Rural Hospital Sustainability Act

II 116TH CONGRESS 1ST SESSION S. 2157 To amend title XI of the Social Security Act to expand the use of global payments to hospitals in rural areas. IN THE SENATE OF THE UNITED STATES JULY 18, 2019 Mr. CASEY introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XI of the Social Security Act to expand the use of global payments to hospitals in rural areas. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Rural Hospital Sus- 4 tainability Act’’. 5 SEC. 2. FINDINGS. 6 Congress makes the following findings: 7 (1) Approximately 10,000,000 individuals age 8 65 and older live in rural America today. In fact, 1 9 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 2 •S 2157 IS out of every 4 older adults lives in a small town or 1 other rural area. 2 (2) Residents of rural areas are more likely to 3 be poorer, sicker, and have lower incomes compared 4 to their urban counterparts. 5 (3) According to the Office of Rural Health 6 Policy, from 2005 to 2009, people living in rural 7 areas had an average life expectancy of 76.8 years, 8 a full two years less than their urban counterparts 9 who had an average life expectancy of 78.8 years. 10 (4) Many rural hospitals are located in areas 11 where a majority of the population is age 65 and 12 older and has Medicare coverage. 13 (5) Certain State-based demonstrations to im- 14 prove payment models for rural hospitals show 15 promise in improving healthcare, reducing costs, and 16 integrating services for patients. 17 (6) Experts and organizations suggest that 18 transitioning rural hospitals to global payment sys- 19 tems would benefit patients, providers, and rural 20 communities. 21 SEC. 3. EXPANDING THE USE OF GLOBAL PAYMENTS TO 22 HOSPITALS IN RURAL AREAS. 23 Section 1115A(b)(2) of the Social Security Act (42 24 U.S.C. 1315a(b)(2)) is amended— 25 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 3 •S 2157 IS (1) in subparagraph (B), by adding at the end 1 the following new clause: 2 ‘‘(xxviii) National testing of a model 3 for global payments to hospitals in rural 4 areas as described in subparagraph (D).’’; 5 and 6 (2) by adding at the end the following new sub- 7 paragraph: 8 ‘‘(D) NATIONAL TESTING OF MODEL FOR 9 GLOBAL PAYMENTS TO HOSPITALS IN RURAL 10 AREAS.—In the case where the Secretary selects 11 the model described in clause (ii) of this sub- 12 paragraph for testing pursuant to clause (xxviii) 13 of subparagraph (B), the following shall apply: 14 ‘‘(i) NATIONAL TESTING.— 15 ‘‘(I) IN GENERAL.—Subject to 16 subclause (II), the Secretary shall 17 allow each State to develop and sub- 18 mit to the Secretary an application to 19 begin testing such model in accord- 20 ance with this clause within 1 year of 21 the date on which the model is se- 22 lected for such testing. 23 ‘‘(II) STATE DESIGNATION OF 24 ENTITIES.—A State may designate an 25 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 4 •S 2157 IS entity or organization for purposes of 1 developing and submitting an applica- 2 tion under subclause (I) with respect 3 to the State, which may include the 4 implementation of such model in the 5 State. In the case where a State 6 makes such a designation, with re- 7 spect to any activities covered by the 8 designation, the entity or organization 9 so designated shall be subject to any 10 requirements applicable to the imple- 11 menting State under this subpara- 12 graph in the same manner as such re- 13 quirements are applicable to the im- 14 plementing State. 15 ‘‘(III) NO EFFECT ON ONGOING 16 MODELS OR DEMONSTRATION 17 PROJECTS.—Nothing in this subpara- 18 graph shall effect the testing of any 19 model under this subsection or any 20 demonstration project under this Act 21 that is implemented prior to the date 22 of the enactment of this subpara- 23 graph. 24 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 5 •S 2157 IS ‘‘(ii) MODEL DESCRIBED.