Addressing Rural Health Inequities in Medicare
Approximately 61 million Americans live in rural Tribal, and geographically isolated communities across the United States. These communities often experience significant health inequities. Compared to urban Americans, rural Americans are more likely to have heart disease, stroke, cancer, unintentional injuries, suicide risk, and chronic lung disease, and have higher death rates from COVID-19. As clinicians, we have seen these rural health disparities first-hand. One example is a patient who lived far from a health care facility, didn’t have a usual source of care, and didn’t tell anyone about his chest pain until he had a heart attack. Another is a patient with opioid use disorder who lacked access to a nearby source of regular care and didn’t find a primary care doctor until after her first overdose. A third is a patient who required surgery on her arteries because her underlying conditions were not addressed in the rural community where she lived.
Addressing rural health inequities is a cornerstone of the Centers for Medicare & Medicaid Services’ (CMS’) effort to improve health equity. CMS defines health equity as the attainment of the highest level of health for all people, whereby every person has a fair and just opportunity to attain their optimal health regardless of their race, ethnicity, disability, sexual orientation, gender identity, socioeconomic status, preferred language, and geography—including whether they live in a rural or other underserved community. CMS’ commitment to rural health equity is reflected in the recently published CMS Framework for Advancing Health Care in Rural, Tribal, and Geographically Isolated Communities.
With almost $1 trillion in claims annually and more than 63 million covered Americans – including one in three adults who live in rural areas—Medicare has the potential to significantly impact health care delivered in rural settings. In this piece, we highlight some of CMS’ policies to support rural providers, improve access to care in rural areas, and support the transformation of the rural health delivery system.
Supporting rural providers
The shortage of health care providers in rural areas exacerbates rural health disparities. Only 12% of physicians practice in rural communities, and the majority of areas deemed “health professional shortage areas” by the federal government—61 percent—are located in rural areas. These communities also face shortages of other critical health care professionals, including nurse practitioners, dentists, and social workers. Over the last decade, many rural hospitals have closed. Many currently face potential closure due to lower or inconsistent patient volume and staff shortages, compounded by fewer job applicants in rural areas.
Rural hospitals and communities may find support under a Medicare regulation implementing a provision of the “Consolidated Appropriations Act, 2021,” creating a Rural Emergency Hospital (REH) provider type. In exchange for providing emergency department services and observation care (and, if elected by the facility, other outpatient medical and health services), Medicare will pay REHs an additional five percent compared to the normal Medicare outpatient rates for most services and will provide a monthly payment that will increase every year with inflation. The intent is that these measures will support financial stability and give rural hospitals at risk of closure another option to provide access to care in rural communities.
Rural hospitals and Critical Access Hospitals, can apply to CMS to elect to become an REH starting January 1, 2023. To qualify, hospitals must have 50 or fewer beds and agree not to provide inpatient care. CMS broadly defined the type of services that REHs can provide to maintain access to critical care in rural communities while ensuring patients can be transferred to an acute care hospital if more intensive services are needed. REHs can offer all services that can be provided in an outpatient department, such as emergency care, in addition to maternity care and outpatient surgery. REHs must also offer “observation care,” so they can observe a patient who isn’t ready to be released from an emergency department. Hospitals interested in electing this new REH designation are encouraged to review the materials at the bottom of this post.
Expanding access to care in rural areas
Telehealth is an essential tool to reach people living in rural areas, which face provider shortages and transportation challenges. As clinicians, some of us have personally delivered telehealth services and seen first-hand how it has allowed persons in rural areas to access health care from the comfort and privacy of their own homes.
However, broadband and computer access can still be significant obstacles to using telehealth in rural areas. This is why, after Congressional action, Medicare permanently expanded access to behavioral health services furnished via telehealth, including audio-only services that often just require a telephone. To further increase access for people in rural areas, CMS has proposed incentives for Medicare Advantage plans to include behavioral health clinicians who can provide telehealth services in their networks. Additionally, CMS has proposed requirements that Medicare Advantage plans assess enrolled individuals for digital health literacy. For those found to have low digital health literacy, Medicare Advantage organizations would develop and maintain procedures to offer digital health education to their enrollees to assist them with accessing telehealth.
