10 rural hospitals to test new Medicare payments for telehealth, skilled nursing

10 rural hospitals chosen to test new Medicare payments for telehealth, skilled nursing

CMS has announced the ten rural hospitals participating in Frontier Community Health Integration Project (FCHIP) demonstration to test new delivery models in sparsely-populated areas, with the goal of treating more rural Medicare beneficiaries closer to home rather than having them travel long distances for care.

The hospitals which began participating August 1 are:

• Dahl Memorial Healthcare Association in Ekalaka, Mont.
• Roosevelt Medical Center in Culbertson, Mont.
• Battle Mountain General Hospital in Battle Mountain, Nev.
• Pershing General Hospital & Nursing Home in Lovelock, Nev.
• McCone County Health Center in Circle, Nev.
• Grover C. Dils Medical Center in Caliente, Nev.
• Mt. Grant General Hospital in Hawthorne, Nev.
• Jacobson Memorial Hospital Care Center in Elgin, N.D.
• McKenzie County Healthcare Systems in Watford City, N.D.
• Southwest Healthcare Services Bowman, N.D.

The program was also open to critical access hospitals (CAHs) in Alaska and Wyoming, but CMS said none from those states applied.

As part of the demonstration, the hospitals will receive financial incentives for activities which reduce unnecessary admissions and readmissions, and encourage the participants to offer services commonly thought to be financially unviable in rural areas.

“Medicare beneficiaries who live in frontier areas of the country sometimes travel hundreds of miles to see a doctor. This increases the cost of care and can discourage beneficiaries from seeking treatment,” said Patrick Conway, M.D., CMS principal deputy administrator and chief medical officer. “The effort that is beginning today will look at ways to shrink the distance between the Medicare beneficiary and the care they need.”

New activities will be tested in three services areas. First, in skilled nursing, the demonstration will allow three of the hospitals to maintain up to 35 beds, 10 more than usual, with the additional capacity used on skilled nursing facility services.

Second, two of the chosen hospitals will have existing rules on ambulance services for CAHs waived, allowing them to be reimbursed for 101 percent of “reasonable costs” for ambulance services, regardless of whether there’s another ambulance service supplier or provider within 35 miles.

Lastly, all but one of the participants will test out a new payment system for telehealth. Instead of paying the CAH a fixed facility fee, hospitals will be reimbursed “at 101 percent of cost for overhead, salaries, fringe benefits, and the depreciation value of the telehealth equipment instead of the physician fee schedule fixed fee.” The payment for the practitioners off-site won’t change.

The federal government has emphasized telehealth in other rural-centric initiatives, like $9 million in grants made available for training to combat opioid abuse.

The demonstration is scheduled to run for three years.