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Confronting Rural America’s Health Care Crisis

Executive Summary

The rapid spread of the new coronavirus has awakened the nation to the dire access problems that have long plagued rural communities and has underscored the need for immediate change. The COVID-19 pandemic has highlighted the fragility of the rural health care system, in which hundreds of hospitals have already closed or are in imminent risk of folding. The pandemic now threatens to heap additional financial pressures onto these hospitals, leaving millions in fear that they won’t receive care.

COVID-19 prompted a flurry of legislative and regulatory action in early 2020, marking the first important steps in addressing access to care through telehealth. Some of these actions align with recommendations in this report. However, these measures were generally limited to temporary fixes, while the problems need long-term attention.

The Bipartisan Policy Center’s Rural Health Task Force has developed recommendations over the last year to stabilize and improve the urgent problems challenging rural communities and to do it permanently. Launched in June 2019, the task force consists of health care experts, business leaders, physicians, and former elected officials. The aim was to produce policy recommendations to stabilize and transform rural health infrastructure, promote the uptake of value-based and virtual care, and ensure access to local providers.

The recommendations in this report are the product of extensive outreach, including roundtable discussions with experts and stakeholders, public comments, and multiple site visits in Iowa, Maine, Vermont, Wisconsin, Tennessee, and New Hampshire.

Even before coronavirus struck, rural Americans experienced significant gaps in care and a unique set of circumstances. They often must travel long distances to see a doctor or visit the emergency room. Rural communities struggle to recruit and retain health care providers and many areas aren’t equipped with broadband. This makes it difficult for residents to make use of telehealth and virtual care technologies.

The rural population is older, sicker, and less likely to be insured or seek preventive services. According to the Centers for Disease Control and Prevention, this population is more likely than their urban counterparts to experience potentially preventable death from five leading causes: heart disease, cancer, unintentional injuries, chronic lower respiratory disease, and stroke.iii Maternal and infant mortality rates are also on the rise in these areas.

The steady stream of recent hospital closures launched rural health care into the national spotlight; COVID-19 has only drawn further attention to the plight of these hospitals and communities. Since January 2010, 126 rural hospitals have closed, and an additional 557 are currently at risk.iv Of the rural hospitals that closed from 2005 through 2017, 43% were more than 15 miles away from the next closest hospital and 15% were more than 20 miles away. According to the Government Accountability Office, rural residents delay or neglect to seek care if they have to travel longer distances to access services after a local hospital has closed. This is particularly problematic for those who are geographically isolated, elderly, or low income.

The loss of a hospital in remote areas may lead to a decline in the number of local providers and reduced access to critical and specialist services, including obstetric and maternal care. Local economies are also significantly impacted. On average, the health sector makes up 14% of employment in rural communities, with hospitals typically being among the largest employers. The average Critical Access Hospital, or CAH, employs 127 people with an annual payroll of $6 million.vii Other data show that hospitals in larger rural communities have an average of 520 employees, while those located in smaller, more isolated areas employ an average of 138 staff.

In March 2020, as coronavirus evolved into a pandemic, Congress voted to temporarily waive telehealth requirements for Medicare providers, allowing the Centers for Medicare and Medicaid Services, or CMS, to reimburse clinicians for telehealth visits with patients at home in an area with a designated emergency. The Trump administration has built on this effort and temporarily expanded access to care by providing regulatory flexibility around the use of telehealth for all Medicare beneficiaries. The flexibilities that have been utilized to address this public health emergency highlight opportunities for permanent improvements to rural health care access.

In addition to addressing telehealth, the task force recommendations include short-term stabilization for struggling rural hospitals and multiple pathways to transform into models that are customized to meet the needs of individual communities. For example, following a comprehensive community needs assessment, a hospital might transform into a stand-alone emergency department with new outpatient capacity. A community that lost its hospital might see a new emergency department as part of its existing Federally Qualified Health Center, or FQHC.

The report also includes recommendations for enhanced payments to keep obstetric units open, and tax credits to encourage physicians and advanced practice clinicians, or physician assistants and nurse practitioners, to stay in rural communities.

The task force’s proposals build on BPC’s 2018 report, Reinventing Rural Health Care: A Case Study of Seven Upper Midwest States. That report described the 10 challenges of rural health care access and delivery, and highlighted opportunities for improvement, including:

  • Rightsizing Health Care Services to Fit Community Needs: In order for communities to build tailored delivery services, policies need to be flexible and not just have a one-size-fits-all approach.
  • Creating Rural Funding Mechanisms: Funding mechanisms and payment models should reflect the specific challenges that rural areas face, such as small population size and high operating costs per unit of service.
  • Building and Supporting the Primary Care Physician Workforce: With the appropriate services and funding, rural communities can build a health care workforce that suits their needs.
  • Expanding Telemedicine Services: As workforce models change, rural health professionals should be equipped with the tools necessary to provide quality care to patients.