—The model 1 described in this clause seeks to increase 2 rural Americans’ access to quality care in 3 order to improve health, while also reduc- 4 ing the growth of hospital expenditures 5 across payers, including Medicare, and in- 6 creasing the financial viability of rural hos- 7 pitals to ensure continued access to care. 8 Under this model, participating rural hos- 9 pitals would— 10 ‘‘(I) be paid based on all-payer 11 global budget, a fixed amount that is 12 set in advance for inpatient and out- 13 patient hospital-based services and 14 paid monthly by Medicare fee-for-serv- 15 ice, State Medicaid plans, and all 16 other participating payers; 17 ‘‘(II) deliberately redesign the de- 18 livery of care to improve quality of 19 care and meet the needs of their local 20 communities; 21 ‘‘(III) receive an upfront, fixed 22 payment for infrastructure redesign, 23 in an amount to be recovered over a 24 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 6 •S 2157 IS period of time as set forth by the Sec- 1 retary; 2 ‘‘(IV) receive annual global budg- 3 et payment adjustments based on an 4 amount determined in conjunction 5 with the Secretary; and 6 ‘‘(V) partner with non-hospital 7 providers such as physicians, behav- 8 ioral health providers, schools, and 9 community based organizations to cre- 10 ate a comprehensive care delivery sys- 11 tem. 12 ‘‘(iii) DEFINITIONS.—In this subpara- 13 graph: 14 ‘‘(I) IMPLEMENTING STATE.— 15 The term ‘implementing State’ means 16 a State whose application to begin 17 testing such model is approved by the 18 Secretary under clause (i). 19 ‘‘(II) RURAL HOSPITAL.—The 20 term ‘rural hospital’ means the fol- 21 lowing: 22 ‘‘(aa) A critical access hos- 23 pital (as defined in section 24 1861(mm)(1)). 25 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 7 •S 2157 IS ‘‘(bb) A sole community hos- 1 pital (as defined in section 2 1886(d)(5)(D)(iii)). 3 ‘‘(cc) A medicare-dependent, 4 small rural hospital (as defined 5 in section 1886(d)(5)(G)(iv)). 6 ‘‘(dd) Any other hospital 7 that is located in a rural area (as 8 defined in section 1886(d)(2)(D)) 9 or is treated as being located in 10 a rural area pursuant to section 11 1886(d)(8)(E). 12 ‘‘(iv) REQUIREMENTS FOR PARTICI- 13 PATING HOSPITALS.— 14 ‘‘(I) IN GENERAL.—In order to 15 participate in the model in an imple- 16 menting State, a rural hospital 17 must— 18 ‘‘(aa) subject to subclause 19 (II), conduct a community health 20 needs assessment survey to deter- 21 mine the condition and health 22 needs in their community, includ- 23 ing those needs with respect to 24 mental or behavioral health; and 25 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 8 •S 2157 IS ‘‘(bb) following such assess- 1 ment survey, submit and, subject 2 to clause (vi), receive approval of 3 a Rural Hospital Transformation 4 Plan (as described in clause (v)) 5 from the implementing State and 6 the Secretary. 7 ‘‘(II) EXCEPTION.—A rural hos- 8 pital meets the requirement described 9 in subclause (I)(aa) if the rural hos- 10 pital has conducted a community 11 health needs assessment survey during 12 the preceding year for any purpose. 13 ‘‘(v) RURAL HOSPITAL TRANS- 14 FORMATION PLAN DESCRIBED.—A Rural 15 Hospital Transformation Plan described in 16 this clause, with respect to a rural hos- 17 pital, shall include the following informa- 18 tion: 19 ‘‘(I) Results of the community 20 health needs assessment survey under 21 clause (iv)(I)(aa) and an explanation 22 of how the Transformation Plan suits 23 the needs of the community. 24 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 9 •S 2157 IS ‘‘(II) The population of individ- 1 uals who will be served by the rural 2 hospital under the model. 3 ‘‘(III) The types of services that 4 will be included in the global payment 5 under the model. 6 ‘‘(IV) How the rural hospital in- 7 tends to improve quality and health 8 outcomes under the model, including 9 which population health outcomes the 10 hospital will assess on an annual 11 basis. 12 ‘‘(V) How the rural hospital will 13 achieve patient engagement and in- 14 volvement in the model. 15 ‘‘(VI) How the rural hospital will 16 identify, partner with, and pay other 17 entities participating in the model. 18 ‘‘(VII) How private payers will be 19 included in the model. 20 ‘‘(VIII) Plans to account for any 21 market share changes under the 22 model. 23 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 10 •S 2157 IS ‘‘(IX) How access to preventive 1 care will be increased under the 2 model. 3 ‘‘(X) How the rural hospital will 4 sustain the changes made under the 5 model. 