Remarks by Administrator Seema Verma at the National Rural Health Association Annual Conference
(As prepared for delivery – May 8, 2019)
Thank you, Tim for that kind introduction. I’m excited to be here. I must admit when I first heard the conference was in Atlanta, my initial reaction was, “Atlanta, that’s not rural!” On a more serious note, I would like to thank the National Rural Health Association and all of you…for your hard work and commitment… to improving healthcare in rural America. Our Administration shares that commitment and our Rethinking Rural Health Initiative is a key strategic focus at CMS. We apply a rural lens to CMS programs and policies to lower costs, ensure access and improve quality of care for rural Americans.
Being here today reminds me of when I visited the National Rural Health Association Headquarters in Kansas City and Coalinga Regional Medical Center in Modesto. During those trip and others, I had the opportunity to visit rural health centers and drive through many rural and frontier areas, which brings home the issues of rural health.
What strikes me most is that many of these communities are very isolated – whether separated by miles of flat land or miles of mountains. I’d ask myself…What would I do if I suddenly had a medical emergency or if I was traveling with a pregnant woman in labor? Help or a hospital wouldn’t be a heartbeat away. It would be many heart pounding miles away. For a person fighting cancer – their battle might include driving through mountains and crossing rivers to get treatment – maybe twice or three times a week.
Geographic isolation is one of the many unique obstacles rural Americans face when it comes to healthcare. Rural communities have disproportionately higher poverty rates and more chronic conditions, and are more likely to be uninsured or underinsured.
Among the five leading causes of preventable death, the rates are much higher in rural communities compared to urban communities - and the gap is getting wider. 43% of heart disease deaths in rural areas are preventable compared to nearly 30% in urban areas.
Meanwhile, rural healthcare systems are often trying to serve communities with an overworked and shrinking healthcare workforce.
Due to the financial pressures and changing demographics, rural hospitals across the country have been closing down, eliminating essential services, reorganizing, and transitioning to new types of facilities. Since 2010, more than 100 rural hospitals have closed their doors and nearly 40% of rural hospitals are in the red. Rural areas even have fewer primary care doctors than urban areas.
I know I’m painting a bleak picture here, one you live every day, but there are many positive examples of resiliency and creativity. Rural providers and communities across the nation are developing tailored, innovative approaches to transform care delivery to better serve their populations.
Take for example, West Virginia University Medicine. We all know West Virginia is predominantly rural and has historically poor health outcomes related to heart disease, cancer and substance abuse disorders. To improve overall population health within the state, WVUM began transforming their reach to communities across the state by leveraging three key strategies. They established connectivity across the system to give providers real-time data about their patients; focused on population heath by establishing home monitoring systems to reduce readmissions; and expanded access to the highest quality of care. For example, they used telemedicine to provide access to world class specialty services for cancer and Alzheimer patients, allowing them to receive care closer to home.
Another example is Lakin County, Kansas. Women were losing access to maternal health services as obstetric units were closing in surrounding hospitals. Kearny County Hospital implemented several strategies to improve access to care, including partnering with the University Of Kansas School Of Medicine. The partnership helped local doctors provide better care for high-risk pregnancies, and created virtual support programs for pregnant and postpartum women.
Maternal health is a growing concern in this country. About 700 women die each year in the U.S. due to pregnancy or delivery complications. Just yesterday CDC issued a report saying 60% of these deaths are preventable. The death rate is higher for rural women. This is particularly concerning to me… because early in my career, I worked on a healthy babies program and here we are….decades later….dealing with the same challenges…some of which, have gotten worse. Statistics show that pregnancy-related mortality deaths have almost doubled in the last 30 years.
In my first year at CMS, I read a Washington Post article about dwindling maternal health services in rural areas. The story featured a brave woman - Clare Shirley - and her incredible delivery of a healthy baby girl. Clare lived two hours from the hospital where she planned to give birth, but when she went into labor, her doctor and the EMTs agreed that she couldn’t make the two hour drive. Instead, she delivered her daughter at a nearby community health center. She was lucky, but other women have not been so fortunate.
We can help reverse that trend by ensuring women in rural areas, and all women, have better access to maternal health. At CMS, we have a role to play because we pay for nearly half of the births in this country. In fact this afternoon, I’ll be meeting with Dr. Redfield at the CDC to discuss this issue.
