Rural Health Policy

Regulatory Review

The Federal Office of Rural Health Policy is charged in Section 1102(b) of the Social Security Act with advising the Secretary of the U.S. Department of Health and Human Services on the effect that federal health care policies and regulations may have on rural communities. Monitoring current and proposed changes, including programs established under titles XVIII and XIX (Medicare and Medicaid), FORHP analyzes their impact on the financial viability of small rural hospitals and clinics, on the ability of rural areas to attract health professionals, and on rural areas’ access to high quality care.

Data collection and analysis is essential to understanding the challenges in rural communities, how those communities are impacted by policy, and setting policy for the future. For this reason, the work of the Rural Health Research Centers informs that of FORHP’s policy team and vice versa.

Policy Updates

October 11

Evaluating the Bundled Payment for Care Improvement (BPCI) Initiative.  CMS released the fifth evaluation report for the BPCI Initiative, which tests whether linking payments for all providers that furnish Medicare-covered services during an episode of care related to an inpatient hospitalization can reduce expenditures while maintaining or improving quality of care.  For Model 2, the most comprehensive model, 8 percent of hospitals initiating episodes were in rural areas.  Rural participants reported challenges with scarcity of potential partners (e.g., primary care physicians, specialists, and community services); lack of knowledge of programs such as BPCI among providers; and limited internal staffing resources.  However, they also reported that being a rural provider did not affect their ability to collaborate with post-acute care providers because they had developed relationships or collaborative efforts prior to BPCI.  The Innovation Center also announced participants to the new BPCI-Advanced Model.  

October 4

GAO Report on Rural Hospital Closures. In response to a request from Congress, the US Government Accountability Office (GAO) analyzed how the Department of Health and Human Services supports and monitors rural hospitals' financial viability and rural residents' access to hospital services as well as the characteristics of rural hospitals that have closed in recent years.  From 2013 to 2017, 64 rural hospitals closed, more than twice as many as during the previous 5-year period.  Closures disproportionately occurred in the South, among for-profit hospitals, and among Medicare Dependent Hospitals—small rural hospitals with Medicare beneficiaries accounting for a certain percentage of their business.  Financial distress was the primary reason for closure, with multiple factors exacerbating the distress, including a decrease in patients seeking inpatient care and across-the-board Medicare payment reductions.

Hospital Readmission Reduction Program Changes for Safety Net Hospitals. As of October 1, 2018, CMS began a new methodology to assess hospital performance under the Hospital Readmission Reduction Program (HRRP), which reduces payments to inpatient prospective payment system (IPPS) hospitals with excess readmissions.  The new method evaluates hospital performance relative to other hospitals with similar proportions of patients that are dually eligible for Medicare and full-benefit Medicaid.  Critical Access Hospitals HRSA Exit Disclaimerare exempt from the HRRP, but tracking readmissions in CAHs is an area of focus of the Medicare Beneficiary Quality Improvement Project (MBQIP)HRSA Exit Disclaimer

September 27

Updated Survey and Certification Procedures for Hospitals with Swing Beds. The Centers for Medicare & Medicaid Services (CMS) recently updated the Appendices in the State Operations Manual (SOM) to reflect revisions to the regulations and guidelines for survey procedures for hospitals and critical access hospitals (CAHs) that operate swing beds. They updated Appendix A, Survey Protocol, Regulations and Interpretive Guidelines for Hospitals, and Appendix W, Survey Protocol, Regulations and Interpretive Guidelines for CAHs and Swing Beds in CAHs, to reflect significant revisions to the Survey Protocol and deleted Appendix T.  These revised policies are effective immediately.  

September 20

Comments Requested: Reducing Regulations for Healthcare Providers – November 19.  The Centers for Medicare & Medicaid Services seeks comments on a proposed rule to reform Medicare regulationsHRSA Exit Disclaimer conditions of participation (CoPs), and conditions for coverage (CfCs) for health care providers and suppliers.  The proposals seek to simplify and streamline processes, reduce the frequency of activities, and remove obsolete, duplicative, or unnecessary requirements for Critical Access Hospitals, Community Mental Health Clinics, Rural Health Clinics, and Federally Qualified Health Centers, among others. Submit comments to

NQF Final Report:  Rural-Relevant Measures for Healthcare Quality. HRSA Exit Disclaimer  The National Quality Forum (NQF) released their first set of quality measures for rural hospitals and ambulatory care facilities to improve quality of care and access in rural areas. The Measures Application Partnership (MAP) formed a Rural Health Workgroup that provides recommendations from a rural perspective and developed these measures.   