Understandably, rural health care has emerged as an important issue going into the 2020 presidential and congressional elections. According to a poll by BPC and the American Heart Association, conducted with Morning Consult, a strong majority of voters in the United States said increasing access to health care in rural areas is important to them. In fact, 3 in 5 voters said they would be more likely to choose a candidate in the 2020 election who prioritized access to health care in rural America. Not surprisingly, we have seen rural health efforts from the Trump administration, Democratic presidential candidates, and Congress.

As part of our survey, more than half of rural residents (54%) said access to medical specialists, such as cardiologists or oncologists, is a problem in their local community, and more than one-quarter (27%) said it is difficult to access behavioral health professionals. Rural Americans are also more likely than their urban and suburban counterparts to agree that availability of appointments (56% vs. 50%) and the distance to receive care (50% vs. 37%) are barriers to health care.

Three in five voters (61%) would be more likely to vote for a candidate in the 2020 election cycle who says he or she will address access to health care in rural America. Would you be more or less likely to vote for a candidate in the 2020 election cycle who says he or she will address access to health care in rural America, or would it have no impact on your vote either way?

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Source: BPC/American Heart Association poll (Morning Consult), 2019

Given the greater challenges to delivering health care services in rural areas, the task force recognizes that stabilizing and improving the situation will require new expenditures. While the first-year direct costs of recommendations in this report have not been fully estimated, those that have been are likely to exceed $1 billion. Therefore, Appendix A details possible ways in which to offset the cost of these proposals.

The collective issues that challenge rural health care span well beyond what the task force was able to consider for this report. For example, hospitals in states that did not expand Medicaid under the Patient Protection and Affordable Care Act, or ACA, are closing at a higher rate than those in expansion states. While insurance coverage is beyond the scope of this work, BPC offered additional recommendations in its 2020 report: Bipartisan Rx for America’s Health Care. Additionally, the task force felt that broadband access, maternal health, long-term care, oral health, and health care in Native American communities warrant more comprehensive consideration than was feasible in this report.

In addition, the task force acknowledges that what influences the health of rural Americans extends well beyond health care. While this report does not take a comprehensive look at rural social determinants of health including nutrition and housing, or specific rural public health topics including obesity, tobacco use, social isolation, or opioid use disorder, it does take into account that optimizing health outcomes will require tackling these challenges in addition to implementing the recommendations herein. The task force offers the following recommendations.


1. Stabilizing and Transforming Rural Health Care Infrastructure (Page 18)

1A. Stabilizing Rural Hospital and Clinic Infrastructure (Page 19)

Provide immediate financial relief to rural hospitals.

  • Provide rural hospitals relief from Medicare sequestration payment reductions (from FY2021-2023) and Medicare bad debt payment reductions (from FY2021-2023).
  • Increase reimbursement for Medicare Critical Access Hospital, or CAH, services by 3% starting in FY2021.
  • Re-establish the CAH necessary provider designation process.
  • Make available capital infrastructure grants or loans that rural hospitals could use to modify service lines or improve structural or patient safety.

Make certain rural hospital designations or payment adjustments permanent.

  • Take rural facilities out of the ongoing extender and needing to be renewed cycle.
  • Make the Medicare Dependent Hospital designation permanent.
  • Make permanent adjustments for rural hospitals receiving low-volume payments.
  • Allow Sole Community Hospitals to permanently receive additional payment for outpatient services.

Allow new flexibilities around rural hospital care delivery and expand opportunities for rural hospitals and clinics to coordinate service offerings.

  • Evaluate whether to modify and update the CAH 96-hour patient length of stay rule and provide increased flexibility around physician certification requirements.
  • Clarify rules around co-location or shared space agreements that allow rural hospitals to partner with other health care providers.
  • Enact payment reforms to shore up rural health clinics and expand access to advanced practice clinician services in rural clinics.
  • Increase the Medicare-capped reimbursement rate for physician-owned rural health clinics.
  • Allow advanced practice clinicians to work up to their state scope of practice in rural health clinics.

1B . Transforming Rural Hospital and Clinic Infrastructure (Page 26)

Support rural communities in conducting a community needs assessment and developing an action plan.

  • Establish a process for rural facilities and communities to develop a Hospital Transformation Plan as a first step in the transformation process.

Establish a Series of New Rural Transformation Models.

