Rural Practice Initiatives

By Shannon Muchmore  | Modern Healthcare, October 24, 2016

Rural providers should be required to participate in federal pay-for-performance programs, but the measurements should reflect rural patient volume and demographics and practice size, according to an analysis requested by HHS.

A 20-member committee convened by the National Quality Forum was tasked by HHS to determine how to deal with the difficulties in using performance measures to judge rural practitioners for CMS pay-for-performance programs.

In its report, the committee recommended a two- to four-year phased-in approach for including rural providers in federal quality-improvement initiatives. Programs such as Medicare's value-based purchasing and readmissions reduction programs generally exclude rural providers because they're limited to hospitals paid under the inpatient prospective-payment system. Similarly, the value-based payment modifier for physicians is limited to those in practices with at least 100 clinicians. Extending such initiatives to rural hospitals and practices could begin with paying them for reporting quality data and transitioning to public reporting requirements before pay-for-performance implementation.

The report recommends developing quality measures with rural providers in mind. These measures would need to consider the small patient populations as well as the challenges posed by heterogeneous rural populations. The data would have to be easily gathered and reported by small staffs.

The document also suggests that the CMS should use performance-based payment incentives but not institute penalties. Rural providers are encouraged to group together to obtain the incentive payments.

In a statement regarding the report, the committee noted that ​since rural hospitals don't report quality data, patients may interpret the lack of data as meaning their hospitals are of lower quality​.

“In addition, exclusion from the CMS quality programs denies rural providers the ability to earn payment incentives that are open to other providers,” according to the statement.

The report comes amid continuing reports of rural providers struggling to stay afloat. More than 50 rural hospitals have closed in the past five years, and about 280 are financially vulnerable, according to the National Rural Health Association.

The American Hospital Association, however, responded that mandatory participation in value-based performance programs is premature and developing a set of measures that examines the right issues in the right way will be difficult. The AHA also said adopting payment incentives without penalties might be politically unfeasible.

The National Organization of State Offices of Rural Health said any measures would have to be adjusted to reflect the effects of the rural provider shortage on population health, and that they should focus on assessing the quality of primary care and procedures actually conducted in rural settings.

Otherwise, the organization said, a “low level of applicability would compromise the usefulness of these measures as core quality indicators for rural hospitals.”

This is a detailed study of how changes to the current healthcare system impact RHC providers. In most states, including California, there are fewer than needed Family Medicine physicians. RHC physicians struggle to afford new technology, like EMRs. Many are breaking even and some are losing money. This well documented study highlights other unique characteristics of the Rural Physician and the patients who are under their care. 

View Study >>


CMS and the National Quality Forum (NQF) convened a multi-stakeholder committee to determine what quality measures would be applicable to the rural physician. Patient populations are different in behavior, illness, and referral patterns vs other physicians. Both agencies want to encourage select quality reporting participation by offering only incentives, and not penalties to these low-volume practices. Please click on link below to see an abstract of the study and download the final report of the National Quality Forum.

View the Report >>