2018 Rural Hospital and Clinic Financial Summit Report. HRSA Exit Disclaimer The National Rural Health Resource Center, with the support of the Federal Office of Rural Health Policy, developed this report following a Summit of key rural hospital and clinic stakeholders to identify the most important financial indicators and strategies to transition to value-based payment. This report is designed to help rural hospital and clinic leaders meet this transition with financial success. 

Call for National Advisory Committee NominationsHRSA seeks nominations for new members to serve on its Health Workforce National Advisory Committees. The five committees advise the HHS Secretary and Congress on health workforce policies and programs. HRSA accepts nominations on a continuous basis and considers them as vacancies occur. You may nominate yourself or others. Professional associations and organizations may also nominate qualified candidates.  As with all of HRSA’s Federal Advisory Committees, diverse geographic representation can strengthen the work and recommendations of each group.

September 13

Request for Comment: Surgeon General’s Call to Action – November 5.  Surgeon General Calls to Action are science-based summary documents intended to stimulate action nationwide to solve an urgent public health problem. Calls to Actions provide recommended actions along with implementation strategies for sectors to take to reverse trends. For an upcoming Surgeon General's Call to Action with a working title “Community Health and Prosperity,” the Centers for Disease Control and Prevention (CDC) seeks comment from the public with written views, recommendations, and data about how investing in communities can improve health and prosperity.  Comments from rural individuals and organizations describing challenges and successes may help shape policy and action on this effort.

FCHIP Interim Report to Congress.  Since August 1, 2016, ten Critical Access Hospitals (CAHs) in Montana, Nevada, and North Dakota have participated in the Frontier Community Health Integration Project Demonstration (FCHIP) to test how changes in Medicare payment for ambulance, skilled nursing, and telehealth services affect health outcomes in sparsely populated frontier communities. Last month, FORHP and CMS released a joint report to Congress detailing the CAHs’ progress and experiences in the first year of the demonstration.   The report finds little change for ambulance or skilled nursing services while telehealth services encountered credentialing, licensing, scheduling, and other common administrative challenges. FCHIP will conclude on July 31, 2019, unless extended by Congress.  FORHP and CMS must submit a final report to Congress by July 31, 2020.

USPSTF Recommendation to Prevent Youth Substance AbuseHRSA Exit Disclaimer The U.S. Preventive Services Task Force (USPSTF) conducts rigorous evaluations of existing peer-reviewed studies to inform evidence-based recommendations about clinical preventive services, such as screenings, counseling, and other primary care services.  USPSTF released its final research plan on how primary care providers can prevent illicit and nonmedical drug use, including opioid abuse, among children, adolescents, and young adults.  Before issuing its final recommendation on these services, USPSTF will review the evidence to determine whether counseling interventions referred by primary care providers improve health outcomes and related social, educational, and behavioral outcomes.

September 6

Comments Requested:  Electronic Health Record Reporting – October 17.  The HHS Office of the National Coordinator for Health Information Technology (ONC) is seeking input from the public regarding the Electronic Health Record (EHR) Reporting Program established as Section 3002 of the 21st Century Cures Act (Cures Act). This request for information (RFI) is a first step toward implementing the statute. The responses will be used to inform discussions among stakeholders and future work toward the development of reporting criteria under the EHR Reporting Program. The RFI seeks comments on two sections with the first focusing on ‘cross-cutting’ priorities on the intersection of health IT product-related reporting criteria and healthcare provider reporting criteria, and the second section requesting input on specific focus areas including the reporting criteria ‘categories’ required by the Cures Act. Visit the Rural Health Information Hub for more on the benefits and challenges to EHR adoption in rural areasHRSA exit disclaimer

