpatient Acute

services not sustainable in test site communityLocal and regional opportunities for collaboration and/or integration, such as primary care and EMS

Questions?