Rural Hospital Grant Facilitation

According to the U.S. Centers for Medicare and Medicaid Services (CMS), about 57 million Americans live in rural communities, and many use Medicare and/or Medicaid as their health insurance. Rural communities face unique challenges when providing health care services, including limited transportation, shortages of facilities and providers, and a lack of technological and delivery innovations.

To improve health care access and outcomes in rural communities, the Texas Legislature enacted Senate Bill 1621 during the regular session of the 86th Legislature in 2019, which required HHSC to create a strategic plan to ensure that Texans residing in rural areas have access to hospital services.

In the most recent Rural Hospital Services Strategic Plan Progress Report (PDF), HHSC identified three key strategies, outlined below, to further the goal of ensuring access to hospital services and reducing rural hospital closures:

  1. Ensure that Medicaid reimbursements are adequate and appropriate.
  2. Increase access to established revenue opportunities to maximize reimbursement for hospitals.
  3. Identify challenges that hospitals experience in providing services to persons covered by Medicare and other payers.

To accomplish the second strategy, HHSC has been working with other state agencies to identify federal grant opportunities for rural hospitals and health care providers. In August 2020, CMS announced a new funding opportunity called the Community Health Access and Rural Transformation (CHART) Model.

The CHART Model will test whether aligned financial incentives, increased operational flexibility, and robust technical support can assist rural health care providers' capacity to implement an effective redesign of their health care delivery system. The CMS Innovation Center will evaluate the impact of the CHART Model on Medicare and Medicaid expenditures, access to care, quality of care and health outcomes.

To assist rural communities overcome challenges and build on previous successes, HHSC partnered with a limited number of rural Texas hospitals to apply for the CHART Model funding opportunity for the Community Transformation Track.

HHSC applied as the Lead Organization on behalf of the state for the CHART Model funding opportunity for the Community Transformation Track. The Lead Organization will be responsible for driving health care delivery system redesign by leading the development and implementation of Transformation Plans as well as convening and engaging the Advisory Council.

CHART Model Funding Opportunity

The CHART Model is a funding opportunity from the Centers for Medicare and Medicaid Services. The CHART Model will be a voluntary opportunity for rural communities to test health care transformation supported by payment reform.

There are two tracks for which Lead Organizations can apply for funding:

  • The Community Transformation Track – Provides award recipients with cooperative agreement funding and a programmatic framework to assess the needs of their Community and implement health care delivery system redesign. This track builds on the lessons from the Maryland Total Cost of Care Model and Pennsylvania Rural Health Model.
  • The Accountable Care Organization (ACO) Transformation Track – Provides upfront payments to rural ACOs that join the Medicare Shared Savings Program. This track builds on lessons learned from the ACO Investment Model. CMS will release the Request for Application in spring 2022.

The CHART Community Transformation Track will provide rural hospitals with three ways to transform their local health care system:

  1. Regular lump sum payments based on a hospital's Medicare fee-for-service income (a.k.a. capitated payment amount)
  2. Certain operational flexibilities
  3. Cooperative agreement funding distributed through the Lead Organization for a telemedicine/telehealth project.

Specifically, CMS will replace Medicare fee-for-service claims reimbursement for Participant Hospitals with regular, lump sum payments also called a "capitated payment amount (CPA)" over the duration of the CHART Model. The benefit to hospitals is that the CPA payment provides stability and predictability, as well as the freedom to invest in new service lines and utilize regulatory flexibilities offered by the CHART Model initiative. For example, hospitals may have had to focus on providing higher-reimbursing specialty services over essential primary care and behavioral health capacity or maintaining inpatient beds to meet Medicare conditions of participation, even when it may not be what is needed in the community. The CHART Model CPA will be calculated by CMS, not HHSC.

Up to 15 Lead Organizations will be selected, with up to $5 million in cooperative agreement funding available for each Lead Organization participating in the CHART Community Transformation Track. Participant Hospitals will receive a portion of the cooperative agreement funding through the Lead Organization to establish partnerships and technical support to address one or more health challenges in the CHART community through a telemedicine project that fits the needs of the hospital's county.

If successful, residents of these rural communities should see improvement in access to health care services, financial stability of providers, and an alignment of payers and other stakeholders to address both the communities' needs and social support structures, such as food and housing, to ensure improved health. Ultimately, the CHART Model aims to improve quality and health, while reducing Medicare and Medicaid expenditures, in rural communities over the long term.

If you are interested in receiving additional information about HHSC's application for CHART, sign up for Hospital Finance email updates.

CHART and Rural Health Care Resources