6 ‘‘(XI) How savings under the 7 model will accrue to the Medicare pro- 8 gram under title XVIII. 9 ‘‘(XII) Any other information re- 10 quired by the implementing State or 11 the Secretary. 12 ‘‘(vi) OPPORTUNITY FOR PUBLIC COM- 13 MENT.—In order for the Secretary or an 14 implementing State to approve a Rural 15 Hospital Transformation Plan under 16 clause (iv), the Secretary in consultation 17 with the implementing State, shall— 18 ‘‘(I) provide the public with a 19 meaningful opportunity, as deter- 20 mined by the Secretary, to provide 21 comments on the plan; and 22 ‘‘(II) make a summary of com- 23 ments provided available to the public 24 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 11 •S 2157 IS on the Internet website of the Centers 1 for Medicare & Medicaid Services. 2 ‘‘(vii) TECHNICAL ASSISTANCE.—The 3 Secretary shall designate an entity to pro- 4 vide technical assistance to participating 5 rural hospitals as they redesign the care 6 they deliver under the model. 7 ‘‘(viii) ACCOUNTING FOR UNCER- 8 TAINTY.—In order for implementing States 9 and participating rural hospitals to receive 10 unanticipated additional resources needed 11 to implement the model, the Secretary 12 shall establish procedures for implementing 13 States and participating rural hospitals to 14 submit to the Secretary a request for addi- 15 tional resources, should variations in serv- 16 ices outside of normally planned volume 17 occur or should new technologies be devel- 18 oped, or in such other circumstances as the 19 Secretary determines appropriate. 20 ‘‘(ix) MONITORING OUTCOMES.—The 21 Secretary, in conjunction with imple- 22 menting States and participating rural 23 hospitals, shall develop a plan to— 24 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 12 •S 2157 IS ‘‘(I) identify, using a partici- 1 pating rural hospital’s approved Rural 2 Hospital Transformation Plan de- 3 scribed in clause (v), the relevant local 4 population of patients attributable to 5 the hospital, the data points the hos- 6 pital may need to guide care redesign 7 for that population, and how the hos- 8 pital may use such data; 9 ‘‘(II) annually monitor outcomes 10 under the model, which may include 11 financial, quality, access, and utiliza- 12 tion outcomes; 13 ‘‘(III) annually monitor the spe- 14 cific population health outcomes listed 15 in the approved Rural Hospital 16 Transformation Plan of each partici- 17 pating rural hospital pursuant to 18 clause (v)(IV); and 19 ‘‘(IV) any other outcomes as de- 20 termined by the Secretary. 21 ‘‘(x) RISK MITIGATION.—As part of 22 the model, the Secretary, in conjunction 23 with implementing States and participating 24 rural hospitals, shall develop appropriate 25 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 13 •S 2157 IS mechanisms to mitigate risks, including 1 the use of reinsurance. 2 ‘‘(xi) REPORTING REQUIREMENTS.— 3 ‘‘(I) REPORT TO SECRETARY.— 4 An implementing State, as a condition 5 of implementing the model, shall part- 6 ner with an independent entity to re- 7 port to the Secretary on the ability of 8 a participating rural hospital to carry 9 out the Rural Hospital Trans- 10 formation Plan described in clause 11 (v). 12 ‘‘(II) REPORT TO CONGRESS.— 13 Not less frequently than every 5 years 14 (for the duration of the implementa- 15 tion of the model under this subpara- 16 graph), the Secretary shall submit to 17 Congress a report on the implementa- 18 tion of the model under this subpara- 19 graph. The report shall include best 20 practices for future implementation 21 efforts and any other information the 22 Secretary determines appropriate, in- 23 cluding the information reported 24 under subclause (I), together with rec- 25 VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS 14 •S 2157 IS ommendations for such legislation and 1 administrative action as the Secretary 2 determines appropriate. 3 ‘‘(xii) FUNDING.—The Secretary shall 4 allocate funds made available under sub- 5 section (f)(1) to design, implement, evalu- 6 ate, and report on the model described in 7 clause (ii) in accordance with this subpara- 8 graph.’’. 9 Æ VerDate Sep 11 2014 21:22 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6301 E:\BILLS\S2157.IS S2157 kjohnson on DSK79L0C42 with BILLS