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 – February 6, 2017

Final Hospital Notice and Instructionsfor implementation March 8. The Centers for Medicare & Medicaid Services (CMS) posted its final version of the Medicare Outpatient Observation Notice (MOON), which is a standard notice that all hospitals and critical access hospitals (CAHs) must issue (starting March 8) and explain to all Medicare beneficiaries receiving outpatient services for more than 24 hours. Under the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act of 2015, hospitals and CAHs must issue the MOON within 36 hours of the start of observation services, or sooner if the beneficiary is transferred, discharged, or admitted as an inpatient. The MOON informs beneficiaries that they are an outpatient receiving observation services, not an inpatient, and explains the associated implications for cost-sharing and eligibility for Medicare coverage of skilled nursing facility services. CMS also updated instructions for the MOON to address several issues, including formatting requirements, what to do when a beneficiary refuses to sign, and the intersection with applicable State laws. For instance, hospitals and CAHs may (1) deliver the MOON before the beneficiary receives 24 hours of observation services and/or (2) attach an additional page to the MOON in order to comply with any applicable state laws.

Request for Region 4 Rural Health Clinics (RHCs) – RHCs in Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee have the opportunity to participate in an Accountable Care Organization (ACO) study via a phone interview.  Researchers at the University of Central Florida’s College of Health and Public Affairs are conducting an NIH-funded study.  As part of the study, they are conducting 20-minute phone interviews with RHC management who are knowledgeable about ACOs, but choose not to participate in them at this time.  The purpose of the phone interviews is to gain a better understanding of impressions about how the ACO model is (or is not) meeting the needs of RHCs at this time.  The opinions of RHC personnel are an important part of the study.  If you are interested in participating in a phone interview on this topic, please contact the study lead investigator Dr. Judy Ortiz at

CMS Requests Feedback on MIPS Virtual Groups: On a January 27 webinar on Virtual Groups in the Quality Payment Program (QPP), CMS requested participation on a user group to gather feedback on operational elements and other dynamics related to Merit-Based Incentive Payment System (MIPS) virtual groups under the QPP.  Individual MIPS eligible clinicians or a group consisting of not more than 10 MIPS eligible clinicians can elect to form a virtual group with at least one other such individual MIPS eligible clinician or group of not more than 10 MIPS eligible clinicians for a performance period of a year under the QPP. CMS will provide more details about virtual groups in future rulemaking; however, the user group provides an opportunity for rural eligible clinicians to provide input from a rural perspective. Those interested in participating on the user group should send an email to CMS at The MIPS user group for virtual groups in the QPP is expected to convene between February and May of 2017.  

Policy Updates – January 31, 2017

New CMS Care Management Webpage: CMS recently unveiled a new Care Management webpage on the Physician Fee Schedule website. This new webpage includes documents such as fact sheets and FAQs that will be useful for rural providers on chronic care management services, transitional care management, and similar services under the Medicare physician fee schedule.  Rural providers should bookmark the new webpage and check back often for new content.
New Regulations on Substance Use Disorder Patient RecordsEffective February 17. In mid-January, the Substance Abuse and Mental Health Services Administration (SAMHSA) published its final rule updating the Confidentiality of Alcohol and Drug Abuse Patient Records regulations for the facilitation and exchange of patient substance use records.  This final rule addresses privacy concerns of patients seeking treatment for substance use disorder and provides further guidance on patient consent.  All programs or providers that receive federal funding including rural providers and programs are subject to the provisions of this final rule.  For more information, visit SAMHSA’s Substance Abuse Confidentiality Regulations Webpage.

AHRQ Seeks Information From Healthcare Delivery OrganizationsFebruary 28. The Agency for Healthcare Research and Quality (AHRQ) is seeking comments from healthcare delivery organizations about current challenges they are facing as well as solutions they are implementing as they strive to become learning healthcare systems.  This is an opportunity for rural accountable care organizations and other rural providers to provide input on their challenges and achievements.  As discussed in this request, a learning healthcare system is as an organization that is designed to generate and apply the best evidence for the collaborative healthcare choices of each patient and provider; to drive the process of discovery as a natural outgrowth of patient care; and to ensure innovation, quality, safety, and value in health care.  Recommendations on ways in which AHRQ can assist healthcare providers in achieving their learning network goals are also being requested.  Comments can be submitted on or before February 28, 2017.

New Deadline for Hospital Data SubmissionMarch 13.  The Centers for Medicare & Medicaid Services (CMS) recently announced that the deadline for submitting 2016 electronic clinical quality measure (eCQM) data has been extended from February 28 to March 13. The extension allows hospitals and critical access hospitals (CAHs) participating in the Hospital Inpatient Quality Reporting (IQR) or Medicare Electronic Health Records (EHR) Incentive (i.e., “meaningful use”) programs additional time to submit the necessary eCQM data to avoid a 2.7% payment reduction in 2018. Under these programs, CMS requires hospitals and CAHs to report on at least four eCQMs using 2014- or 2015-certified EHRs. Of note, CMS is considering modifying the number of required eCQMs for 2017 reporting for future rulemaking. CMS also notes that it plans to address stakeholder concerns and challenges related to EHR systems and eCQM reporting in the FY 2018 Inpatient Prospective Payment System (IPPS) rule.  Rural providers and other stakeholders interested in commenting on these and other issues should plan to submit comments on the proposed rule, which should be published in late spring 2017.