Beyond telehealth, CMS concentrates on expanding access to behavioral health care in rural areas, including in Medicare Advantage. CMS has proposed a new requirement for evaluating the provider networks of Medicare Advantage plans, to ensure the plans’ provider networks provide sufficient access to clinical psychologists, licensed clinical social workers, and clinicians that can prescribe medication that treats opioid use disorder. This would help ensure that people enrolled in Medicare Advantage, especially in rural areas, have more accessible options for meeting their behavioral health needs. CMS also focuses on addressing opioid use disorder, particularly as overdose rates have skyrocketed and rural areas have been significantly affected. Medicare has clarified that it will pay for opioid use disorder treatment services delivered by mobile units of opioid treatment programs. These mobile units are equipped with medical supplies and specially trained staff, and studies have shown that these types of mobile services improve access to medication that treats opioid use disorder, particularly in rural areas.
Transforming the rural health delivery system
Finally, expanding access to high-quality, coordinated care through value-based arrangements will also better support the needs of rural Americans. For instance, CMS is improving the Medicare Shared Savings Program which has improved the delivery of high-quality care in rural areas. Shared Savings Program Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers collaborating to give coordinated, high-quality care to people with Medicare. The program’s goal is to ensure that people receive the right care at the right time, prioritizing their health while preventing medical errors and avoiding unnecessary and duplicative tests and treatments. However, we have seen over time that ACOs are less common in rural areas compared to urban ones.
To address this, CMS is incorporating lessons learned from the Center for Medicare and Medicaid Innovation’s ACO Investment Model into the Shared Savings Program to provide up-front investment dollars to newly-forming, smaller ACOs that treat low-income patients or patients who live in rural or other underserved areas. ACOs could use these upfront payments to hire new health care workers, such as community health workers or behavioral health practitioners, helping to address provider shortages in rural areas. ACOs could also use these funds to address the social needs of persons with Medicare, such as assisting with food, housing, or even transportation—needs that are particularly prevalent in rural areas with higher poverty rates.
In addition, the Center for Medicare and Medicaid Innovation is actively examining ways through existing and new models to improve access to high-quality health care in rural areas, including increasing participation by safety net and Medicaid providers in value-based care models.
The three-pronged approach of supporting rural providers, expanding access to care in rural areas, and transforming the rural health delivery system can improve access to high-quality, coordinated care for people in rural communities. However, the magnitude of these changes will only be realized in partnership with rural health providers, rural communities, beneficiaries, caregivers, and other payers, especially Medicaid.
We recognize that many rural providers and communities may need time to consider the new policies and programs outlined in this piece and corresponding regulations, and there are teams available to answer any questions and provide support as needed. Only by working together can we improve access to care in rural areas and advance rural health equity.
For more information about the Rural Emergency Hospital designation, which is an option for rural hospitals starting on January 1, 2023, please visit this fact sheet, the 2023 Outpatient Prospective Payment System final rule, and recently released guidance for Rural Emergency Hospital enrollment and conversion. A new REH Technical Assistance Center, funded by the Health Resources and Services Administration, can help rural hospitals exploring the REH designation. If you are interested in receiving support, please visit the Technical Assistance Center’s website here.
For more information about how to form a Medicare Shared Savings Program ACO and how to qualify for advanced investment payments starting in 2024, please review this fact sheet or the CY 2023 Physician Fee Schedule final rule, and if you have a question, please contact SharedSavingsProgram@cms.hhs.gov.
For more information about CMS proposals to strengthen Medicare Advantage, please visit the Calendar Year (CY) 2024 Medicare Advantage and Part D rule here. The comment period for the CY 2024 Medicare Advantage and Part D proposed rule is currently open and will close on February 13, 2023, at 5 PM.
 Hospital services are broadly divided into inpatient, for people who are “admitted” and spend one or more nights in a hospital to treat their health condition, and outpatient, for people who are able to receive a health care service and return home.