Additionally, on June 12, CMS is hosting a Maternal Health Forum in collaboration with NRHA. We are exploring every lever to improve maternal health outcomes and I hope you will join us for this important discussion.
Another important discussion we’ve been having is on the issue of prescription drug costs. We are working across the agency to strengthen our healthcare system, and I am proud to announce that this morning, CMS finalized a policy to bring much-needed pricing transparency to the market for prescription drugs. You have heard me say this before – patients have the right to know the prices of healthcare services. At CMS, we are serious about empowering patients with pricing information across-the-board. Today’s policy will require pharmaceutical companies to disclose list prices in television ads for prescription drugs. This is an important step toward achieving President Trump’s vision for lowering prescription drug prices. We are not wasting any time – the new policy will go into effect in sixty days. And specifically, companies will be required to disclose prices in TV ads for all prescription drugs with prices above $35 for a month’s supply or a usual course of therapy.
List prices matter; patients’ coinsurance payments are typically calculated as a percentage of a drug’s list price, as is the case in Medicare Part D, and patients who are uninsured or who are in high-deductible plans often have to pay a drug’s full list price. By equipping patients with information on price, patients and their doctors will be able to make informed decisions and demand value from pharmaceutical companies. Today’s policy shines a light into the convoluted world of drug pricing so that everyone will know both when list prices go up, and also when they go down. Pharmaceutical companies will now have to compete on price.
In addition to our significant focus on drug pricing, rethinking rural health is a vital part of CMS’s push to transform the healthcare delivery system to bring high quality, and accessible healthcare to all Americans.
The Trump Administration has placed an unprecedented priority on improving the health of Americans living in rural areas. The Secretary echoed that sentiment when he spoke to you earlier this year. And CMS has furthered this commitment by introducing the first ever Rural Health Strategy. The goals of our Rethinking Rural Health Initiative are to develop programs and policies that ensure rural Americans have access to high quality care, support rural providers and not disadvantage them, address the unique economics of providing healthcare in rural America, and reduce unnecessary burdens in a stretched system to advance our commitment to improving health outcomes for Americans living in rural areas.
One way we have focused on results is through quality measures. Our Quality Payment Program, or QPP, provides support for small, underserved, and rural practices…helping them actively participate in the program. In 2018, CMS added flexibilities for clinicians in small practices to reduce provider burden. As a result of this tailored support, 94% of eligible rural clinicians participated in the QPP program. And 93% of them received a positive payment adjustment - a testament to the high quality care being delivered in rural practices.
Beyond quality measures, we are continuously learning from successes and innovations in other rural communities. I am excited about the possibilities that telehealth can bring and its ability to transform healthcare.
We are advancing new telehealth payment policies across the board to cover more services, including allowing Medicare beneficiaries to receive home dialysis with certain telehealth technology and covering telehealth services provided by mobile stroke units. We also supported in-home monitoring and the remote sharing of information by reimbursing clinicians for virtual check-ins. Similarly, CMS now pays Rural Health Clinics and Federally Qualified Health Centers for virtual check-ins.
We also announced greater flexibility for Medicare Advantage plans to offer innovative telehealth services as part of their basic benefit to improve access and quality of care.
For Medicaid, CMS is working with states to advance telehealth and improve rural health outcomes. This fall, CMS will communicate Medicare telehealth policies to State Medicaid Directors to ensure awareness of opportunities to apply similar approaches in their State.
Telehealth requires an underlying system. And so we’re also working with the FCC to accelerate the expansion of broadband capabilities to support telehealth technology in rural communities. We’ve listened to rural stakeholders asking CMS to do more to expand telehealth. We’ve heard the public outcry– and we delivered.
But rural health isn’t solved with technology alone. We have also heard concerns that the current wage index system perpetuates disparities in reimbursement across the country. Hospitals that pay higher wages receive a higher Medicare reimbursement, and therefore, can afford to pay their staff more. Conversely, low wage index hospitals often cannot afford to pay wages that would allow them to climb to a higher wage index.
Over time, this increases the disparity in payments. For example, a hospital in rural Alabama could receive a Medicare payment of about $4000 for treating a beneficiary admitted for pneumonia, while their urban counterpart would receive nearly $6000 for the same case! All due to differences in the Medicare wage index.
