Larry Putnam, Project Director Frontier Community Health Integration Project (F-CHIP) Montana Health Research & Education Foundation (MHREF)

Terminology The term “frontier CAH” is used to describe the existing Critical Access Hospital health care service delivery and reimbursement model. The term “Frontier Health System” is used to describe a proposed new model of integrated health care service delivery and reimbursement. The model would integrate an existing frontier CAH and other essential services under a new provider type and reimbursement methodology. The term “Montana F-CHIP facilities/or facility” refers to the nine (or one of the nine) CAHs in Montana participating in the Frontier Community Health Integration Project (F-CHIP) under a cooperative agreement with HRSA/ORHP.

You’re A Frontier CAH if Your ambulance has a gun rack Your physical therapy whirlpool is powered by a trolling motor Your anesthesiologist is named Jack Daniels Your budget for duct tape exceeds $20,000 per year Your first Code Blue step is to cancel the dietary tray Your local system is a party line Your surgical scrubs are made by OshKosh Your medical staff gets CME’s for watching the farm report Thanks to the Illinois Hospital Association Rural Hospital Constituency for this list.

Frontier Healthcare Service Delivery—A Brief History  Medical Assistance Facility (MAF) – Montana-only model, only 12 MAFs in MAF demonstration=foundation for the CAH model --15 bed limit  CAH model-1998 to national scope (46 states), not just Montana’s MAF or mid-west EACH/PCH --cost-based reimbursement --allowed non-physician (PA/NP) medical staff --bed limit increased to 25 beds (total number of CAHs in 2011=1,327) --no longer a frontier model (what is a frontier CAH?—see next slide)  MHA Task Force ( ) --CAH model not working for Montana’s frontier communities  Frontier Community Health Integration Project (F-CHIP)-2008 to 2011

2008 Medicare Improvements to Patients and Providers Act (MIPPA)  MIPPA authorized HHS Secretary “to establish a demonstration project to develop and test new models for the delivery of health care services to Medicare beneficiaries in certain frontier counties.”  Purpose of any new frontier health care service delivery model shall be “to improve access and better integrate the delivery of frontier…health care services for Medicare beneficiaries.”  Primary focus areas for a frontier demonstration shall be (1) to increase access to and improve adequacy of payments for health care services provided under the Medicare and Medicaid programs in frontier areas and (2) to evaluate regulatory challenges facing frontier providers and communities.

“Eligible Entities”—Who Can Participate In The Demonstration?  Must be a CAH located in one of 4 frontier-eligible states: Alaska, Montana, Wyoming or North Dakota  CAH must be located in a county (or borough) with a population of 6 or fewer people per square mile  CAH must have an acute care average daily census of 5 patients or less  LTC services (either a nursing home or CAH swing bed services) must be provided in the county or borough (LTC doesn’t have to be owned by the CAH)  CAH must provide one of the following services:  Home Health  Hospice  Physician Services

Number of Frontier-Eligible CAHs Montana North DakotaWyomingAlaska Totals (4 states) All hospitals CAHs Frontier- eligible CAHs Note: Data from IMPAQ International, MHREF and North Dakota, Wyoming and Alaska FLEX Directors

Frontier Community Health Integration Project (F-CHIP) Overview  Congress provided funding to HRSA/ORHP in 2010 to develop a frontier healthcare demonstration project  9/1/2010, an 18-month, $750,000 cooperative agreement awarded to MHREF by HRSA/ORHP “to assist in the development of a Frontier Community Health Integration Project.”  Purpose of the F-CHIP project is to work with ORHP and CMS “to inform the development of a new frontier health care service delivery model.” Actual design and implementation of a follow up demonstration project are the responsibility of CMS.

