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Policy Update

HHS Regulatory and Policy Changes Focus on Supporting Rural Health Care

The Department of Health and Human Services (HHS) has taken a number of regulatory and policy actions in 2012 to assist rural hospitals, clinics and clinicians who play a key role in ensuring access to high-quality health services in rural America.

The changes are part of an effort to take into account the unique challenges of rural health care delivery. These actions are also part of HHS’ ongoing efforts to support the work of the White House Rural Council, which seeks to streamline and improve the effectiveness of federal programs serving rural America and engage rural stakeholders in that process.

The actions taken include a number of new proposals announced February 4, 2013 aimed at reducing the regulatory burden faced by rural hospitals, clinics and clinicians, among others. Public comments on the proposed rule will be accepted through Monday, April 8.

Along with a number of changes that were part of the 2013 Medicare payment updates and other regulation and policy changes implemented over the past year, the actions include:  

I. Summary of provisions from Burden Reduction Final Rule (CMS-3244-F, published May 16, 2012) that benefit rural providers

  • The regulation eliminated the requirement that Critical Access Hospitals (CAHs) furnish diagnostic and therapeutic services, laboratory services, radiology services, and emergency procedures directly by CAH staff. This allows CAHs to provide such services via contract services. This change better enables CAHs to address staffing challenges, provide high quality care to their patients, and provide CAH patients better access to care.
  • Hospitals can now determine the best ways to oversee and manage outpatients by removing the unnecessary requirement for a single Director of Outpatient Services. This change benefits smaller, low-volume rural hospitals with limited staff resources.

II. Summary of proposals included in Part II Burden Reduction Proposed Rule (CMS-3267-P, issued on February 4, 2013) that benefit rural providers

Proposal: Allow CAHs to Use Existing Staff To Develop Patient Care Policies
CAHs are typically required to develop patient care policies by working with a group that includes at least one representative who is not part of the hospital staff.  Under the proposed rule, CAHs would not have to meet this requirement and could use their own staff to meet the standard.

Proposal: Provide Flexibility for On-Site Physician Supervision Requirements
HHS is proposing to revise the CAH, Rural Health Clinics (RHCs) and Federally-Qualified Health Centers (FQHCs) regulations to replace the requirement that a Medical Doctor (MD) or Doctor of Osteopathy (DO) must be onsite at least once in a two-week period (except in extraordinary circumstances) to provide medical direction, consultation, and supervision to Physician Assistants (PAs) and Nurse Practitioners (NPs). The proposed change would remove a rigid requirement and provides CAHs, RHCs and FQHCs with the flexibility to address their specific circumstances and needs, thus enhancing access to care in rural and remote areas. Some providers in areas that are extremely remote have indicated that they find it difficult to comply with the current precise biweekly schedule requirement.   

Proposal: Allow Dietitians to Order Patient Diets
The proposal would allow Registered Dietitians (in addition to other practitioners responsible for the care of the patient) to order patient diets. This would ease the burden on rural physicians and other clinicians to make these orders on behalf of the dietitians.

Proposal: Allow Flexibility in Outpatient Service Orders
Under this proposal, practitioners who are not on a hospital’s medical staff would be permitted to order hospital outpatient services for their patients when authorized by the medical staff and allowed by state law. Not all clinicians in rural areas, particularly traveling specialists, are necessarily on the medical staff of a small rural hospital. This would allow these clinicians to order services directly.  

Proposal: Align Survey Requirements for Swing Beds and Hospitals
This proposal would allow rural hospitals with swing beds to be surveyed only when the overall hospital is surveyed rather than subjecting the swing beds to a separate survey as required currently. Given the small size of these facilities, allowing a single survey will reduce the burden on the hospital.

Request for Comments on Additional Flexibility for Rural Health Clinics
The proposed rule seeks comments from the public about potential changes that could be made to the regulations or other requirements that could reduce barriers to the provision of telehealth, hospice or home health services in an RHC. There are more than 3,700 RHCs that provide access to health care services for rural residents. RHCs must also be located in a health professional shortage or medically underserved area.  Many RHCs are also located in areas with shortages of mental health services and home health and hospice providers.

