The Medicare Rural Hospital Flexibility FLEX Program

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The Medicare Rural Hospital Flexibility (FLEX)
Program

• LCDR Karen Beckham
• Department of Health and Human Services
• Health Resources and Services Administration
• Office of Rural Health Policy
• June 9, 2008

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About the Office of Rural Health Policy (ORHP)

• Created in 1987 by Congress to address the
  problems that arose from the implementation of
  the inpatient Prospective Payment System (PPS),
  which led to the closure of an estimated 400
  rural hospitals.
• Advises the Secretary and the Department of
  Health and Human Services on rural issues.
• Administers grant programs, makes policy
  recommendations, and supports research on rural
  health.

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The Medicare Rural Hospital Flexibility (FLEX)
Program

• The Balanced Budget Act of 1997 (BBA) established
  the Flex Program and it was reauthorized in 2003.

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The Medicare Rural Hospital Flexibility (FLEX)
Program

• The Flex Program consists of two components
• A State grant program administered by HRSAs
  Office of Rural Health Policy (ORHP) to support
  the development of community-based, rural,
  organized systems of care in the participating
  States.
• Cost-based reimbursement for certified Critical
  Access Hospitals (CAH) by CMS

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The Medicare Rural Hospital Flexibility (FLEX)
Program

• 25 Million Appropriation Each Year
• Support 45 State Flex Programs
• Supports the Technical Assistance Services Center
  (TASC)
• Supports the Flex Monitoring Project

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The Medicare Rural Hospital Flexibility (FLEX)
Program

• GOALS
• Development of State Rural Health Plan (SRHP)
• Designation of CAHs in the State
• Development and Implementation of Rural Health
  Networks
• Improvement and Integration of EMS Services
• Improving Quality of Care

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What is a Critical Access Hospital (CAH)?

• A CAH is a small (25 bed or less) rural, acute
  care facility that provides outpatient,
  emergency, and limited inpatient services
• There are 1,292 CAH hospitals, currently
  certified as of December 17, 2007
• The number of CAHs per State ranges from 4 to 83.
• Five States (CT, DE, MD, NJ and RI) do not have
  certified CAHs.

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State Flex Programs Required Objectives

• State Rural Health Plan (SRHP)
• Performance Quality Improvement
• EMS
• Evaluation
• Networking
• Conversion of Hospitals to CAH status

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Current State of the Flex Program

• Ten Years of Funding to 45 States
• More than 1,200 CAHs Nationally
• Increased Focus on Health Quality
• Strong Links Between State Offices of Rural
  Health, Hospitals, EMS and Others

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Measuring the Impact of Flex and CAHS

• Developing performance measures for the Flex
  program
• Improving financial performance of CAHs
• Service expansion of CAHs
• Quality improvement
• Increasing use of HIT

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Showing the Impact of Flex and CAHs

• Improving Financial Performance
• Annual Report for all CAHs showing a range of
  financial status indicators
• Figures also aggregated to show national impact

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Measuring the Impact of Flex and CAHs

• Service expansion of CAHs
• Core CAH services Include
• Radiology
• Lab Services
• ER
• Swing Beds
• Outpatient Surgery and Rehab
• New Services Offered Since Conversion
• At least 20 percent added or expanded radiology,
  specialty clinics, outpatient rehabilitation, and
  laboratory services
• Others commonly added or expanded outpatient
  surgery and Rural Health Clinics

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Showing the Impact of Flex and CAHs

• Health Information Technology
• 2006 Survey Provides a Baseline of HIT
  Utilization in CAHs
• Flex will now measure against that

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To Err Is Human Building a Safer Health System.
IOM 2000

• Health care is a decade or more behind many other
  high-risk industries in its attention to ensuring
  basic safety.

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To Err Is Human Building a Safer Health System.
IOM 2000

• At least 44,000 people, and perhaps as many as
  98,000 people, die in hospitals each year as a
  result of medical errors that could have been
  prevented, according to estimates from two major
  studies.
• More than 7,000 deaths from medication errors
  take place both in and out of hospitals annually.

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To Err Is Human Building a Safer Health System.
IOM 2000

• Set explicit performance standards for patient
  safety through regulatory and related mechanisms,
  such as licensing, certification, and
  accreditation.
• Develop a a nationwide public mandatory reporting
  system and by encouraging health care
  organizations and practitioners to develop and
  participate in voluntary reporting systems.
• Health care organizations must develop a culture
  of safety such that their workforce and
  processes are focused on improving the
  reliability and safety of care for patients.

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The Inverse Relationship Between Mortality Rates
and Performance in the Hospital Quality Alliance
Measures

• If the lowest-performing U.S. hospitals performed
  as well as top-performers on specific quality
  measures, 2,200 fewer Americans would die each
  year, find researchers in a new study published
  in the July/August 2007 issue of Health Affairs.
• "Higher performance was consistently associated
  with lower mortality rates," say the researchers.
  Hospitals in the bottom quartile of HQA
  performance had a mortality rate of 10.8 percent
  for AMI, 5.0 percent for CHF, and 7.9 percent for
  pneumonia, while those in the top quartile had
  nearly 1 percentage point lower mortality among
  patients with AMI, 0.4 percentage point lower
  mortality among patients with CHF, and 0.8
  percentage point lower mortality among patients
  with pneumonia.

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Contact Information

• LCDR Karen Beckham
• kbeckham_at_hrsa.gov
• Main line 301-443-0835
• Fax [phone]
• http//ruralhealth.hrsa.gov