Capitol Correspondence - 08.18.20

Big Picture: CMS Releases New Rural Funding Model

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While the two pilot funding programs described below do not cover Medicaid supports for people with intellectual / developmental disabilities (I/DD), they do seek to address issues that are particularly relevant to the I/DD community. Readers could find monitoring these programs’ developments and results informative when trying to address challenges facing people with I/DD in rural areas.

“Today, the Centers for Medicare & Medicaid Services (CMS) Innovation Center is announcing a new Model, the Community Health Access and Rural Transformation (CHART) Model (or the “Model”).

The approximately 57 million Americans living in rural communities, including millions of Medicare and Medicaid beneficiaries, face unique challenges when seeking healthcare services, such as limited transportation options, shortages of health care services, and an inability to fully benefit from technological and care-delivery innovations. These challenges result in rural Americans facing worse health outcomes and higher rates of preventable diseases than those living in urban areas.

Through the CHART Model, CMS aims to continue addressing these disparities by providing a way for rural communities to transform their health care delivery systems by leveraging innovative financial arrangements as well as operational and regulatory flexibilities.

The Model aims to:

  • Increase financial stability for rural providers through the use of new ways of reimbursing providers that provide up-front investments and predictable, capitated payments that pay for quality and patient outcomes;
  • Remove regulatory burden by providing waivers that increase operational and regulatory flexibility for rural providers; and
  • Enhance beneficiaries’ access to health care services by ensuring rural providers remain financially sustainable for years to come and can offer additional services such as those that address social determinants of health including food and housing.

To achieve these goals, the CHART Model will test whether upfront investments, predictable capitated payments, and operational and regulatory flexibilities will enable rural health care providers to improve access to high quality care while reducing health care costs.

Rural Health Transformation and Innovation

CMS is providing funding for rural communities to build systems of care through a Community Transformation Track and is enabling providers to participate in value-based payment models where they are paid for quality and outcomes, instead of volume, through an Accountable Care Organizations (ACO) Transformation Track.

1. Community Transformation Track


CMS will select up to 15 Lead Organizations for this track. A Lead Organization is a single entity that represents a rural Community, comprised of either (a) a single county or census tract or (b) a set of contiguous or non-contiguous counties or census tracts. Each county or census tract must be classified as rural, as defined by the Federal Office of Rural Health Policy’s list of eligible counties and census tracts used for its grant programs.1 Examples of entities eligible to serve as Lead Organizations include, but are not limited to, state Medicaid agencies, State Offices of Rural Health, local public health departments, Independent Practice Associations, and Academic Medical Centers.

Lead Organizations will be responsible for working closely with key model participants (e.g., including Participant Hospitals and the state Medicaid agency) and driving health care delivery system redesign by leading the development and implementation of Transformation Plans with their community partners. The Transformation Plan is a detailed description that outlines the community’s plan to implement health care delivery redesign strategy.

Funding & Flexibilities

Lead Organizations and their community partners will receive upfront cooperative agreement funding, financial flexibilities through a predictable capitated payment amount (CPA) for Participant Hospitals in a community, and operational and regulatory flexibilities.

  • Upfront Funding – Lead Organizations will receive cooperative agreements of up to $5 million. CMS will make up to $2 million available upon acceptance into the CHART Model with the rest of the funding available as communities progress through the model.
  • Financial Flexibilities – The CPA is a prospectively set annual payment for Participant Hospitals. It provides rural hospitals with a stable revenue stream and creates incentives to reduce both fixed costs and avoidable utilization.
  • Operational and Regulatory Flexibilities – Medicare waivers to allow participant hospitals to waive cost sharing for Part B services, provide beneficiaries with transportation, and offer gift card rewards and incentives for Chronic Disease Management Programs. Benefit enhancements include:
  • Waiver of requirement for a 3-day inpatient stay prior to admission to a Skilled Nursing Facility (SNF)
  • Telehealth Expansion (continued post-COVID-19)
  • Post-Discharge Home Visits
  • Care Management Home Visits
  • CAH 96 Hour Rule
  • Waiver of Medicare hospital conditions of participation to allow a rural outpatient department and emergency room to be paid as if they were classified as a hospital


The 15 Community Lead Organizations are critical to the success of the Model because they will coordinate efforts across the community to ensure that access to care is maintained and that the needs of various stakeholders are understood and accounted for in the transformation plan. Lead Organizations are responsible for managing cooperative agreement funding, recruiting Participant Hospitals, engaging the state Medicaid agency, establishing relationships with other aligned payers, convening the Advisory Council, and ensuring compliance with Model requirements. Ultimately, the Lead Organization will oversee the execution and coordination of a Transformation Plan that outlines the health care delivery redesign strategy for the Community.

Each community partner has responsibilities in the Model:

  • A Participant Hospital must be an acute care hospital, Critical Access Hospital, or special rural designation hospital that signs a Participation Agreement with CMS and commits to implement the Model as outlined in Transformation Plan.
  • The state Medicaid agency is a required partner to ensure Medicaid alignment with the CPA. Medicaid alignment may be achieved through alignment of Medicaid Fee for Service, Medicaid managed care plans, or both. To ensure that the state Medicaid agency has the capacity to carry out CHART Model requirements, it must be a sub-recipient of cooperative agreement funding.
  • The Advisory Council will advise on activities including, but not limited to, developing and updating Transformation Plans, assisting with hospital and payer recruitment, monitoring the progress of the Model, and identifying any necessary changes.

2. ACO Transformation Track


CMS will select up to 20 rural-focused ACOs to receive advanced payments as part of joining the Medicare Shared Savings Program (Shared Savings Program). Building on the success of the ACO Investment Model (AIM), the advanced shared savings payments are expected to help CHART ACOs engage in value-based payment efforts that will improve outcomes and quality of care for rural beneficiaries.  A majority of ACO providers/suppliers of the CHART ACO must be located within rural counties or census tracts as defined by FORHP. 1

Funding & Flexibilities

CMS will offer CHART ACOs advanced shared savings payments comprised of two components:

  1. A CHART ACO will be able to receive a one-time upfront payment equal to a minimum of $200,000 plus $36 per beneficiary to participate in the 5-year agreement period in the Shared Savings Program.
  2. A CHART ACO will be able to receive a prospective per beneficiary per month (PBPM) payment equal to a minimum of $8 for up to 24 months.

The amount for the upfront payment and the PBPM will vary based on the level of risk that the CHART ACO accepts in the Shared Savings Program and the number of rural beneficiaries assigned to it based on the Shared Savings Program assignment methodology, up to a maximum of 10,000 beneficiaries.

ACOs participating in this Track may use benefit enhancements available in the Medicare Shared Savings Program, which include:

  • Waiver of requirement for a 3-day inpatient stay prior to admission to a Skilled Nursing Facility (SNF)
  • Telehealth Expansion (continued post-COVID-19)
  • Beneficiary Incentive Program


The CHART ACO will enter into participation agreements with CMS to participate in both the Shared Savings Program and the CHART Model and, for the full duration of the agreement period, meet the requirement that a majority of its ACO providers and suppliers are located within rural counties or census tracts.

Model Timeline

CMS anticipates the Notice of Funding Opportunity (NOFO) for the Community Transformation Track will be available in September on the Model website. The Request for Application (RFA) for the ACO Transformation Track will be available in early 2021 on the Model website.

Additional Information

For more information on the CHART Model, visit the CHART website.

The forthcoming NOFO and RFA will contain detailed information to assist interested applicants.”