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Rural Health Information Hub

Testing New Approaches

Why Rural-Specific Demonstration Projects Are Needed

The healthcare delivery system is undergoing dramatic change, with an emphasis on finding new approaches and organizational frameworks to:

  • improve health outcomes,
  • control costs,
  • improve population health, and
  • advance health equity

Financial incentives are changing from a focus on volume-based services to value-based services. There is a concurrent need to better measure and account for quality of care in all settings and improve transitions of care as patients move from one care setting to another.

Advances in technology and new approaches to organizing care delivery are occurring quickly, with examples like the patient-centered medical home, accountable care organizations, and patient-safety organizations.

Most early adopters of new care models have been large, urban-based integrated delivery systems. Less is known about how these changes and environmental factors will affect rural healthcare delivery systems. Because rural healthcare providers are often paid outside of the traditional prospective payment systems and fee schedules, there is less known about how new and emerging models might function in rural communities. As a result, policy makers and rural providers need to better understand the implications of new and emerging models for low-volume rural settings.

The Centers for Medicare & Medicaid Services (CMS) Innovation Center was established through the Affordable Care Act. The CMS Innovation Center tests new payment and service delivery models that may reduce cost, while also providing care of similar or higher quality. The 2021 CMS Innovation Center Strategy Refresh discusses the continued potential for CMS demonstrations to address the needs of rural providers and expand the reach of demonstration programs to Medicare and Medicaid beneficiaries in rural and underserved areas. Center for Medicare and Medicaid Innovation: 2024 Report to Congress presents summaries and updates to payment and service delivery models and initiatives tested or announced between October 2022 and September 2024. Additionally, Re-Imagining Rural Health: Themes, Concepts, and Next Steps from the CMS Innovation Center "Hackathon" Series summarizes themes that emerged from the CMS Innovation Center's August 2024 Rural Health Hackathons, which aimed to inform potential payment and service delivery model development and to identify innovative solutions to address the access, care delivery, and workforce needs of rural, tribal, frontier, and geographically isolated areas communities.

The Rural Health Value program, with support from a Federal Office of Rural Health Policy (FORHP) cooperative agreement, examines the rural implications of demonstration projects and other changes to healthcare organization, finance, and delivery. The Rural Health Value website provides analyses of innovations undertaken in a rural setting, as well as resources for organizations interested in undertaking similar programs.

Rural-Specific Initiatives Being Tested by HRSA

  • Rural Maternity and Obstetrics Management Strategies (RMOMS) Program – ongoing
    Focuses on improving maternal healthcare in rural communities. Funded by the Health Resources and Services Administration's (HRSA) Federal Office of Rural Health Policy (FORHP) and Maternal and Child Health Bureau (MCHB), this four-year program allows awardees to test models of maternal healthcare to address unmet needs for populations that may experience poor health outcomes, health disparities, and other inequities. The first cohort (2019-2023) included rural networks in Missouri, New Mexico, and Texas. Evaluation of the Rural Maternity and Obstetrics Management Strategies Program: 2019 Cohort - Second Annual Report provides an overview of the first cohort's first implementation year, 2020-2021; network characteristics; model and goals; health equity efforts; sustainability; and maternal health outcomes. Since 2019, 14 awardees across 11 states have participated in RMOMS.
  • Rural Residency Planning and Development Program – ongoing
    An initiative from the Health Resources and Services Administration (HRSA) to expand the physician workforce in rural communities. Since 2019, HRSA has awarded three-year grants to develop rural residency programs in family medicine, internal medicine, and psychiatry. Grant recipients include rural hospitals, community health centers, Indian Health Service-operated health centers, Indian tribes and tribal organizations, and schools of medicine. In fiscal year 2024, HRSA awarded 15 additional grants to recipients in 14 states. Since 2019, HRSA has awarded $64 million to 84 grantees across 38 states and Puerto Rico.

