[Federal Register Volume 82, Number 71 (Friday, April 14, 2017)]
[Notices]
[Pages 17998-18000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07555]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-5523-N]


Medicare Program; Funding in Support of the Pennsylvania Rural 
Health Model--Cooperative Agreement

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS).

ACTION: Notice.

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SUMMARY: This notice announces the issuance of the January 12, 2017 
single-source cooperative agreement funding opportunity announcement to 
begin the Pennsylvania Rural Health Model's implementation activities, 
titled ``Funding in Support of the Pennsylvania Rural Health Model 
Cooperative Agreement'' (the ``Funding Opportunity''). This Funding 
Opportunity is available solely to the Commonwealth of Pennsylvania 
acting through the Pennsylvania Department of Health (the 
``Commonwealth''). This

[[Page 17999]]

Funding Opportunity provides the Commonwealth with necessary start-up 
funding for the Model and is open to the Pennsylvania Department of 
Health, and, once established, the Rural Health Redesign Center (RHRC) 
(or in the event that the RHRC is not established, the Pennsylvania 
Department of Health).

DATES: The project period of the initial award, in the amount of $10 
million, to the Pennsylvania Department of Health will be 12 months 
from the date of award. The project period of the second award, in the 
amount of $15 million, to the RHRC, or to the Pennsylvania Department 
of Health if the RHRC has not been established, will be 36 months from 
the date of award. The performance period of the Pennsylvania Rural 
Health Model began on January 13, 2017, and will conclude on December 
31, 2023.

FOR FURTHER INFORMATION CONTACT: Stephen Cha, (410) 786-1876.

SUPPLEMENTARY INFORMATION:

I. Background

    The Pennsylvania Rural Health Model (the ``Model'') is a new 
Centers for Medicare & Medicaid Services (CMS) alternative payment 
model designed to improve health and health care in rural Pennsylvania. 
Specifically, the Model seeks to increase rural Pennsylvanians' access 
to high-quality care and improve their health, while also reducing the 
growth of hospital expenditures across payers, including Medicare fee-
for-service, and increasing the financial viability of the State's 
rural hospitals to ensure continued access to care facilities. The 
Model will test whether the deliberate care delivery transformation of 
participating rural hospitals, including critical access hospitals 
(CAHs), in conjunction with population-based payments to those 
hospitals (in the form of prospective hospital global budgets for 
participating payers) improves health outcomes and quality of care for 
the Commonwealth's rural residents, reduces the growth of hospital 
expenditures across payers, and improves the financial viability of 
participant rural hospitals to maintain access to care for the 
Commonwealth's rural residents. Participation in the model is voluntary 
for hospitals and payers; and CMS and the Commonwealth will collaborate 
to achieve participation sufficient to meet the hospital participation 
and payer participation scale targets in the Model. This Model is being 
tested by the Center for Medicare and Medicaid Innovation (the 
``Innovation Center'') using the authority of the Secretary of the 
Department of Health and Human Services (the ``Secretary'') in section 
1115A of the Social Security Act (the Act).
    CMS believes that states can be critical partners of the federal 
government and other health care payers to facilitate the design, 
implementation, and evaluation of community-centered health systems 
that can deliver significantly improved cost, quality, and population 
health performance results for all state residents, including Medicare, 
Medicaid, and Children's Health Insurance Program (CHIP) beneficiaries. 
States have policy and regulatory authorities, as well as ongoing 
relationships with commercial health care payers, health plans, and 
health care providers that can accelerate delivery system reform. CMS 
has previously partnered with states to accelerate delivery system 
reform through initiatives such as the State Innovation Models (SIM) 
initiative. SIM provides state-based health care transformation efforts 
with funding to test the ability of states to utilize policy and 
regulatory levers to advance multi-payer health care payment and 
delivery system reform models.
    On January 13, 2017, CMS and the Commonwealth entered into the 
Pennsylvania Rural Health Model Agreement (the ``State Agreement'') to 
implement the Pennsylvania Rural Health Model. The performance period 
of the Model began on January 13, 2017 and will end on December 31, 
2023. As part of the Model, the Commonwealth commits to achieving 
population health outcomes, access and quality targets, financial 
targets, and rural hospital participation and payer participation scale 
targets, as defined in the State Agreement. The Commonwealth intends to 
legislatively authorize and, through the Pennsylvania Department of 
Health, establish the RHRC to operate certain aspects of the Model.
    The Funding Opportunity offers up to a total of $25 million in 
funding to the Commonwealth over a 4-year period, with an initial award 
to the Pennsylvania Department of Health, and a second award to the 
RHRC (or to the Pennsylvania Department of Health, if the RHRC is not 
established in time). The Pennsylvania Department of Health will have 
the opportunity to apply for the initial award with a project period of 
one year (one 12-month budget period) from the date of the award. Then 
the RHRC, if established in time, will have the opportunity to apply 
for the second award with a project period of 36 months from the date 
of the award, comprised of three 12-month budget periods. In the event 
that the RHRC is not established in time, the Pennsylvania Department 
of Health can apply again as the second award applicant.