III. Summary of 2013 payment update provisions that benefit rural communities

New Primary Care Management Codes
In the rulemaking for the Calendar Year (CY) 2013 Medicare Physician Fee Schedule (MPFS) (PDF - 12.5 MB), HHS established separate payment for new codes that describe transitional care management and care coordination services. These codes would recognize the work of community physicians or qualified non-physician practitioners within 30 calendar days following the date of discharge from an inpatient hospital, psychiatric hospital, long-term care hospital, skilled nursing facility, and inpatient rehabilitation facility; hospital outpatient setting for observation services or partial hospitalization services, and discharge from a community mental health center partial hospitalization program to community-based care. These codes will allow rural primary care providers to better coordinate the care furnished to their patients who are discharged back to rural communities from urban hospitals and skilled nursing facilities.  

New Telehealth Covered Services
Telehealth is an important tool to improve access to a broader range of health care services in rural and frontier communities.  In the CY 2013 MPFS HHS added the following services to the list of those eligible for Medicare payment when furnished via telehealth:

  • Alcohol and/or substance (other than tobacco) abuse structured assessment and intervention services,  
  • Screening and behavioral counseling interventions in primary care to reduce alcohol misuse,
  • Screening for depression in adults,
  • Screening for sexually transmitted infections (STIs) and high-intensity behavioral counseling to prevent STIs,
  • Intensive behavioral therapy for cardiovascular disease, and
  • Intensive behavioral therapy for obesity.

Ordering of Portable X-Ray
In the rulemaking for the CY 2013 MPFS, HHS amended the Conditions for Coverage regulations to permit all physicians and certain non-physician practitioners to order portable x-ray services, within the scope of their Medicare benefit and state law scope of practice.  Previously, only MDs and DOs were permitted to do so. Rural clinics and hospitals rely heavily on non-physician practitioners and this policy will allow for greater access to these services in rural communities that may not always have an MD or DO physician available.

Meaningful Use Stage2 Final Rule
In the final rule for Meaningful Use Stage 2 (PDF - 1.1 MB), HHS adopted a three-month calendar year or federal fiscal year quarter reporting period, rather than a full year reporting period, for professionals and hospitals that have previously demonstrated meaningful use.  This change was supported by rural providers and eases the reporting burden for small rural providers while also ensuring that all providers are using certified electronic health record technology in a meaningful way.

Electronic Health Record Incentive Payments and Critical Access Hospitals
HHS announced in July 2012, through Frequently Asked Questions (FAQs) #3387 that it would allow CAHs to include capital lease costs for the purpose of determining EHR incentive payments. Previously, CMS had excluded capital leases from eligible EHR costs. A number of CAHs use capital leases to acquire EHRs and other technology and equipment, because of favorable financing terms or an inability to secure traditional loans for those purchases.  

Special Project on Quality Improvement in Rural Hospitals
Over the past several months, HHS has increased the level of technical assistance provided to CAHs so that a greater percentage of facilities are now able to voluntarily report quality data for public reporting. HHS is now proposing to build on this effort with a new project to better understand and improve the care delivered by CAHs. Quality Improvement Organizations would focus on transfer communication from the CAH emergency department to acute care receiving facilities. This is a key role for small rural hospitals and is a growing area of focus in national discussions around patient safety and health care quality.

Definition of Rural

See the Definition of Rural for how the Office of Rural Health Policy defines rural areas for its grant programs.

Visit the Rural Health Grants Eligibility Advisor to find out if your organization is eligible for rural health grants.

Policy News

HHS Regulatory and Policy Changes Focus on Supporting Rural Health Care (03/14/2013)

CMS Changes to the Hospital and Critical Access Hospital Conditions of Participation to Ensure Visitation for All Patients

CMS Credentialing and Privileging of Telemedicine Physicians and Practitioners Proposed Rule

CMS Payment Changes for Services in Hospital Outpatient Departments and Ambulatory Surgical Centers

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