Four additional hospitals have agreed to participate in the Pennsylvania Rural Health Model (PARHM), bringing the total number to 17, with six health plans also participating.
The Rural Health Model is an alternative payment model, transitioning hospitals from a fee-for-service model to a global budget payment. Payment for the global budget comes from multiple payers, including private and public insurers. Instead of hospitals getting paid when someone is admitted to the hospital, they receive a predictable amount of money at a specified time to provide services in the community. The goal is that through this change in payment model, the hospitals will be able to transform care locally to better meet the health needs of the community. This includes opportunities to assess items that may traditionally fall outside of the role of the hospital, such as transportation and broadband Internet access.
To support the continued evolution of this model, the Rural Health Redesign Center Authority (RHRCA) was established in May 2020 with a dual focus—to lead continued development of the PARHM, working in partnership with the federal Center for Medicare and Medicaid Innovation (CMMI) and the Pennsylvania Department of Health, and build solutions for rural hospitals and communities across the country to promote financial sustainability while improving the health of the populations in these communities. The RHRCA is building on lessons learned in combining payment transformation with healthcare delivery transformation to develop a sustainable model for community-based care, not only in Pennsylvania but across the country.
The PARHM is projected to serve more than one million Pennsylvanians in rural communities in 2021 and will have approximately $725 million in net patient revenue in the global budget model.
“The Rural Health Model is a transformative step that changes the financial model for hospitals in rural areas,” Rachel Levine, M.D., Pennsylvania Secretary of Health, said in a statement. “Rural hospitals are essential to the overall health of Pennsylvanians, especially during the COVID-19 pandemic. This is an important initiative to ensure that everyone across the state has access to quality health care within a reasonable distance from home.”
The total number of hospitals eligible for participation in the model is 65 based on the definition of a rural hospital developed by the Center for Rural Pennsylvania. With the 17 hospitals involved in the program, 26 percent of eligible hospitals will be participating in the program in 2021.
The Department of Health has developed three main strategies for improving health in rural communities including:
• Transforming healthcare delivery in rural communities;
• Improving the population health status in rural communities; and
• Creating healthcare services that match the needs of the community.
