CMS NEWS

FOR IMMEDIATE RELEASE
January 10, 2017
Contact: CMS Media Relations
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Pennsylvania Rural Health Model aims to help rural hospitals improve quality, address community health needs

Today, the Centers for Medicare & Medicaid Services (CMS) and Pennsylvania announced the Pennsylvania Rural Health Model, a new initiative of the CMS Center for Medicare and Medicaid Innovation (Innovation Center). The Model is designed to improve health and health care in rural Pennsylvania under an agreement signed by Governor Tom Wolf and Pennsylvania Secretary of Health Karen Murphy.

Specifically, the Model seeks to increase rural Pennsylvanians’ access to high-quality care and improve their health, while also reducing the growth of hospital expenditures across payers, including Medicare, and increasing the financial viability of the state’s rural hospitals to ensure continued access to care facilities. Pennsylvania, through its Department of Health, will be a key partner in jointly administering this model with CMS.

Under this model, participating rural hospitals will receive all-payer global budgets—or a fixed amount of money that is set in advance and funded by all participating payers—to cover the inpatient and outpatient services they provide. Rural hospitals will use this predictable funding to deliberately redesign the care they deliver to improve quality and meet the health needs of their local communities.

The Model is open to critical access hospitals and acute care hospitals in rural Pennsylvania. In addition, other payers covering individuals in the Commonwealth, including Medicaid and commercial health plans, are eligible to participate in the model by paying participating rural hospitals through global budgets.

“The Pennsylvania Rural Health Model presents a historic opportunity for rural hospitals. We believe the hospitals will be able to improve the quality of care they provide to their patients, and will also help address the underlying health needs in their communities,” said Patrick Conway, M.D., CMS Principal Deputy Administrator and Chief Medical Officer. “The Model will help rural hospitals remain financially viable and continue to provide essential services to the people in their communities.”

CMS intends to provide Pennsylvania with $25 million, which is a portion of the funding to begin implementing the Pennsylvania Rural Health Model. Pennsylvania will use this funding to operate the model, including data analytics, quality assurance, and technical assistance to help rural hospital participants create and implement plans to improve quality of care and address the most prevalent health needs in the communities they serve.

The Pennsylvania Rural Health Model aims to build on CMS’ partnerships with states to deliver high-quality, innovative care. CMS has partnered with 38 states and territories through the State Innovation Models Initiative to improve quality and population health, and leverage state-based innovation. CMS has been partnering with Maryland since 2014 through the Maryland All-Payer Model to shift hospital payments to global budgets that reward value over volume. In October 2016, CMS announced the Vermont All-Payer Accountable Care Organization Model to build on the Maryland All-Payer Model by transforming care statewide, beyond the hospital. Pennsylvania participated in the State Innovation Models Initiative as a Round 2 Design State, which has helped support the development of the Pennsylvania Rural Health Model. The Pennsylvania Rural Health Model will provide valuable insight for other opportunities for CMS to participate in state-driven, all-payer payment and care delivery transformation efforts that address the challenges faced by rural providers.

The Pennsylvania Rural Health Model is possible as a result of the Affordable Care Act, which created the CMS Innovation Center to test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care for Medicare, Medicaid, and Children’s Health Insurance Program beneficiaries. The purpose of this innovation is to pay hospitals and clinicians based on the quality, not quantity, of care they give patients. Today’s announcement is part of the broader strategy to improve the health system by paying providers for what works, unlocking health care data, and finding new ways to coordinate and integrate care to improve quality.

For more information on the Pennsylvania Rural Health Model, please view the Fact Sheet or visit theCMS website.