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Analysis

Eight More Hospitals Join PA's Rural Health Model

By John Commins  
   December 27, 2019

The Rural Health Model, the first of its kind, creates an alternative payment model that transitions hospitals from fee-for-service to global budget payments.

Eight more hospitals and one payer have joined a Pennsylvania initiative to shore up the financial footing of the state's rural hospitals.

"I am especially pleased to see more hospitals joining this important initiative to improve their financial viability so that every Pennsylvanian has access to quality health care within a reasonable distance from home," Gov. Tom Wolf said in a media release.

State officials the program is needed because nearly half of all rural hospitals in Pennsylvania are operating with negative margins and are at risk of closure. Four rural hospitals in Pennsylvania have shuttered since 2006, according to the North Carolina Rural Health Research Program.

So far this year, 19 rural hospitals across the nation have closed, making 2019 the worst year for rural hospital closures since at least 2005.

The Rural Health Model, the first of its kind, creates an alternative payment model that transitions hospitals from fee-for-service to global budget payments. Those global payments come from several payers, including private and public insurers.

Instead of getting paid for admissions, hospitals in the model will get a preset amount of money to provide services in the community.

State officials say the new payment model allows hospitals time to transform care to better meet the health needs of the community. This includes providing nontraditional roles, such as providing transportation and broadband internet access.

The eight hospitals are:

• Armstrong County Memorial Hospital in Kittanning.

• Chan Soon-Shiong Medical Center at Windber in Somerset County.

• Fulton County Medical Center in McConnellsburg.

• Greene Hospital in Waynesburg, Greene County.

• Monongahela Valley Hospital in Monongahela, Washington County.

• Punxsutawney Area Hospital in Punxsutawney, Jefferson County.

• Tyrone Hospital in Tyrone, Blair County.

• Washington Hospital in Washington, Washington County

A total of 67 hospitals are eligible for model based and nearly 20% of them will participate in in 2020, state officials said.

In addition, Aetna will join five other private payers  – Gateway, Geisinger, Highmark, Medicare and UPMC – which combine make up nearly half of the individual and small group market insurance population in the state.

The program is funded and administered by the newly created Rural Health Redesign Center Authority and the Pennsylvania Rural Health Redesign Center Fund.

In addition to providing access to care for rural communities, state officials say the model will ensure that, by remaining open, rural hospitals continue to be a vital economic driver for their communities.  

"The Rural Health Model is a transformative step that changes the financial model for hospitals in rural areas," said Pennsylvania Secretary of Health Rachel Levine, MD. "This is a step that will help achieve financial stability for these facilities and aims to improve the overall health of the community."

“This is a step that will help achieve financial stability for these facilities and aims to improve the overall health of the community.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

The Rural Health Model creates an alternative payment model that transitions hospitals from fee-for-service to global budget payments.

Instead of getting paid for admissions, hospitals in the model will get a preset amount of money to provide services in the community.

State officials say the new payment model allows hospitals time to transform care to better meet the health needs of the community.


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