August 30

Comments Requested: Reducing Regulatory Burden for Care Coordination – October 26.  HHS Office of Inspector General (OIG) has published a request for information (RFI) seeking input on ways in which it might modify or add new safe harbors to the anti-kickback statute and exceptions to the beneficiary inducements civil monetary penalty (CMP) definition of “remuneration.”  Specifically, OIG is looking for information on how to address any regulatory provisions that may act as barriers to coordinated care or value-based care. This RFI is a companion to a recent CMS RFI on the Physician Self-Referral Law (also known as the “Stark Law”).  Rural providers and stakeholders may share their thoughts on a variety of questions about the impact of the anti-kickback statute and beneficiary engagement, such as whether there should be an increase in the “nominal value” from no more than $15 per item or $75 in the aggregate per patient on an annual basis in an effort to promote care coordination and value-based care. 

August 16

Comments Requested: New Plans for Medicare Shared Savings Program for ACOs – October 16.  CMS seeks public input on a proposed redesign of the Shared Savings Program for Accountable Care Organizations (ACOs).  In the past, the Shared Savings Program offered three-year contracts with a choice of Tracks, each offering shared savings, and multiple Tracks requiring shared losses (i.e. downside risk or two-sided risk).  CMS proposes to offer five-year contracts and two Tracks, both of which include shared savings and losses.  For ACOs new to the Shared Savings Program, CMS proposes to have a one-time new agreement starting July 1, 2019.  Current ACOs ending on December 31, 2018 may extend their current agreement period for an additional 6-months and apply for a new agreement beginning on July 1, 2019.  See the Fact Sheet for a summary of the proposals.  CMS encourages rural ACOs, providers, and beneficiaries to provide comments at using file code CMS-1701-P. 

Medicare Payment and Policy Changes for Skilled Nursing FacilitiesCMS published its final rule for FY 2019 updating payment rates and rules for skilled nursing facilities (SNFs) and non-Critical Access Hospital (CAH) swing beds. CMS received 209 comments on the previously published proposed rule. The rule includes an overall proposed payment rate increase of 2.4 percent ($820 million), with rural SNFs and non-CAH swing beds experiencing this payment rate increase as 2.5 percent. CMS will also replace the current case-mix system with a new system called the Patient Driven Payment Model (PDPM) by October 2019, which is projected to increase payments to small and rural SNFs and non-CAH swing beds. The proposed rule also includes changes to the SNF quality reporting program and changes to the SNF value-based purchasing program.

Medicare Updates to Hospice Prospective Payment System and Policy.   CMS published its final rule for FY 2019 updating payment rates and rules for hospices. CMS received 56 comments on the previously published proposed rule.  This final rule includes an overall payment increase of 1.8 percent ($340 million), with rural hospices experiencing the increase as 1.9 percent. CMS also will now allow physician’s assistants to be recognized by Medicare as an attending physician beginning January 1, 2019. The rule also includes changes to the quality reporting program, including removal of routine individual public reporting of seven hospice item set measures and instead displaying them as a composite.

Medicare Updates to Inpatient Rehabilitation Facility Prospective Payment System.  CMS published its final rule for fiscal year FY 2019 updating payment rates and rules for inpatient rehabilitation facilities (IRFs). CMS received 108 comments on the proposed rule. In addition to a payment rate increase of 1.3 percent ($105 million) compared to last year, this final rule updates the IRF quality reporting program, including adding a new quality measure removal factor to consider on a case-by-case basis whether costs outweigh benefits of maintaining a measure and removing two measures from the measure set related to seasonal flu and methicillin staphylococcus aureus (MRSA). In addition, several IRF-Patient Assessment Instrument items including the FIM instrument are eliminated in FY 2019, resulting in changes to the IRF case-mix that will take effect in FY 2020. Rural IRFs will experience the payment increase as 1.1 percent more than FY 2018.

Medicare Payment and Quality Reporting Updates for Inpatient Psychiatric Facilities.  CMS published its final rule for fiscal year (FY) 2019 updating payment rates and rules for inpatient psychiatric facilities (IPFs). CMS received 88 comments on the previously published proposed rule. The final rule includes an overall proposed increase in the payment rate by approximately 1.3 percent, or $50 million, for FY 2019. Rural IPFs will experience this as a 0.83 percent payment increase. CMS is also continuing to apply the 17 percent payment adjustment for IPFs located in rural areas, which has been in place since 2004. The rule also updates the IPF quality reporting program by adding a new quality measure removal factor to consider on a case-by-case basis whether costs outweigh benefits of maintaining a measure and removing five measures beginning with the FY 2020 payment determination.