Rural-Specific Demonstrations Being Tested by CMS

  • Frontier Community Health Integration Project (FCHIP) – ongoing
    Developed and tested new models for the delivery of healthcare services in frontier areas through improving access to, and better integration of, the delivery of healthcare to Medicare beneficiaries. The Consolidated Appropriations Act, 2021, authorized a five-year extension period for participating Critical Access Hospitals beginning on July 1, 2021.
  • Pennsylvania Rural Health Model – ongoing
    Designed to improve the financial viability of rural Pennsylvania hospitals and reduce the growth of hospital expenditures across payers, including Medicare. Participating rural hospitals will be paid monthly based on fixed all-payer global budgets and redesign their healthcare delivery system to improve quality and access in rural Pennsylvania communities. Jointly administered by CMS and the Pennsylvania Department of Health, the model is open to Critical Access Hospitals and acute care hospitals in rural Pennsylvania. The Pennsylvania Rural Health Model (PARHM): Fourth Annual Evaluation Report evaluates the fourth performance year of the model.

    A similar model, the Maryland Total Cost of Care (TCOC) Model, is underway for the entire state of Maryland, including rural areas, and sets a per capita limit on Medicare total cost of care in Maryland. Evaluation of the Maryland Total Cost of Care Model: Progress Report estimates the impact of the first four years of the model.
  • Rural Community Hospital Demonstration – ongoing, accepting applications
    Implements cost-based reimbursement in participating small rural hospitals that are not eligible for Critical Access Hospital designation. Designed to assess the impact of cost-based reimbursement on the financial viability of small rural hospitals, and test for benefits to the community. Evaluation of the Rural Community Hospital Demonstration: Interim Report Two (Covering 2016-2018), issued in December 2022, describes the 29 hospitals participating in the model as of fiscal year 2018 and the impact of the program on hospital finances. In December 2024, CMS announced a request for applications for up to 10 additional hospitals to participate in the program. Applications are due by March 1, 2025.

Rural-Relevant Demonstrations Involving Accountable Care Organizations (ACOs)

