New Medicare Innovation Model for Rural Health Care Providers

Rural health care delivery systems face a myriad of obstacles in providing care. The latest effort made by the Centers for Medicare & Medicaid Services (CMS) to address these disparities is the Community Health Access and Rural Transformation (CHART) Model.

Under the CHART Model, CMS will provide funding through two opportunities:

  • Community Transformation Track
  • Accountable Care Organization (ACO) Transformation Track


The CHART Model is testing if up-front investments and predictable payments will enable rural health care providers to provide better access to high-quality care while reducing overall health care costs.

The model aims to do the following:

  • Provide up-front funding and predictable capitated payments to increase participation by providing greater financial stability for rural providers
  • Provide waivers that increase operational and regulatory flexibility for rural providers
  • Assist rural providers in remaining financially sustainable and enhance their ability to provide services that help address social determinants of health

Community Transformation Track

Participant Eligibility

CMS will award $75 million to 15 Lead Organizations selected to participate in the Community Transformation Track. A Lead Organization is defined as a single entity that represents a rural community, comprised of either:

  • A single county or census tract
  • A set of contiguous or noncontiguous counties or census tracts

Each county or tract must be classified as rural, as designated by the Federal Office of Rural Health Policy (FORHP). The rural community must then include at least 10,000 Medicare Fee-for-Service (FFS) beneficiaries with a primary residence located within the area.

Examples of eligible Lead Organizations include the following:

  • State Medicaid agencies
  • State Offices of Rural Health
  • Local public health departments
  • Independent practice associations
  • Academic medical centers
  • Health systems

A participant hospital must be an acute care hospital or Critical Access Hospital (CAH) that is located within the rural community defined by the Lead Organization and meets one of the following requirements:

  • Receives at least 20% of its eligible Medicare FFS revenue from services provided to residents of the community
  • Provides services to residents of the community that in aggregate account for at least 20% of the eligible Medicare FFS expenditures of the community

Lead Organization Responsibilities

Selected Lead Organizations will be responsible for working closely with key model participants and driving health care delivery system redesign by leading the development and implementation of transformation plans with their community partners.

Lead Organizations are a critical part of the CHART Model’s success because they’re responsible for coordinating efforts across the community.

Key responsibilities include the following:

  • Overseeing the execution and coordination of the transformation plan that outlines the redesign of the health care delivery strategy for the community
  • Ensuring that access to care is maintained and that the needs of stakeholders are understood and accounted for
  • Managing the cooperative agreement funding
  • Recruiting participant hospitals
  • Engaging the state Medicaid agency
  • Establishing relationships with other aligned payers
  • Convening an advisory council
  • Ensuring compliance with model requirements


CMS will award up to $5 million to each Lead Organization. Once enrolled, Lead Organizations and their community partners will receive the following:

  • Up-front cooperative agreement funding
  • Financial flexibility through a predictable capitated payment amount for participant hospitals
  • Additional operational and regulatory flexibilities
Cooperative Agreement Funding

Cooperative agreement funding is tied to performance requirements but isn’t limited to the following:

  • Up to $2 million for the pre-implementation period awarded upon selection into the model and acceptance of the terms and conditions
  • Up to $500,000 per performance period, over six one-year periods, awarded upon CMS approval of the transformation plan and a sufficient amount of participant hospitals’ revenue in a capitated payment amount arrangement
Capitated Payment Amount

Amounts will be paid in bi-weekly payments that are meant to provide a predictable funding stream. There’s a five-step process that goes into administering payments:

  1. Determine baseline revenue using historical expenditures
  2. Apply prospective adjustments
  3. Apply a discount
  4. Apply mid-year adjustments
  5. Apply end-of-year adjustments

Quality Reporting

Participants will be evaluated on six quality measures.

Three reporting measures are required:

  • Inpatient and emergency department visits for ambulatory care-sensitive conditions
  • Hospital-wide all-cause unplanned readmissions
  • Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS)

Participants will select three additional measures from a menu of options in four distinct population health domains:

  • Substance use
  • Chronic conditions
  • Maternal health
  • Prevention


Participants in the CHART Model benefit from a number of operational flexibilities as well as these legal waivers:

  • Medicare and CAH Conditions of Payment or Conditions of Participation waivers
  • SNF 3-Day rule waiver
  • Gift card reward for chronic disease management programs
  • CAH 96-hour certification rule
  • Cost sharing support for Part B service
  • Care-management home visits
  • Transportation
  • Telehealth flexibilities

ACO Transformation Track

CMS will select up to 20 existing rural Medicare Shared Savings Program (MSSP) ACOs to enroll in the ACO Transformation Track.

To qualify, the majority of providers and suppliers in the ACO must be located in rural counties or census tracts, as defined by FORHP. The CHART ACO will enter into new participation agreements with CMS to participate in both the MSSP and the CHART Model. Both of these agreements will last the full duration of the five-year program.


CHART ACOs will receive advanced shared savings payments, comprised of two components:

  1. A one-time, up-front payment equal to a minimum of $200,000 plus $36 per assigned beneficiary
  2. A prospective per-beneficiary-per-month (PBPM) payment equal to at least $8 for up to two years

The up-front PBPM is based on the accepted risk level and the number of beneficiaries assigned to the ACO. It’s capped at a maximum of 10,000 beneficiaries.

The CHART ACO’s advanced shared savings payments will be recouped from future shared savings payments earned through the MSSP. CMS will pursue full recovery of advanced shared savings payments from any CHART ACO that doesn’t complete its agreement.


Community Transformation Track

CMS announced the Notice of Funding Opportunity for the Community Transformation Track on September 15, 2020. Applications for this track are due by February 16, 2021.

The pre-implementation period is planned for July 2021–June 2022, and the six-year performance period is planned for July 2022–June 2028.

ACO Transformation Track

The Request for Application for the ACO Transformation Track will be available in early 2021, with applicant selection completed in fall 2021. The five-year performance period is planned for January 2022–December 2026.

We’re Here to Help

Our team has extensive experience in designing and implementing value-based care models and working with rural communities. For help navigating the CHART Model—as well financial and operational planning and engaging community partners, payors, and other stakeholders—contact your Moss Adams professional.

Special thanks to Scott Murphy for his contributions to this article.

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