July 12

Now Available: MIPS 2019 Payment Adjustment Fact Sheet. CMS posted an additional resource to help eligible clinicians and groups understand their Merit-based Incentive Payment System (MIPS) 2019 payment adjustment based on their 2017 performance. Some rural clinicians and CAHs may participate in MIPS and can review this fact sheet to learn more about how CMS assigns final scores to MIPS eligible clinicians and how payment adjustment factors are applied for 2019 based on 2017 MIPS final scores.

June 7

CMS Updates Drug Spending Dashboards.  The Centers for Medicare & Medicaid Services (CMS) redesigned their Drug Spending Dashboards to “include year-over-year information on drug pricing and highlight which manufactures have been increasing their prices.”  The interactive online tools use data reported for both Medicare and Medicaid, and are designed to help patients, clinicians, researchers, and the public understand trends in drug spending. Rural access to pharmaceuticals is challenged by typically higher costs due to lower volumeHRSA exit disclaimer

First Medicaid and CHIP Scorecard Released.  The new Medicaid and Children's Health Insurance Program (CHIP) Scorecard, developed by CMS, provides information on State Health System Performance, State Administrative Accountability, and Federal Administrative Accountability.  It reports measures such as enrollment, expenditures, state and federal time to review waivers, and beneficiary outcomes to increase public transparency about the programs’ administration and outcomes, which may be of interest to State Offices of Rural Health and other rural stakeholders. Access to health care through insurance is one of the socioeconomic factors measured in the 2018 County Health Rankings at the top of this newsletter.

New Fact Sheets about Confidentiality of Substance Use Disorder (SUD) Records.  The Department of Health and Human Services released two factsheets to help providers and health information exchange (HIE) organizations understand how to appropriately access and securely share health information with the patient’s consent under Title 42 of the Code of Federal Regulations Part 2 (aka “Part 2”).  This law protects the confidentiality of SUD patient records by restricting the circumstances under which programs or other lawful holders can disclose such records.  As treatment options in rural areas are moving towards integrating behavioral health and primary care services HRSA exit disclaimer, understanding how Part 2 provisions can be used across different environments, including through electronic HIE mechanisms and in provider office settings, will ensure privacy and improve care.

May 24

Rural Feedback Heard on New Directions for the CMS Innovation Center.   CMS posted online the more than 1000 comments received in response to the September 2017 Request for Information (RFI) on a new direction for the Innovation Center to promote patient-centered care and test market driven reforms. They heard from consumers, physicians, health systems, health plans, national and state associations, and community-based providers.  Rural-focused comments covered a range of topics from expanding telehealth and improving availability of care in underserved areas to expanding Medicare Advantage plan options and supporting rural physician participation in Advanced Alternative Payment Models

CMS Encourages Eligible Suppliers to Participate in Diabetes Prevention ProgramBeginning in 2018, both traditional healthcare providers and community-based organizations, including community health workers, can enroll as Medicare suppliers in the Medicare Diabetes Prevention Program (MDPP), a national model offering a new approach to type 2 diabetes prevention. After achieving preliminary or full recognition through the CDC, organizations can enroll in Medicare to become an MDPP supplier on a rolling basis. Rural areas tend to have higher rates of diabetes than urban areas.

GAO Report Assesses CMS Innovation Center Performance.   The Government Accountability Office (GAO) recently concluded that the CMS Innovation Center met its 2015 goal of identifying, testing, and improving health care payment and delivery models, and it partially met the goals of reducing the growth of health care costs and spreading successful practices and models.  Rural Accountable Care Organization (ACO) models, such as the ACO Investment Model, contributed to the goal of implementing new models.  The report also describes how new models are conceived and implemented, including how geographic location can be a factor in the participant selection process.

Date Last Reviewed:  October 2018

Questions about Policy Updates?