Additional Rural-Relevant Demonstrations Being Tested by CMS

  • Accountable Care Organization (ACO) Primary Care Flex Model – announced
    A voluntary model within the Medicare Shared Savings Program (SSP), the ACO Primary Care Flex Model aims to increase the number of low-revenue accountable care organizations (ACOs) in the SSP. Participating ACOs and their participating primary care providers, including Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs), will receive Prospective Primary Care Payments (PPCPs) instead of fee-for-service reimbursement for primary care services. PPCPs are monthly prospective, population-based payments based on a county’s average primary care spending. PPCP payment enhancements will also be given to providers caring for underserved populations, where appropriate. Additionally, the PPCP will include beneficiary-level adjustments for beneficiaries who receive the plurality of primary care services at RHCs or FQHCs. ACO Primary Care Flex Model participants will also receive a one-time Advanced Shared Savings Payment to help cover the costs of forming an ACO and administrative costs associated with the model. Participating ACOs will jointly participate in the ACO Primary Care Flex Model and the SSP, though certain changes may apply. The ACO Primary Care Flex Model is expected to operate for five years, beginning January 1, 2025.
  • Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) Model – ongoing
    A redesign of the Global and Professional Direct Contracting (GPDC) Model intended to encourage healthcare coordination to improve care for people with Medicare, especially those from underserved communities. CMS will use the ACO REACH model to test an ACO model that can inform the Medicare Shared Savings Program and future models. Changes to the GPDC Model incorporated into the ACO REACH Model include advancing health equity; promoting leadership and governance; and increasing participant vetting, monitoring, and transparency. CMS announced additional updates to the ACO REACH Model for the 2025 performance year by adjusting the financial methodology to improve model sustainability, responding to feedback on improvements to the accuracy of benchmarks, and strengthening operational flexibility and risk management.
  • AHEAD Model – ongoing
    A voluntary state total cost of care (TCOC) model, the States Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model will test state accountability for controlling overall growth in health expenditures while increasing investment in primary care and improving population health outcomes within the state or a region within the state. The AHEAD Model aims to improve the total health of state populations and lower healthcare costs through strengthening primary care, improving care coordination, and increasing screening and referrals to community resources to address social drivers of health. AHEAD is built on lessons learned from the Maryland Total Cost of Care Model, the Vermont All-Payer ACO Model, and the Pennsylvania Rural Health Model. In 2024, CMS announced that Maryland and Vermont will participate in Cohort 1, Connecticut and Hawaii will participate in Cohort 2, and Rhode Island and five counties in New York will participate in Cohort 3. The AHEAD Model is scheduled to operate for a total of 11 years, from 2024 through 2034.
  • Bundled Payments for Care Improvement Advanced (BPCI Advanced) Model – ongoing
    Participating providers receive a single bundled payment for a clinical episode of care, based on the expected costs of all items and services provided during the episode. Aims to reduce Medicare expenditures while maintaining or improving quality of care. Participants in this model include rural hospitals.
  • Guiding an Improved Dementia Experience (GUIDE) Model – ongoing
    The Guiding an Improved Dementia Experience (GUIDE) Model aims to support Medicare fee-for-service beneficiaries with dementia and their caregivers through comprehensive, coordinated care to prevent or delay long-term nursing home care for people with dementia. A voluntary alternative payment model, participating providers receive a monthly per-beneficiary payment from CMS and can bill Medicare for respite services for caregivers of certain beneficiaries. Additionally, GUIDE Model participating providers must provide a standardized set of services for beneficiaries and their caregivers by utilizing an interdisciplinary care team. The GUIDE Model is expected to operate for 8 years, from July 2024 through July 2032.
  • Innovation in Behavioral Health (IBH) Model – ongoing
    A voluntary state-based model designed to improve the quality of care and behavioral and physical health outcomes of Medicaid and Medicare populations with moderate to severe mental health conditions and substance use disorders (SUD). Participating Medicaid agencies will select community-based behavioral health organizations and providers such as Community Mental Health Centers, opioid treatment programs, safety net providers, and other practices where individuals can receive outpatient mental health and/or SUD services to serve as practice participants. Practice participants will lead and coordinate with an interprofessional care team to comprehensively address a patient’s behavioral and physical healthcare, as well as health-related social needs (HRSN) such as housing, food, and transportation. In December 2024, CMS announced that the Michigan, New York, Oklahoma, and South Carolina Medicaid agencies were selected to participate. The IBH Model began January 2025 and is scheduled to operate for a total of eight years, including a three-year pre-implementation period.
  • Integrated Care for Kids (InCK) Model – ongoing