VISION The overall vision of the Frontier Community Health Integration Project (F-CHIP) is to establish a new health care entity—a Frontier Health System—that aligns all frontier health care service delivery by means of a single set of frontier health care service delivery regulations and an integrated (not fragmented) payment and reimbursement system. For the Medicare beneficiary, the new Frontier Health System would serve as a single point of contact and patient- centered medical home for the coordination and delivery of preventive and primary care, extended care (including Visiting Nurse Services (VNS) with therapies), long term care and specialty care. Beneficiaries would benefit from the new model through reduced unnecessary admissions and readmissions to inpatient, ER and long term care settings. Homebound frontier Medicare beneficiaries who are unable to travel to obtain medical service would receive access to expanded VNS home care, including monitoring and treatment of chronic conditions. In essence, the local Frontier Health System would aggregate all health care service volume within its service area under one integrated organizational, regulatory and cost-based payment umbrella, spreading fixed cost and producing lower- cost care. In addition, budget-neutral, pay-for-quality incentives would be implemented by the local Frontier Health System to demonstrate high quality care provided to frontier patients at lower cost, with savings shared with the Medicare Program. A new Frontier Health System provider type and Conditions of Participation (COP) would be created. Health care services aggregated into the new Frontier Health System include: hospital ER, inpatient and outpatient; ambulance; swing bed; and an expanded rural health clinic which includes a VNS component that may provide physical, occupational or speech therapy in the frontier patient’s home as well as preventive and hospice services. Each frontier-eligible state—Montana (MT), North Dakota (ND), Wyoming (WY) and Alaska (AK)—would propose forming one or more networks of up to 10 Frontier Health Systems to provide statewide care coordination for frontier patients, assistance in the implementation and measurement of Pay for Outcomes (P4O) incentives as well as distribution of shared savings from CMS to network members.

F-CHIP Products and Timelines Framework For A New Frontier Health System Model: A Proposal To Establish a New “Frontier Health System” Provider Type and Conditions of Participation (completed) 7 White Papers --Frontier Referral and Admission/Readmission Patterns --Frontier Care Transition Capacity and Planning --Frontier Long Term Care Issues/Swing Bed Use --Frontier Telehealth --Frontier Healthcare Workforce --Frontier Quality Measures --Frontier Cost Report Issues ORHP F-CHIP Funding ends 2/29/2012. Possible CMS Center for Innovation demonstration of new Frontier Health System model follows.

Project Organization  3 F-CHIP partners MHREF Montana Office of Rural Health (MORH) A formal network of 9 Montana frontier-eligible CAHs  The network of 9 frontier CAH CEOs drives the project  Consultants: Payment and Reimbursement Regulatory Quality Facilitator Technical assistance from DPHHS  F-CHIP Workgroup meets monthly or more often --9 CAH CEOs, consultants, HRSA/ORHP, CMS contractor and MHREF --via televideo (all 9 CAHs have televideo conferencing)

 CHESTER: Liberty Medical Center PHILIPSBURG: Granite County Medical Center   SHERIDAN: Ruby Valley Hospital BIG TIMBER: Pioneer Medical Center  FORSYTH: Rosebud Health Care Center  EKALAKA Dahl Memorial Healthcare  TERRY: Prairie Community Hospital  CIRCLE: McCone County Health Center  CULBERTSON Roosevelt Medical Center Frontier Community Health Integration Project Communities October 2010  BILLINGS  HAVRE  KALISPELL  BUTTE  BOZEMAN  GREAT FALLS  HELENA  MISSOULA 260 Miles 81 Miles 94 Miles  Counties shaded in tan have a CAH Hospital.

“The Tiniest of the Tiny” Montana’s 9 F-CHIP Communities Isolated=Located an average 172 miles from a tertiary center (range of 63 to 308 miles) Isolated=Located in a town with an average population of 932 (range of 410 to 1,944)—7 of the 9 towns have populations less than 1,000 Isolated=Located in a county with an average population density of 1.7 persons per square mile—3 of the F-CHIP counties have population densities of less than 1 person per square mile --Montana’s population density is 6.7 persons per square mile. If Washington DC had the same population density as Montana, there would be 405 people living there. Isolated=54% of Montanans travel more than 5 miles to see medical provider and 7% more than 50 miles. No public transportation. Problem for 65+ Medicare beneficiaries Small medical staffs (primarily physician assistants & nurse practitioners, some physicians) --average size=2 (range of 1 to 4) --in 2 CAH’s/communities, the medical staff consists of one PA Isolation magnifies workforce shortage issues (especially medical staff, RN’s, therapists)

