1. Policy Implications for Rural Healthcare
Innovations in Rural Healthcare Environments Symposium
Brock Slabach, MPH, FACHE Senior Vice President for Member Services National Rural Health Association

2. NRHA is non-profit and non-partisan.
Improving the health of the 62 million who call rural America home.
NRHA is non-profit
and non-partisan.

3. Visit RuralHealthWeb.org for details and discounts.
Destination NRHA
Plan now to attend these upcoming events.
Annual Conference – May 10-13, 2016 • Minneapolis, MN
Rural Hospital Innovation Summit – May 10-13, 2016 • Minneapolis, MN
Quality Clinical Conference – Jul , 2016 • Oakland, CA
RHC/CAH Conference – Sept , 2016• Kansas City, MO
Policy Institute—February 6-9, 2017• Washington, DC
Visit RuralHealthWeb.org
for details and discounts.

4. A History (short) of Rural Health
War on Poverty in the 60’s
Community Health Centers, created in the War on Poverty
Rural Health Clinics –38 Years Old (1978), 4,100 nationwide
Result of PPS 1983: 440 hospital closures
Policy Response :
State Office of Rural Health (SORH
Medicare Dependent Hospitals (MDH)
Critical Access Hospital (CAH) 1997
Medicare Rural Flexibility Program (1997)
Low-Volume Hospital (LVH) Adjustment (2003 and 2010)
Patient Protection and Affordable Care Act (ACA) 2010
Medicare Access and Chip Reauthorization Act (MACRA) 2015

5. Rural Hospital Overview
Total Rural Hospitals: 1,855
1,333 Critical Access Hospitals (CAH)
522 Prospective Payment System (PPS) Hospitals (less than 100 staffed beds)
CAH: Paid on Cost Based Reimbursement (CBR)
PPS: Paid on a Diagnosis Related Group (DRG), with a prospective rate

6. NRHA Analysis of Rural Hospitals
Target solutions for three cohorts of rural hospitals:
At high-risk of closure (n=210)
At-risk of closure (n=463)
Stable with strategically sound fundamentals (n=974)
High-performers or first movers (n=208)

7. Community Outpatient Hospital
Future Model:
Community Outpatient Hospital
24/7 emergency Services
Flexibility to Meet the Needs of Your Community through Outpatient Care:
Meet Needs of Your Community through a Community Needs Assessment:
Rural Health Clinic
FFQHC look-a-like
Swing beds
No preclusions to home health, skilled nursing, infusions services observation care.
TELEHEALTH SERVICES AS REASONABLE COSTS.—For purposes of this subsection, with respect to qualified outpatient services, costs reasonably associated with having a backup physician available via a telecommunications system shall be considered reasonable costs.”.
“The amount of payment for qualified outpatient services is equal to 105 percent of the reasonable costs of providing such services.”
$50 million in wrap-around population health grants.

8. Rural Innovation
Volume to Results: A major leap

9. Transformation to Population Health Management
Novelty
Trending
Reality
2011
2013
2016

10. Sec. Burwell’s Medicare Goals
30% of Medicare provider payments in APMs by 2016
50% of Medicare provider payments in APMs by 2018
85% of Medicare fee-for-service payments to be tied to quality and value by 2016
90% of Medicare fee-for-service payments to be tied to quality and value by 2018

11. MACRA of 2015
Incentivizes movement to alternative payment models (APM) or Participate in MIPS
APMs
Patient Centered Medical Homes
Accountable Care Organizations
Bundled Payments
Episodes of Care
Yet to be Invented
Revenue Requirements
% of Physician Revenues through APMs
Receive 5% Fee Schedule Bonus
Revenue threshold increases each year

12. MACRA of 2015 Merit-based Incentive Payment System (MIPS)
Minimal FFS yearly increase next 10 years of 0.5%, then 0%
MIPS (eventually -9% to +27% adjustment)—Based on quality, resource use and clinical practice improvement activities
41% payment difference between highest and lowest performing physicians

13. Prevalence of Medicare Patients with 6 or more Chronic Conditions

14. Chronic Disease Growth Projections
Source: State of Healthcare 2010

15. What are the regulatory implications for rural healthcare design?
Aggressive review of bricks & mortar budgets
Becoming “hospital without walls”
Form follows finance: MACRA changes the finance
Delivery System Reform (DSR) flows from APMs
Increasing reliance on data analytics to improve health status
Telehealth strategies to intensify
Providers navigating the rapids of volume to value

16. THANK YOU
Brock Slabach, MPH, FACHE Senior Vice President for Member Services National Rural Health Association