Sarah Jane Tribble, KFF Health News
WASHINGTON — Nationwide, states are racing to win their share of a new $50 billion rural health fund. But helping rural hospitals, as originally envisioned, is rapidly changing into a quaint thought.
Rather, states ought to submit functions that “rebuild and reshape” how well being care is delivered in rural communities, Centers for Medicare & Medicaid Services official Abe Sutton mentioned late final month throughout a daylong assembly at Washington, D.C.’s Watergate Hotel. Simply altering the way in which authorities pays hospitals has been tried and has failed, Sutton informed the viewers of greater than 40 governors’ workplace staffers and state well being company leaders — some from as far-off as Hawaii.
“This isn’t a backfill of operating budgets,” mentioned Sutton, CMS’ innovation director. “We’ve been really clear on that.”
Rural hospitals and clinics nationwide face a looming monetary disaster, with President Donald Trump’s huge tax-and-spending regulation anticipated to slash federal Medicaid spending on well being care in rural areas by $137 billion over 10 years. Congressional Republicans added the one-time, five-year Rural Health Transformation Program as a last-minute sweetener to win the help of conservative holdouts who nervous in regards to the invoice’s monetary fallout for rural hospitals.
Yet, the phrases utilized by CMS Administrator Mehmet Oz and his company’s leaders to explain the brand new pot of money are producing stress between legacy hospital and clinic suppliers and new technology-focused corporations stepping in to supply new methods to ship well being care.
It’s “what I would call incumbents versus insurgents in the rural space,” mentioned Kody Kinsley, a senior coverage adviser on the Institute for Policy Solutions on the Johns Hopkins School of Nursing.
Applications are due Nov. 5. The cash will likely be awarded to states by the tip of the 12 months and distributed over 5 years.
Half of the $50 billion will likely be divided equally amongst all states with an permitted utility; the opposite half will go to states that win factors. Of the second half, $12.5 billion will likely be allotted based mostly on a components that calculates every state’s rurality. The remaining $12.5 billion will go to states that score well on initiatives and insurance policies that mirror the Trump administration’s “Make America Healthy Again” targets.
The application identifies particular coverage objectives akin to implementing the Presidential Fitness Test and restrictions to meals help, in addition to broader funding methods round distant care companies, information infrastructure, and consumer-facing know-how instruments, which CMS recognized as “symptom checkers and AI chatbots.”
In September, after CMS officers launched the applying, Republican members of Congress from states with Democratic governors called for fairness, involved their states would possibly direct the cash to city areas. In a letter to Oz and Health and Human Services Secretary Robert F. Kennedy Jr., they mentioned the cash “will serve as a lifeline for rural and at-risk hospitals in our communities that are already struggling to keep their doors open.”
Smaller hospitals worry they are going to get “a tiny little slice” of every state’s share, mentioned Emily Felder, who leads the well being care apply at Brownstein Hyatt Farber Schreck, a regulation agency whose shoppers embody rural hospital programs.
“There’s a lot of frustration,” Felder mentioned.
But Kinsley, who was beforehand North Carolina’s secretary of well being and human companies, mentioned utilizing this cash solely to shore up a stability sheet “is really just throwing good money after bad.” In distinction, he mentioned, insurgents akin to technology-driven startups can supply new methods.
One of these corporations vying for funding is Homeward Health, a Silicon Valley-based firm that contracts with Medicare managed care insurers. Using synthetic intelligence analytics, Homeward helps sufferers get care of their dwelling and with native suppliers.
The firm manages the well being of 100,000 rural Michigan sufferers enrolled in insurance coverage, mentioned Homeward co-founder and chief government Jennifer Schneider. The firm was a sponsor for the Watergate summit. It additionally has ongoing conferences with Oz and his group, Schneider mentioned.
“They’re doing their job, and they’re talking to a lot of people in the ecosystem and really eager to learn from those of us that have been in the system,” Schneider mentioned. “We’re one of many in that position.”
KFF Health News requested an interview with Alina Czekai, director of the newly created Office of Rural Health Transformation. CMS spokesperson Alexx Pons mentioned the company was “unable to accommodate facilitation of any interview.”
Instead, CMS supplied an emailed assertion from Oz saying this system “will help states and communities reimagine what’s possible for rural healthcare.”
Brock Slabach, chief operations officer of the National Rural Health Association, the biggest group representing rural hospitals and clinics, mentioned the cash would greatest be used to assist pay for transformation that isn’t “sexy” or “revolutionary.”
“If what we end up with is we have a wearable for every rural patient, I don’t think that’s transformational,” Slabach mentioned, referring to digital well being screens akin to fitness-tracking watches.
Slabach, a onetime small-hospital chief government and an unofficial adviser to lots of of rural services nationwide, named a number of concepts for the cash — together with paying for capital enhancements akin to digital well being data or tools, mortgage reimbursement applications to help workforce improvement, and creating “SWAT” groups that rescue rural hospitals getting ready to closure.
More than 150 rural hospitals have closed nationwide since 2010 — a statistic cited by CMS’ Sutton that’s well-known amongst business watchers. The Sheps Center on the University of North Carolina, which compiles the closure information, additionally launched a guide to assist states calculate how rural they’re for his or her functions.
State functions will likely be reviewed by a panel, with some reviewers from inside the authorities however others exterior it, mentioned Kate Sapra, appearing deputy director of the Office of Rural Health Transformation, talking on the Watergate.
“We will train them in the scoring criteria,” Sapra mentioned, including that the panelists is not going to be coming from “your state” and might want to fill out conflict-of-interest varieties. A portion of cash every state will get will likely be reevaluated yearly based mostly on the progress it makes on its objectives and priorities, according to CMS.
States are creating stakeholder teams, asking for public remark, and dealing with their well being companies. Some, akin to Mississippi and New Mexico, are hiring consultants.
In Montana, a set of well being suppliers and associations proposed an inventory of concepts for the money, together with making a mortgage reimbursement fund for rural clinicians to attempt to ease employee shortages.
“It’s one-time money, and it’s a little bit of money,” mentioned David Mark, a health care provider who’s the CEO of One Health, which has clinics dotted throughout japanese Montana and Wyoming. A state might obtain a minimal of $100 million a 12 months for 5 years if all 50 states have functions permitted.
“How do you accomplish goals of a health care system transformation with an infusion of money like that?” Mark mentioned.
Neither Montana nor Wyoming — huge, rural states — despatched leaders to the Watergate summit, in accordance with a duplicate of the attendees checklist. In the afternoon, attendees might rotate amongst planning tables and meet with company sponsors such because the digital well being data behemoth Epic and the emergency companies firm Global Medical Response.
Wyoming Department of Health Deputy Director Franz Fuchs confirmed his state didn’t ship representatives to the occasion, as a result of they have been “stretched with other commitments.” Montana, Wyoming, and different states submitted an optional letter of intent signaling they are going to apply for the funds. CMS didn’t reply to questions on what number of and which states have submitted letters.
During the Watergate occasion, hints of brewing competitors amongst states started to floor.
“I think Arkansas’ application is going to be better than yours,” seasoned political adviser Jack Sisson mentioned with a smile throughout a morning panel.
The viewers laughed. Sisson, who just lately left his job as well being adviser for Arkansas Gov. Sarah Sanders, had interrupted Michael Hendrix, coverage adviser to a different Republican governor, Tennessee’s Bill Lee.
“See, this is the kind of friendly competition that CMS is hoping for,” Hendrix mentioned. He grinned, thanked Sisson, and added, “I look forward to us both winning.”
KFF Health News Montana correspondent Katheryn Houghton contributed to this report.