Frontier Health Care—Very Low Volumes Data for the 9 F-CHIP CAHs Average daily acute census is.78 patients per day 7 of the 9 use their 25-bed CAH license primarily for LTC swing bed residents. --some frontier CAH’s not able to admit local LTC residents 8 of 9 operate a Rural Health Clinic. --CAH provider-based RHC’s (not FQHC’s) provide the bulk of clinic services in Montana’s frontier communities Only 1 of 9 does outpatient surgery, no surgery at the other 8 2 of 9 provide assisted living services; some frontier CAH’s would like to be able to provide assisted living to their communities One provides hospice services None of the 9 CAH’s provide home health services (a major gap) All 9 facilities have telehealth (interactive audio video) capability

9 F-CHIP CAHs—Struggling Financially Average patient revenue last fiscal year=$3.6M (range $1.4M to $6M) 8 of 9 lost money last fiscal year (range=$608K loss to $63K net income) --average loss was $175K 3 years ago, 3 of the 9 facilities made money and average loss was $108K --average annual losses getting worse --concern that frontier CAHs may start to close, eliminating access to frontier healthcare services (especially Medicare beneficiaries) All 9 F-CHIP CAH’s received county or health district subsidies last fiscal year averaging $271K. Subsidies range from $95K to $450K

Frontier CAH’s—Healthcare Service Delivery Centers For Their Communities Frontier CAH’s already provide a broad range of healthcare services. They’re already fairly well integrated. Generally, if a healthcare service is provided in a frontier community in Montana, it’s provided or coordinated by the CAH. Core frontier services: EMS, ER, acute, outpatient diagnostic and therapy, clinic, long-term care (swing bed or nursing home), preventive Optional frontier services: Home Health (replace with RHC VNS), hospice, assisted living

Frontier Health System-A New Model Fully integrated frontier health care service delivery organization Limited to the 71 frontier CAHs in the 4 frontier-eligible states only Create new Frontier Health System provider type Each frontier-eligible state (MT, AK, WY, ND) would create one or more care coordination networks of Frontier Health System organizations (like the 9-CAH F-CHIP network) --better management of chronic patients (diabetes, COPD, CHF, fragile elderly) --fewer ER, LTC, inpatient admits/readmits Pay For Outcomes reimbursement in addition to cost-based reimbursement --cost savings shared with CMS (no downside risk)

Frontier Health System Model— Key Access and Financial Recommendations Change bed limit from 25 to 35 --number of acute beds limited to 5 --could use additional beds for LTC swings --no one turned away for LTC services in frontier communities --one F-CHIP CAH generated an additional $623,000 per year by dropping its nursing home license and converting to 25 swing beds and serving LTC residents in swing beds Eliminate (or allow waivers to) 35-mile ambulance rule Allow reimbursement for therapies (PT, OT, speech) and home health aide services to VNS Medicare beneficiaries --provides access to preventive and therapy services to homebound age 65+ patients, often with multiple chronic conditions, who can’t leave home to see a medical provider Modify alternative coverage waiver to allow 25 (or, if changed, up to 35) beds for LTC swing beds

Other Activities EHRs/Health Information Exchange: HealthShare Montana/F-CHIP Supplemental Funding --important in identifying frontier patients with multiple chronic conditions Frontier Care Coordination Network pilot grant --MT/$525K, 3-years: To support a network (the 9 Montana F-CHIP CAHs) that focuses on care coordination for Medicare beneficiaries with multiple chronic conditions that reduces unnecessary ER, inpatient and LTC admissions and readmissions Frontier Community Health Integration Network Planning Grants --ND, AK, WY/$85K, one year: To evaluate regulatory challenges facing frontier CAHs and prepare frontier CAHs for a CMS frontier healthcare demonstration project Technical Assistance to the other 3 frontier-eligible states (North Dakota, Wyoming, Alaska)

Contact Information Larry Putnam, Project Director Frontier Community Health Integration Project (F-CHIP) 1720 Ninth Avenue Helena, Montana Phone: (406) —cell