CMS unveils new payment model for rural hospitals: 10 things to know

CMS announced Aug. 11 that it is launching a new payment model to provide up-front investments and capitated payments to healthcare organizations in rural areas. 

Here are 10 things to know about the Community Health and Rural Transformation Model: 

1. Through the CHART Model, CMS said it aims to address disparities by providing a way for rural communities to transform their healthcare delivery systems by leveraging innovative financial arrangements as well as operational and regulatory flexibilities. 

2. The new payment model will include two options for participation: the community transformation track and the ACO transformation track. 

Community transformation track 

3. CMS will select up to 15 lead organizations for the community transformation track. A lead organization is a single entity that represents a rural community. State Medicaid agencies, offices of rural health, local public health departments, academic medical centers and others can serve as lead organizations. 

4. Lead organizations and their community partners will receive upfront cooperative agreement funding of up to $5 million. Participating hospitals will receive financial flexibilities through a predictable capitated payment amount. They will also receive operating and regulatory flexibilities, including Medicare waivers to waive cost sharing for Part B services. 

5. Lead organizations are responsible for managing cooperative agreement funding, recruiting participant hospitals, engaging the state Medicaid agency, establishing relationships with other aligned payers, convening an advisory council, and ensuring compliance with model requirements, CMS said. 

ACO transformation track

6. CMS will select up to 20 rural-focused ACOs to receive advance payments as part of joining the Medicare Shared Savings Program. The goal is to help CHART ACOs improve outcomes and quality of care for Medicare beneficiaries through value-based payment models. 

7. A CHART ACO will be able to receive a one-time upfront payment of a minimum of $200,000 plus $36 per beneficiary to participate in the five-year agreement period in the Medicare Shared Savings Program. 

8. A CHART ACO will be able to receive a prospective per beneficiary per month payment of a minimum of $8 for up to two years. 

Model timeline

9.CMS will select up to 15 rural communities to participate in the community transformation track in early 2021, and the first performance period will begin in July 2022. 

10. CMS will select up to 20 ACOs to participate in the ACO transformation track in fall 2021, and the performance period will begin in January 2022. 

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