New Home Health Care Rules.  In the first update since 1989, CMS’ final rule for home health agencies (HHAs)  modernizes and streamlines requirements to incorporate recent advances and medical practices that focus on patient-centered, data-driven, and outcome-oriented care. Among the changes, CMS now requires HHAs to inform all beneficiaries of patient rights and responsibilities prior to care delivery, assess all admitted patients’ risk for re-hospitalization, and implement agency-wide quality assessment and performance improvement (QAPI) programs. Of note for HHAs in rural areas disproportionately affected by physician shortages, CMS revised its policy to allow licensed practical nurses (LPNs) acting within their state licensure requirements and state scope of practice laws to receive verbal orders for home health services, although statute requires that only physicians establish the home health plan of care. The final rule takes effect July 13.

Policy Announcements January 13, 2017

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CMS Issues New Guidance for Hospitals (PDF – 50 KB). Last month, the Centers for Medicare & Medicaid Services (CMS) issued preliminary guidance clarifying the 21st Century Cures Act provisions that impact hospital outpatient off-campus provider-based departments (PBD) with concrete plans for construction at the passing of the Bipartisan Budget Act of 2015. The Cures law extended the grandfather date for those facilities to qualify for payment under the outpatient prospective payment system, rather than at the lower “site-neutral” rate. On Dec. 28, CMS also issued sub- regulatory guidance (PDF – 408 KB) on how hospitals can request from their CMS Regional Office a relocation exception for an excepted off-campus provider based department due to an extraordinary circumstance. Please see the fact sheet for more information on the finalized Hospital Outpatient Prospective Final Rule and provisions related to payments for off-campus PBDs.

Report to Congress: Performance Under Value-Based Purchasing Programs. In December, the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) issued the first of two reports to Congress mandated by the IMPACT Act that analyze the effect of social risk factors on Medicare quality measures and quality-based payment programs. In this first report, ASPE considered how the performance of hospitals, health plans, physicians, dialysis facilities, skilled nursing facilities, and home health agencies were affected by the following six social risk factors: (1) dual enrollment in Medicare and Medicaid, (2) residence in a low-income area, (3) Black race, (4) Hispanic ethnicity, (5) residence in a rural area, and (6) disability status. Of the risk factors considered, ASPE found that dual enrollment was the most powerful predictor of poor performance. While beneficiaries’ rural residence was not a significant predictor, rural beneficiaries are more likely to be dually enrolled (PDF – 442 KB) than their urban counterparts. In its results, ASPE finds that beneficiaries with social risk factors had poorer outcomes on many process, clinical outcome, and patient experience measures, and in every care setting examined, providers that cared for higher proportions of beneficiaries with social risk factors tended to perform worse than their peers, even after adjusting for beneficiary characteristics, leading to financial penalties across all five Medicare quality-based payment programs.

CMS Unveils New Compare Websites and Data Updates. In December, CMS also announced two new websites providing quality data on inpatient rehabilitation facilities (IRFs) and long-term care hospitals (LTCHs): IRF Compare and LTCH Compare. The new Compare sites report performance measures from the IRF and LTCH quality reporting programs, such as the percentage of patients with new or worsened pressure ulcers and the rate of unplanned readmissions within 30 days after discharge. Of note for rural residents, the IRF Compare site includes information on inpatient rehabilitation units at both critical access hospitals and other rural hospitals. LTCH Compare also includes rural providers, though these make up only about 5% of all LTCHs. CMS has also provided data updates for the Hospice Quality, Hospital Compare, and Physician Compare websites.

Participate in TOH Quality Measures Pilot – Deadline to submit has already passed. Rural-based Skilled Nursing Facilities (SNFs), Inpatient Rehabilitation Facilities (IRFs), Long Term Care Hospitals (LTCHs), and Home Health Agencies (HHAs) that have been Medicare-certified for at least one year are eligible to participate in a pilot that allows CMS to test two new efforts to standardize quality measure reporting under the Improving Medicare Post-Acute Care Transformation Act (IMPACT Act) of 2014 (PDF – 1.2 MB). Participation in the Transfer of Health Information and Care Preferences (TOH) pilot allows rural agencies and facilities to provide input for the ongoing development of quality measures and to provides a greater understanding of how TOH data collection might impact patient care in rural areas. To participate, one needed to submit the Interest Form found in the Transfer of Health Pilot zip file by January 17.

Health Workforce Connector – Comment by February 3. To expand the function of the National Health Service Corps Jobs Center, HRSA seeks comments on the information collected to develop a Health Workforce Connector. The Connector would provide a central platform where users can create a profile, search for NHSC and NURSE Corps sites and find job opportunities in underserved communities with facilities in need of providers.

Request for Information: PACE Innovation Act – Comment by February 10. CMS is seeking public input on potential adaptations to the Programs of All-Inclusive Care for the Elderly (PACE), which provides medical and social services to certain frail, community-dwelling elderly individuals most of whom are eligible for Medicare and Medicaid benefits. The changes would implement a new five-year test model for additional beneficiaries, age 21 and older, with disabilities that impair their mobility and who require a nursing home level of care. This is an opportunity for rural providers to provide CMS with input on rural considerations for expanding the program.

CMS Seeks Nominations for Advisory Panel on Hospital Outpatient Payment – Submit by February 21. CMS seeks nominations for the Advisory Panel on Hospital Outpatient Payment. The purpose of the Panel is to advise the Secretary of the Department of Health and Human Services and CMS on the clinical integrity of the Ambulatory Payment Classification groups and their associated weights, and supervision of hospital outpatient therapeutic services. For supervision deliberations, the Panel is interested in members that represent the interests of critical access hospitals.

Last Reviewed: January 2017