Seeking Models for Sustaining Access to Health Care in Rural Communities Rural Hospital Conference of the Carolinas November 9, 2017 Andy Fosmire, M.S., VP for Rural Health Oklahoma 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 Morgan CEO, 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/ruralpoverty-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 Health Guiding 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 Summary Critical Access Hospital Payment Reform Task Force member driven endeavor Analyzed HCRIS, operating margin profiles, admissions trends, case mix, and swing bed rates CAH 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 Summary IHA 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 postacute care
Pennsylvania approach: Rural Global Budget Model is driven by a hospital-led transformation plan and enabled by a global budget (Project funded by a $25 million grant from CMMI) Fixed annual revenue (global budget) 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 Transformation support (Rural Health Redesign Center) 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 SOURCE: Pennsylvania Department of Health and Hospital Association of Pennsylvania 30
Oklahoma Hospital Association Summary Council 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
Hybrid of CAH and FQHC Oklahoma Options: Two Sub-models o Allows for acute inpatient, swing beds, outpatient services, cadre of required FQHC services (behavioral health, oral health, sliding fee scale) 24-Hr outpatient hospital o 24-hr emergency treatment, stabilization o Primary Care and Outpatient services o Short Term Observation o No inpatient beds (acute or swing) o Proposed edits to OSDH 667 Sub-Chapter 40
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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 Methodology Blended Fixed and Encounter Payment LESS D E P E N D A B I L I T Y More $ Value Incentive $ Additional services $ Encounter Payments $ Grants $ Fixed Payment +/- 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 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 Paid by all payers participating in demonstration For all core services Based on % of traditional fee schedule negotiated to account for fixed payments Federal Grant to ensure access to emergency services Local financial support at a minimum of 10% of Federal Grant Tied to Negotiated Base Budget for core services Multi-year agreement negotiated annually Paid monthly 1/12 th, no back-end reconciliation Includes all services and a capital allowance Operational incentive to be efficient and effective to meet budget
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 community Local and regional opportunities for collaboration and/or integration, such as primary care and EMS
Questions?