To address this concern, last month, CMS issued a proposed rule to increase reimbursement to rural hospitals that would allow them to improve quality, attract more talent, and expand patient access. We are considering several policy options with different impacts, and we look forward to your input.
We also know that some of our regulations result in unnecessary burdens for rural providers. Over the last year, our regional office staff have traveled to rural areas and we have held listening sessions with rural providers, patient groups, academic experts and health plans as part of our Patients Over Paperwork initiative. We are hosting another session this afternoon at 4:30. The feedback has been so valuable and I thank those of you in the audience who have been a part of those conversations.
Understanding that rural providers face unique workforce shortage issues, we are applying a rural lens on our policies governing physician supervision to give rural providers the flexibility they need to ensure that patients have access to care, and you will see more from us on this issue.
Technology and payment reform are only part of the solution.
Another core part of our strategy focuses on the transformation of rural care delivery, where a hospital-based, centralized system may no longer be the best option. Systems built on fee-for-service payments are especially problematic in rural areas where small populations don’t support a volume-based infrastructure. Some closed hospitals are being converted to other types of care – such as urgent care centers and outpatient facilities. Communities are refocusing their resources and exploring new models to produce better quality care.
Value-based payment models have accelerated nationally, but rural providers have been slow to adopt these models. The technical support and administrative infrastructure necessary to participate in alternative payment structures is often a barrier. So, CMS is expanding value-based payment arrangements that cater to the unique needs of rural communities.
We recently announced the new CMS Primary Cares Initiative, which offers 2 pathways—Primary Care First and Direct Contracting—and five voluntary model options to test how we pay for primary care.
We are currently gathering public feedback on the geographic option of Direct Contracting, which is designed to allow innovative organizations to take responsibility for the total cost of care and health needs of a population in a defined region. Driving accountability to a local level empowers communities to devise strategies to meet their unique needs. We are seeking public comment through a new Request for Information and welcome your insights on how to ensure the geographic Option of Direct Contracting works for rural areas.
In addition, I am very proud to announce that CMS is developing a new innovative model specific to rural communities that will come out later this year. We understand that transformation of rural health requires local collaboration. The new model will offer a pathway for stakeholder coalitions of providers, purchasers, and payers to invest collectively in increasing access and improving healthcare delivery.
Participating communities will be able to design a customized system that aligns to the priorities and needs of their community because we know that a “one-size-fits-all” approach doesn’t work and local communities know what works best for them. We are considering adding seed funding to support communities in developing a system of care – whether it’s a hub-and-spoke approach with telehealth or a plan to realign hospitals.
As part of those efforts, communities will be required to consider value based payment approaches. Transformation will also require transitioning rural providers to take on meaningful risk for cost and outcomes through alternative payment models. The new model will provide numerous options to put regions and communities in the driver seat – from leveraging ACOS to the primary care models we have today – value based reimbursement will allow rural providers to focus on their local health needs such as maternal health, chronic disease and substance use disorders to drive better outcomes.
We recognize that transformation takes time and resources. The new model will give rural regions technical assistance and support as they figure out the path that will work best for them, such as modernizing infrastructure and utilizing technology to provide financial stability and sustainability. Be on the lookout for more details later this year! But, I mention this now… so you know it is coming…and start thinking about potential partners.
Developing a long-term strategy for improving rural health and making it more sustainable is a key priority for CMS. We are pushing ourselves to think more consistently and creatively about how to provide rural areas with the flexibility, resources, and innovative tools they need to transform their health care systems to deliver higher quality and more accessible services.
I’ve highlighted just a few of the ways that the Trump Administration and CMS are working towards that goal. CMS is committed to our Rethinking Rural Health Initiative and while we have undertaken a number of steps, we know there is more to be done. We do not have all the answers, sitting in our bureaucratic bubble in Washington D.C. We know that each rural community is unique - rural Vermont is not the same as rural Texas, Montana or Alaska. We need the input of folks like you, who are in the field every day, dealing with these challenges, about how we can support rural providers by reducing burden and addressing the unique economics of providing healthcare in rural America to ensure rural Americans have access to high quality care that improves health outcomes. Thank you!