  • Establish a new Rural and Emergency Outpatient Hospital designation that recognizes the shift away from inpatient centric care.
  • Establish an Extended Rural Services Program.
  • Advance new multi-payer, global budget models. • Promote Centers for Medicare and Medicaid Innovation, or CMMI, initiatives to increase coordination and integration of rural hospital and clinic services. Support Opportunities to Advance Rural Health Care Quality.
  • Require all rural hospitals to begin reporting on a core set of rural relevant quality measures. • Study and offer recommendations on establishing a quality reporting program for rural health clinics.

2. Transforming Clinician Payment and Delivery in Rural Areas (Page 40)

Eliminate barriers to the adoption of value-based care.

  • Exempt chronic care management services from beneficiary cost-sharing requirements.
  • Exempt rural Medicare beneficiaries from the prohibition against same-day services.
  • Increase the number of rural-specific CMMI demonstrations and expedite national expansion of promising models.
  • Leverage patient engagement incentives to decrease rural bypass and incentivize local care utilization.

Improve reimbursement for clinicians practicing in rural areas.

  • Provide a nominal payment update for rural clinicians reporting data under the Quality Payment Program.
  • Extend bonus payments for new advanced Alternative Payment Model participants.
  • Exclude enrolled accountable care organization beneficiaries when determining the regional benchmark in rural areas.
  • Evaluate Merit-based Incentive Payment System, or MIPS, data to ensure that rural providers are not disadvantaged by the structure of the program.

Reduce administrative burden for providers.

  • Direct CMS to utilize readily available claims data to assess quality performance.
  • Decrease qualifying participation thresholds for rural providers operating under advanced Alternative Payment Models, Rural Health Clinics, and Federally Qualified Health Centers.

3 . Improving Access to Quality Maternal Care in Rural Areas (Page 47)

Ensure access to obstetric and perinatal services in rural areas.

  • Increase reimbursement rates for rural hospital obstetric units.
  • Enhance the Federal Medical Assistance Percentage rate for rural hospital obstetric units.
  • Increase funding of maternal health training programs for primary care providers.
  • Direct the Centers for Disease Control and Prevention to improve rural maternal mortality data surveillance.

4. Ensuring an Adequate Rural Health Care Workforce (Page 52)

Improve utilization of currently available workforce.

  • Evaluate the potential effect of expanding reimbursement to additional types of providers in rural and Native communities.
  • Add marriage and family therapists and licensed mental health counselors to the list of Medicare-covered providers.
  • Remove regulatory and legislative barriers that prevent non-physician providers from practicing at the top of their license.
  • Eliminate the U.S. Drug Enforcement Administration, or DEA, buprenorphine waiver requirement.
  • Direct CMS to assign a medical specialty to advanced practice nurses and physician assistants.

Strengthen the Health Resources and Services Administration rural workforce programs.

  • Require a comprehensive evaluation of all rural HRSA programs.
  • Allow federal funding for Rural Training Tracks to be dispersed prior to the program start date.

Expand federal rural workforce recruitment and retention initiatives.

  • Exempt Indian Health Service loan repayment funds from federal income tax.
  • Establish a federal tax credit for providers practicing in rural areas.
  • Reauthorize the J-1 visa waiver program and increase caps for doctors practicing in rural areas.
  • Direct the National Advisory Committee on Rural Health and Human Services to evaluate and develop recommendations for interagency coordination.

5. Breaking Down Barriers to Technology in Rural Communities (Page 59)

Support efforts to expand broadband and collect accurate broadband data in rural and tribal areas.

  • Continue to prioritize connecting rural areas with broadband through anchor institutions and direct-to-home services.
  • Ensure effective implementation of the Broadband Deployment Accuracy and Technological Availability Act.

Remove restrictions that prevent full utilization of currently available technology in areas without broadband access.

  • Expand telehealth services to include non-face-to-face services.
  • Allow virtual visits as substitutes to office visits at lengths beyond the currently allowed 5- to 10-minute check-ins.
  • Expand asynchronous services beyond images to include written information shared by phone or through text and email.

Expand the list of authorized sites of service for telehealth.

  • Include the home of an individual in the list of authorized originating sites for telehealth in rural areas.
  • Pass the Rural Health Clinic Modernization Act of 2019 and the CONNECT for Health Act of 2019.

Streamline licensure requirements.

  • Authorize licensed clinicians to provide inter-state services to Medicare beneficiaries.

Prioritize rural-specific training curricula for the health IT workforce.

  • Direct the Office of the National Coordinator for Health Information Technology, or ONC, to prioritize rural-specific training curricula for the health IT workforce.
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