Cautious Optimism for Medicare’s New Vision for Rural Health

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By Alex Ebert and Tripp Baltz

Advocates are encouraged by the release of a Rural Health Strategy by the Centers for Medicare & Medicaid Services, but said the real proof of commitment to the initiative would be seen in future policies and programs.

“We’re cautiously optimistic,” said Audrey Smith, executive director of the Critical Access Hospital Coalition in Washington. “We really like to see they’re wanting to focus on rural health, but the devil’s in the details.”

“We’re thrilled they even used the word ‘rural,’” Alan Morgan, chief executive officer of the National Rural Health Association (NRHA), told Bloomberg Law May 9. “I can’t emphasize how profound that is. They’ve almost been consistent in the past with ignoring rural” areas and issues, he said.

Rural Lens

Advocates said the real test of the CMS strategy—the agency’s first for rural areas of the U.S.—will come when the agency demonstrates it has incorporated rural viewpoints in upcoming rules and regulations, and whether it translates to things such as regulatory reductions for rural facilities. The CMS unveiled the strategy May 8, pledging to apply “a rural lens to CMS programs and policies.”

“We’ll be able to see right away whether or not they’ve actually applied that lens,” Morgan said. “It will come down to whether they’ve recognized what the impact will be on rural facilities and communities. Will there be carve-outs for rural? We’ll see.”

In addition to applying a rural lens to its policies and programs, the CMS strategy identified these objectives: Improve access to care through provider engagement and support, advance telehealth and telemedicine, empower patients in rural communities to make decisions about their health care, and leverage partnerships to achieve the strategy’s goals.

Local Offices

Morgan said he hopes the agency makes use of its local CMS offices in its outreach to providers, saying local offices typically have a better feel for what’s going on in rural communities.

In February, CMS Administrator Seema Verma said the strategy would aim to reduce regulatory burdens for rural facilities as it works to increase access to health care. Smith said the strategy was a bit vague on how it will reduce those burdens, saying she was hoping for something a “bit more tangible.”

Reporting requirements, for example, can be difficult for a small hospital to meet when “the c-suite has only one person in it.” She said it’s a problem when critical access hospitals—defined as having fewer than 25 beds—have the same regulations as larger hospitals. The strategy included no details on reducing burdens, she said.

FCC Funding

The strategy touted continued collaboration across agencies with the Department of Health and Human Services, such as the Federal Office of Rural Health Policy at the Health Resources and Services Administration, to help implement the plan.

However, it failed to reference any coordination with the Federal Communications Commission, which administers the federal government’s telemedicine and telehealth programs for rural hospitals, Smith said.

After the FCC exceeded an annual $400 million funding gap, the FCC’s administrator for telehealth announced cuts of 15 percent for individual participants and 25 percent for consortia participants—two or more providers that request support as a single entity—in the commission’s Rural Health Program for the funding year that ends June 30. The program funds broadband services for facilities to enhance quality of care. Again, the strategy was silent about that, she said.

Hospital associations generally praised the CMS for recognizing that rural systems have particular needs. Indiana Hospital Association President Brian Tabor told Bloomberg Law in a May 9 email that the federal strategy is “attuned” to what rural centers need for their patients.

‘Listening Tour’

“Now more than ever, a focus is needed on ensuring patient access and promoting telehealth by eliminating barriers such as reimbursement and licensure issues across state lines,” he said.

The announcement comes at a time when rural health-care centers are hurting. Twenty percent of Ohio’s hospitals have negative operating margins, many of which are in rural areas of the state, John Palmer, spokesperson for Ohio’s Association for Hospitals, told Bloomberg Law in a May 9 email.

Nationally, rural hospitals also are struggling financially. More than 70 rural hospitals have closed since 2010, according to a University of North Carolina study, and a recent NRHA-sponsored study showed some 673 rural hospitals are “vulnerable or at risk for closure.”

‘Living It’

David Boyer, a retired pharmacist on Medicare and part-time provider in a rural hospital, told Bloomberg Law he was “quite interested” in the CMS strategy since he was “living it” and not just reading about it.

Boyer, the co-president of the Council for Ohio Health Care Advocacy, a multidisciplinary association of health-care professionals, said the five strategies identified by the CMS were all important, but “not going to be a quick and easy fix.”

Improving outcomes in rural communities will require better technology, wider use of multidisciplinary treatment teams in outpatient settings, and supplying patients with the valid scientific research they need to take “an active part in their health care,” Boyer said.

Some health-care analysts were critical of the CMS announcement, saying it misses a broader problem.

Steve Wagner, executive director of the Universal Health Care Action Network of Ohio, told Bloomberg Law in a May 9 email that rural needs can be met better through systemic health-care equity policies that address medical professional shortages in urban and rural areas.

‘Reinforces Biases’

“Instead, they reinforce existing bias or add to the burdens that disproportionately affect communities of color,” Wagner said.

“It was a choice that rural, predominately white, counties in Ohio and Michigan are exempted from proposed new Medicaid requirements, while urban areas with equally significant unemployment (and racial diversity) are not exempt— jeopardizing health care coverage through Medicaid,” he said.

The No. 1 way to improve access to high-quality, affordable health care in rural communities is to fully expand Medicaid, Stacy Stanford, health policy analyst for the Utah Health Policy Project in Salt Lake City, told Bloomberg Law May 8.

“Too many low-income Utahns in rural areas are left without any options for health care because they fall into the Medicaid coverage gap,” she said. “Improving provider engagement, empowering patients, and advancing telemedicine are all noble goals—but they will only go so far without the backing of full Medicaid expansion.”

Hospitals in rural parts of Colorado disproportionately serve patients on Medicaid, and thus would be hurt by a rollback of the state’s Medicaid expansion, Joe Hanel, associate director of strategic communications for the Colorado Health Institute in Denver, told Bloomberg Law May 8.

Other Rural News

Rural health has been in the news lately.

  •  The day before the CMS announcement, the Rural Emergency Medical Center Act of 2018 ( H.R. 5678) was introduced in Congress. The bill is designed to ensure patients in rural communities have access to essential emergency and outpatient services, and would establish a new rural facility designation in the Medicare program.
  •  Rural areas have a severe shortage of qualified mental health professionals because agencies and governmental employers can’t pay wages that are competitive with those offered in larger communities, according to a Ball State University report presented in April at the Annual Society for Public Health Education Conference. Ninety-five percent of mental health professionals in rural communities who were surveyed said they aren’t able to meet mental health needs of people in their communities, while 90 percent said it was hard to recruit and retain qualified professionals.
  •  The House version of the massive farm bill calls for $65 million in loans and grants by the Department of Agriculture to create agricultural-related “association type” health plans. While supporters say the provision could help provide farmers with cheaper health insurance, others worry the plans would be less comprehensive than those offered through the Affordable Care Act. Association heath plans generally “threaten the stability of the small group market” and “provide inadequate benefits and insufficient protection to consumers,” according to the National Association of Insurance Commissioners.

To contact the reporters on this story: Alex Ebert in Columbus, Ohio at; Tripp Baltz in Denver at

To contact the editor responsible for this story: Brian Broderick at

For More Information

The announcement from CMS is at

The CMS Rural Health Strategy is at

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