CMS Announces New Payment Model for Rural Providers

On August 11, the Center for Medicare & Medicaid Services (“CMS”) announced the creation of its new Community Health Access and Rural Transformation (“CHART”) Model. The CHART Model seeks to provide new seed funding and other payment structures as well as technical support and regulatory flexibility to rural providers. The Model’s goal is to help rural communities develop a more comprehensive health care system that provides higher quality care at an affordable price. The CHART Model has two tracks for participation – the Community Transformation Track and the Accountable Care Organization Transformation Track.

With the Community Transformation Track, CMS plans to invest up to $75 million dollars in seed money to fifteen entities that represent rural communities, which may include, state Medicaid agencies, local public health departments, Academic Medical Centers, and state offices of rural health. The entities will receive an upfront payment from CMS, and then be responsible for working with community partners such as hospitals and other state agencies to redesign the health care delivery system in their area.

The goal of the Community Transformation Track is to offer rural providers a more stable revenue stream through predictable capitated payments, as well as more regulatory and operational flexibility. For example, waiving certain Medicare hospital Conditions of Participation to allow rural outpatient departments and emergency rooms to be paid as if they were classified as hospitals and enhancing telehealth by allowing a beneficiary’s residence to be an originating site. In September, CMS will select up to fifteen rural communities to participate in the Community Transformation Track, with the name of the participants announced in early 2021. The Community Transformation Track model is set to start in summer 2021.

The other track is the Accountable Care Organization (ACO) Transformation Track. Providers participating in the ACO Transformation Track will enter into a two-sided risk sharing arrangement as part of the Medicare Shared Savings Program. Participants will receive advanced shared savings payments, which will vary based on the level of risk that the ACO accepts and the number of rural beneficiaries assigned to it. CMS intends to release a Request for Applications for participation in the ACO Transformation Track in Spring 2021. Up to twenty rural ACOs will be selected to participate in the model program beginning in January 2022.

If you have any questions regarding the CHART Model, please contact one of the authors of this alert.