CMS announces a new value-based payment model for rural healthcare providers


The Centers for Medicare and Medicaid Services today announced a new value-based payment model for rural healthcare providers. The Community Health Access and Rural Transformation (CHART) Model ties payment to value, increases choice and lowers costs for patients, CMS said.

CHART will provide support through new seed funding and payment structures, operational and regulatory flexibilities and technical and learning support.


Providers interested in the CHART Model have two options for participation: the Community Transformation Track and the Accountable Care Organization Transformation Track.

The Trump Administration is investing up to $75 million in seed money to allow up to 15 rural communities to participate in the Community Transformation Track. The investment allows for the implementation of care delivery reform, provides predictable capitated payments and offers operational and regulatory flexibilities.

Through these flexibilities, providers can pursue care transformation such as expanding telehealth to allow the beneficiary’s place of residence to be an originating site and waiving certain 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 model also allows participant hospitals to waive cost-sharing for certain Part B services and provide transportation support.

In September, CMS will select up to 15 rural communities to participate in this track, with the winners being announced in early 2021 and the model starting in the summer of 2021.

The Accountable Care Organization Transformation Track offers an upfront investment. It builds on the success of the ACO Investment Model (AIM), which saved $382 million over three years, CMS said.

Providers participating in the ACO Transformation Track will enter into two-sided risk arrangements as part of the Medicare Shared Savings Program and may use all waivers that are available in the MSSP program.

CMS anticipates releasing a request for applications in the spring of 2021 and selecting up to 20 rural ACOs to participate in this track starting in January 2022.


Americans living in rural areas have worse health outcomes and higher rates of preventable diseases than the over 57 million Americans living in urban areas, CMS said.

Impediments such as transportation challenges disproportionately impact rural Americans and their access to care. Rural providers experience healthcare workforce shortages and operate on thin margins. Over 126 rural hospitals have closed since 2010.

The percent of hospitals with negative operating margins is between 44-52%. Many rural hospitals also have difficulty recruiting and retaining medical professionals.

For these and other reasons, rural providers have been slow to adopt national value-based payment models.


The Community Health Access and Rural Transformation Model delivers on President Trump’s Executive Order from last week on Improving Rural Health and Telehealth Access as well as the President’s Medicare Executive Order and CMS’s Rethinking Rural Health initiative.

CMS took steps in the 2021 Physician Fee Schedule Proposed Rule published on August 4 to extend the availability of certain telemedicine services after the COVID-19 public health emergency ends.

CMS has also increased the wage index for low wage index hospitals, including many rural hospitals. The agency has reduced the minimum required level of supervision for hospital outpatient therapeutic services furnished by all Critical Access Hospitals from direct supervision to general supervision, allowing procedures to be furnished under the physician’s overall direction and control but without his presence.


“The Trump Administration has placed an unprecedented priority on improving the health of the one in five Americans who live in rural areas,” said CMS Administrator Seema Verma. “The CHART Model represents our next opportunity to make investments that will transform the rural healthcare system, allowing us to use every lever to support all Americans getting access to high-quality care where they live.”

Clif Gaus, president and CEO of the National Association of ACOs welcomed the alternative payment model for rural providers.

“The ACO Transformation Track offers resource-deprived rural providers a helping hand to invest in the tools needed to build accountable care models, including health IT, data analytics and care managers,” Gaus said. “NAACOS has for the last couple of years encouraged CMS to restart the ACO Investment Model, on which today’s ACO Transformation Track is based.

Another way to support rural providers in ACOs would be for CMS to address a flaw in how CMS sets ACO spending targets, or benchmarks, to ensure rural ACOs are not disadvantaged compared to other ACOs, Gaus said. This is often referred to as the “rural glitch.”

NAACOS calls on CMS to continue expanding the progress of ACOs by allowing new ACOs to join the Medicare Shared Savings Program in 2021. Earlier this year the agency canceled a new 2021 MSSP ACO class due to challenges with the ongoing COVID-19 pandemic.