II. Provisions of the Notice

    The Funding Opportunity offers $10 million in start-up funding to 
the Pennsylvania Department of Health to begin the Model's 
implementation activities, including Model operations, global budget 
administration, data analytics, technical assistance, quality 
assurance, and to establish the RHRC (if authorized to do so by 
Pennsylvania's legislature), to which the Pennsylvania Department of 
Health may delegate the Model's implementation activities once the RHRC 
is established. The Funding Opportunity also provides the RHRC (or the 
Pennsylvania Department of Health, if the RHRC is not established in 
time) with the opportunity to apply for an additional $15 million to 
continue implementation activities under the Model. In the event that 
the RHRC is not established in time, the Pennsylvania Department of 
Health can apply as the second applicant for the additional $15 million 
to continue implementation activities under the Model.
    As set forth in the State Agreement, the Commonwealth commits to 
achieving population health outcomes, access and quality targets, 
financial targets, and rural hospital participation and payer 
participation scale targets. CMS and the Commonwealth aim to transform 
the rural hospital care delivery system to address community health 
needs, achieve financial sustainability for rural hospitals, and 
achieve savings or budget neutrality for payers participating in the 
Model. Payers and rural hospitals can choose to participate in the 
Model, and CMS and the Commonwealth expect to work closely together to 
achieve participation sufficient to meet the hospital participation and 
payer participation scale targets. Additionally, CMS and the 
Commonwealth aim for this Model to deliver meaningful improvements in 
the health of the Commonwealth's rural population by transforming the 
relationships between and among care delivery and public health systems 
across the Commonwealth. CMS and the Commonwealth believe the Model can 
help rural hospitals to succeed, in part by transitioning hospital 
payments from fee-for-service to, prospective hospital global budgets 
for participating payers. More information about the Pennsylvania Rural 
Health Model can be found at: https://innovation.cms.gov/initiatives/pa-rural-health-model/.
    The Funding Opportunity is open solely to the Pennsylvania 
Department

[[Page 18000]]

of Health and to the RHRC (once established). The Pennsylvania 
Department of Health is uniquely positioned as the initial applicant 
under the Funding Opportunity based on its existing knowledge of the 
Model; authority and role in administering the Model; and its existing 
partnerships and collaborations with Pennsylvania health care 
providers, payers, and community-based stakeholders. The RHRC (once 
established) will also be uniquely positioned to meet the goals of the 
Model (as outlined in the State Agreement), as it will be established 
specifically to provide implementation support for the Model.

III. Collection of Information Requirements

    This document does not impose information collection requirements, 
that is, reporting, recordkeeping or third-party disclosure 
requirements. Consequently, there is no need for review by the Office 
of Management and Budget under the authority of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.).

    Dated: April 10, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2017-07555 Filed 4-11-17; 11:15 am]
 BILLING CODE 4120-01-P