Medicare Value-based Payment Reform: Priorities for Transforming Rural Health Systems

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In recognition of unsustainable healthcare cost growth and sub-optimal delivery system performance, the Patient Protection and Affordable Care Act of 2010 (ACA) contains provisions that redesign healthcare payment and delivery. ACA payment change provisions are driving delivery system reform by making healthcare organizations more accountable for patients’ health as well as
population and community health. The result has been the development of delivery systems that strengthen primary care, embed care coordination and management, and begin to address social determinants of health. However, payment and delivery system reform efforts to date have been concentrated in urban centers, with little attention paid to how they might be applied in rural
health systems. Therefore, in this paper we examine the implications of Medicare payment reforms for rural providers and health services. We offer policy recommendations to facilitate rural inclusion in value-based payment and delivery system reform.

Key Findings and Recommendations

  1. Organize rural health systems to create integrated care.
  2. Build rural system capacity to support integrated care.
  3. Facilitate rural participation in value-based payments.
  4. Align Medicare payment and performance assessment policies with Medicaid and commercial payers.
  5. Develop rural-appropriate payment systems.

This report was written by Health Panel Members: Keith J. Mueller, PhD; Charles Alfero, MA; Andrew F. Coburn, PhD; Jennifer P. Lundblad, PhD, MBA; A. Clinton MacKinney, MD, MS; Timothy D. McBride, PhD; Paula Weigel, PhD (Guest Author); published November 2015.