    A child-centered local service delivery and state payment model aimed at reducing expenditures and improving the quality of care for children covered by Medicaid and the Children’s Health Insurance Program (CHIP) through prevention, early identification, and treatment of priority health concerns. The goals of the InCK Model are to improve child health, reduce avoidable inpatient stays and out-of-home placements, and create sustainable alternative payment models (APMs). Participants include providers serving rural populations in Illinois, Ohio, and Oregon. Integrated Care for Kids (InCK) Model: Evaluation Report 2 profiles each InCK award recipient and presents findings from the first implementation year.
  • Making Care Primary (MCP) Model – ongoing
    Provides a pathway for primary care clinicians with varying levels of experience in value-based care to gradually adopt prospective, population-based payments while building infrastructure to improve behavioral health and specialty care integration and enhance equitable access to care. Participants can choose to participate in one of three progressive tracks, including one track specifically for organizations with no prior value-based care experience. The MCP model builds upon previous primary care models, including the Comprehensive Primary Care (CPC), CPC+, and Primary Care First (PCF) models, as well as the Maryland Primary Care Program. This 10.5-year model began July 1, 2024, and will be available in eight states: Colorado, Massachusetts, Minnesota, New Mexico, New Jersey, New York, North Carolina, and Washington. Rural Health Clinics are not eligible to participate in the MCP Model.
  • Medicare Advantage (MA) Value-Based Insurance Design (VBID) Model – ongoing
    A voluntary model testing innovative Medicare Advantage (MA) service delivery and/or payment approaches, with the aim to reduce Medicare program expenditures, enhance the quality of care for Medicare beneficiaries, and improve the coordination and efficiency of healthcare service delivery. The MA Value-Based Insurance Design (VBID) Model also allows participating MA organizations to offer the Medicare hospice benefit, traditionally "carved-out" of MA coverage, to enrollees. In March 2024, CMS announced that the Hospice Benefit Component will conclude on December 31, 2024. Preview of Findings from the Evaluation of the "VBID General" Component of the Medicare Advantage Value-Based Insurance Design Model Test (2020–2023) presents preliminary findings from the first four years of the model, including the estimated association between VBID and several key outcomes. In 2023, CMS announced a third phase of the model will run from 2025 through 2030. However, in December 2024, CMS announced the VBID Model will conclude at the end of 2025.
  • Medicare Diabetes Prevention Program (MDPP) Expanded Model – ongoing
    A structured behavior change intervention that aims to prevent the onset of type 2 diabetes among Medicare beneficiaries with an indication of prediabetes.
  • Primary Care First Model Options – ongoing
    A set of five voluntary payment model options with the aim of rewarding value and quality through innovative payment structures while emphasizing the doctor-patient relationship supporting advanced primary care. Offered in 26 regions. The Primary Care First Model’s Seriously Ill Population component did not begin on the anticipated April 2021 start date and is currently under review. Evaluation of the Primary Care First Model: Second Annual Report, published in February 2024, reports on the implementation experiences for Cohort 1 and Cohort 2 practices through 2022.
    • Cohort One – ongoing
    • Cohort Two – ongoing
  • Transforming Episode Accountability Model (TEAM) – announced
    A mandatory model for selected acute care hospitals, TEAM aims to improve the coordination and transition of care between providers for patients who undergo certain surgeries. TEAM builds on previous episode-based alternative payment models to test an episode-based payment approach in which selected hospitals will receive a target price to cover all costs associated with the episode of care, including the hospital inpatient stay and items and services following hospital discharge. Participating hospitals will be held accountable for spending and quality performance, though three participation tracks offer different levels of financial risk. Safety net and rural hospitals can participate in model tracks with lower financial risks. Surgical procedures covered under TEAM are lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedure. In September 2024, CMS published a list of acute care hospitals located in the Core Based Statistical Areas (CBSAs) selected for mandatory participation in TEAM. TEAM is expected to operate for 5 years, beginning January 1, 2026.
  • Transforming Maternal Health (TMaH) Model – ongoing
    Supports participating state Medicaid agencies in developing a whole-person approach to pregnancy, childbirth, and postpartum care to address the physical, mental health, and social needs experienced during pregnancy. The Transforming Maternal Health (TMaH) Model aims to reduce disparities in maternal healthcare access and treatment, improve outcomes and experiences for mothers and their newborns, and reduce overall program expenditures. In January 2025, CMS announced that fourteen states and the District of Columbia were selected to participate in the model. TMaH began in January 2025 and is projected to operate for 10 years.
  • Value in Opioid Use Disorder Treatment Demonstration – ongoing
    Creates two new payments for opioid use disorder (OUD) treatment services, a per beneficiary per month care management fee and a performance-based incentive, with the goal of increasing access to OUD treatment, improving health outcomes, and to the extent possible, reducing costs.

