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.

In August 2020, CMS announced a new funding opportunity called the Community Health Access and Rural Transformation (CHART) Model specifically for rural hospitals.

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 Center for Medicare and Medicaid Innovation 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.

On September 10, 2021, CMS announced HHSC is one of four Lead Organizations selected for the Community Transformation Track federal funding opportunity. As the Lead Organization, HHSC 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. Additional information about the Community Transformation Track, as it becomes available, will be included under the CHART Model Award section below. 

CHART Model Funding Tracks

The CHART Model is a funding opportunity from the Centers for Medicare and Medicaid Services. The CHART Model is 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.

CHART Model Community Transformation Track

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)

CMS will replace Medicare fee-for-service claims reimbursement for Participant Hospitals with regular, lump sum payments also called a “capitated payment amount (CPA)” throughout the duration of the CHART Model. The CHART Model CPA will be calculated by CMS, not HHSC. The benefit of this payment change 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 improving 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.

  1. Cooperative Agreement Funding

As the CHART Model Lead Organization for Texas, HHSC will disperse up to $2.7 million in cooperative agreement funding to participant hospitals. Participating hospitals will use the funding to establish partnerships and technical support to address one or more health challenges in the Texas CHART application to establish a telemedicine project that fits the needs of the hospital's county, and to address health disparities and selected social determinants of health.

  1. Operational Flexibilities

CMS will make available certain operational flexibilities to expand Lead Organizations’ ability to implement health care delivery system redesign and promote participating hospitals’ capacity to manage their patients’ care. Lead Organizations, like HHSC, will be responsible for requesting operational flexibilities in their Transformation Plans in consultation with Participant Hospitals.

These flexibilities will be provided through a combination of the Model Design Flexibilities listed in the notice of funding opportunity and through CMMI’s authority under section 1115A(d)(1) of the Act to waive certain Medicare and Medicaid requirements, solely as may be necessary to test the Model. CMMI may waive such requirements of Titles XI and XVIII and of sections 1902(a)(1), 1902(a)(13), 1903(m)(2)(A)(iii), and provisions of section 1934 that were added to section 1115A(d)(1) by the PACE Innovation Act as may be necessary solely for purposes of carrying out section 1115A with respect to testing models described in section 1115A(b).

CHART Model Award

As the lead organization, HHSC will receive up to $5 million in cooperative agreement funding. HHSC’s goal is to use much of the cooperative agreement funding to:

  • Provide technical assistance to hospitals related to transformation
  • Allow hospitals to purchase telemedicine equipment, training, software and hire additional staff, if needed, to implement transformation goals

If successful, residents of participating 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’s purpose is to bring improved financial stability to participant rural hospitals through capitated arrangements and provide strategies to address health challenges through telemedicine. Through the CHART Model, health care providers, as well as public and private payers, can collectively invest in increasing access to care, promoting quality, and improving the health outcomes of residents within their Community.

The estimated project period is October 1, 2021 through December 31, 2028.

If you are interested in receiving additional information about HHSC’s application for CHART Model program, sign up for email updates.

HHSC’s CHART Model application and supplementary references are included below. It is recommended to view the CHART Model application requirements on pages 51 – 59 of the CHART Model Notice of Funding Opportunity before viewing HHSC’s application. These pages show the information HHSC was required to include in its application.

CHART and Rural Health Care Resources