Why the CMS CHART Model Will Hurt Rural Hospitals

In August 2020, the CMS Center for Medicare and Medicaid Innovation (CMMI) announced plans to implement the “Community Health Access and Rural Transformation (CHART) Model” in 15 communities. The CHART Model is supposed to “increase financial stability for rural providers” and “enhance beneficiaries’ access to health care services by ensuring rural providers remain financially sustainable for years to come.” However, the analysis in Why the CMS CHART Model Will Hurt Rural Hospitals shows that rural hospitals and the communities they serve would be harmed, not helped, by participating in the CHART Model:

Saving Rural Hospitals and Strengthening Rural Healthcare

More than 800 rural hospitals - 40% of all rural hospitals in the country - are at risk of closing in the near future. Most of these are small rural hospitals that provide not only emergency care, inpatient care, and outpatient services, but also primary care, rehabilitation, and long-term care services for their communities. Moreover, most of the hospitals are located in isolated communities where loss of the hospital could severely limit access to health care services. More than 30 million people could be directly harmed if these hospitals close, and people in all parts of the country could be affected through the impacts on workers in agriculture and other industries.

Saving Rural Hospitals and Strengthening Rural Healthcare identifies the reasons why small rural hospitals face such severe financial problems. It shows that the largest causes of losses are low payments by private health insurance plans, and that many hospitals remain open only because they receive significant supplemental funding from local taxes or state grants.

The report examines the potential effectiveness of several commonly proposed policies for rural hospitals, including:

The report describes a Patient-Centered Payment System for rural hospitals that would sustain essential healthcare services in small rural communities. This innovative approach to payment would include:

An Executive Summary of the report is also available.