Completed Rural and Rural-Relevant Demonstrations

  • Emergency Triage, Treat, and Transport (ET3) Model
    Permits ambulance care teams to use alternate models of emergency health care, such as telehealth treatment and transport to alternative destinations, to improve quality and lower costs of care. Rural Medicare-enrolled suppliers or hospital-based ambulance providers without current medical dispatch and/or telehealth are eligible to participate. The ET3 Model ended on December 31, 2023, two years ahead of schedule, due to lower than expected participation and lower than projected interventions.
  • Community Health Access and Rural Transformation (CHART) Model
    A rural-focused initiative intended to address rural health disparities through healthcare delivery transformation and regulatory flexibilities. This model originally included two tracks for participation. In February 2022, however, CMS announced it removed the previously-publicized Accountable Care Organizations (ACO) Transformation Track from the CHART Model and would instead examine lessons learned from the previously completed CMS Innovation Center’s ACO Investment Model (AIM) to inform future ACO policies. The remaining track, the Community Transformation Track, was designed to fund rural communities to develop and implement a healthcare delivery redesign strategy. In September 2021, CMS announced cooperative agreements with the University of Alabama at Birmingham, State of South Dakota Department of Social Services, Texas Health and Human Services Commission, and Washington State Healthcare Authority to serve as lead organizations in their respective states under the Community Transformation Track. However, the CHART Model ended on September 30, 2023, “[b]ased on feedback received from Model stakeholders, as well as a lack of hospital participation.”
  • Accountable Health Communities Model
    Tested whether systematically identifying and addressing the health-related social needs of Medicare and Medicaid beneficiaries through screening, referral, and community navigation services would impact healthcare costs and reduce healthcare utilization. Provided support to community bridge organizations to test promising service delivery approaches aimed at linking beneficiaries with community services that may address their health-related social needs. Accountable Health Communities (AHC) Model Evaluation: Second Evaluation Report discusses participating organizations that had rural areas within their geographic target areas, and compares outcomes among urban and rural participants, and Accountable Health Communities (AHC) Model Evaluation: Third Evaluation Report describes the availability and quality of community resources to address health-related social needs in rural communities.
  • Comprehensive Primary Care Plus (CPC+)
    Focused on improving the quality, accessibility, and efficiency of primary care through regionally-based multi-payer payment reforms and care delivery transformation. Provided participants with technical assistance and up-front enhanced payments as a way to promote practice building capabilities. Providers participated in one of two tracks depending on their existing care delivery activities. Both tracks qualified as Advanced Alternative Payment Models under the Quality Payment Program (QPP). Performance periods concluded December 31, 2021. Independent Evaluation of Comprehensive Primary Care Plus (CPC+): Final Annual Report evaluates the model across its five-year period, and describes changes in care delivery and Medicare spending, utilization, and quality of care for Medicare fee-for-service beneficiaries.
  • Next Generation ACO Model
    An initiative for ACOs experienced in coordinating care for populations of patients. Allowed higher levels of financial risk and reward than available under the Medicare Shared Savings Program. Evaluation of the Next Generation Accountable Care Organization (NGACO) Model: Final Report summarizes findings from all six performance years (2016-2021), explores how participating entities responded to the model, and describes how they did or did not achieve model goals. Ended December 31, 2021.
  • Transforming Clinical Practice Initiative (TCPI)
    Supported clinician practices in sharing, adapting, and further developing comprehensive quality improvement strategies. The Practice Transformation Networks (PTNs) provided technical assistance and peer-level support and were required to recruit clinicians serving rural and medically underserved communities and small rural practices. The Support and Alignment Networks involved national and regional professional associations and public-private partnerships and supported the recruitment of clinician practices serving small, rural, and medically underserved communities. The initiative concluded September 28, 2019. Clinical practice transformation tools and resources developed through the initiative continue to be available.
  • Medicare ACO Track 1+ Model
    Qualified as an Advanced Alternative Payment Model (APM), sought to encourage more small practices and hospitals to transition to performance-based risk. Incorporated elements of Track 1 and Track 3 of the Medicare Shared Savings Program, and tested a payment design with more limited downside risk than in Track 2 or Track 3. Ended December 31, 2018; participants could elect to extend through June 30, 2019.
  • ACO Investment Model (AIM)
    AIM funding was for accountable care organizations (ACOs) participating or seeking to participate in the Medicare Shared Savings Program. Tested the use of pre-paid shared savings to encourage new ACOs to form in rural and underserved areas and to encourage current Medicare Shared Savings Program ACOs to transition to arrangements with greater financial risk. Ended December 31, 2018. Lessons learned about advanced payments from AIM informed the incorporation of advanced payments into the Shared Savings Program for Calendar Year 2023.
  • Health Care Innovation Awards (HCIA)
    Tested a wide range of innovative projects to deliver better health, improved care, and lower costs via Medicare, Medicaid, and the Children's Health Insurance Program (CHIP), particularly for beneficiaries with the highest healthcare needs. Included projects that serve rural populations. Ended September 1, 2017.
  • State Innovation Models (SIM)
    Supported statewide healthcare system transformation. Aimed to create multi-payer models that raise community health status and reduce long-term health risks for beneficiaries. Statewide approaches included rural areas, although few included a particular rural focus.
  • Frontier Extended Stay Clinics (FESC)
    An enhanced clinic model in frontier areas to address the needs of seriously ill or injured patients who cannot be transferred to a hospital, or who need monitoring and observation for a limited period of time. Ended April 15, 2013.
  • Medical Assistance Facilities (MAF)
    A Montana demonstration program aimed at preserving healthcare access in frontier areas by converting full-service hospitals into low-intensity, short-stay healthcare service centers. Authorized by the Montana State legislature in 1987, with a Health Care Financing Administration (HCFA, the precursor to CMS) Medicare reimbursement waiver through 1993. Along with the Rural Primary Care Hospital (RPCH) program, a precursor to the Critical Access Hospital program. For more information:
  • Essential Access Community Hospital/Rural Primary Care Hospital (EACH/RPCH) Program
    Enacted by the Omnibus Budget Reconciliation Act of 1989, this program recognized a limited-service facility, the Rural Primary Care Hospital, and linked each RPCH into a network tied to a larger supporting Essential Access Community Hospital. Along with the Medical Assistance Facilities (MAF) program, a precursor to the Critical Access Hospital program. For more information:

Last Updated: 01/06/2025