Strengthening the Health Care Infrastructure and Support Safety-Net Providers

Several provisions in the Affordable Care Act (ACA) address the health care infrastructure and the continued viability of safety-net providers. The ACA authorized two rural health demonstration projects to determine which payment methods and care delivery models will best ensure the ability of providers to meet their patients’ needs. It also authorized initiatives to improve cultural competency, support community health centers, and train community health workers to promote healthy behaviors among medically underserved populations.

Rural Community Hospital Demonstration: From 2004 to 2016, the Centers for Medicare & Medicaid Services conducted a five-year Rural Community Hospital Demonstration Program as authorized under the Medicare Modernization Act of 2003 and extended by the ACA. The ACA also expanded the number of participating hospitals from 15 to 30 and increased the number of participating low-population states from 10 to 20. The program tested the feasibility of reasonable cost reimbursement for inpatient services to small rural hospitals. It aimed at increasing the capability of the selected rural hospitals to meet the needs of their service areas.

Rural demonstration project: The Medicare Improvements for Patients and Providers Act of 2008 authorized a demonstration project to allow eligible entities to test new care delivery models in rural areas. The project’s goals are to increase access for Medicare beneficiaries and to promote care integration.

The ACA expanded this demonstration to allow additional counties and doctors to participate. The ACA also removed rural health clinic services from the list of services that a Critical Access Hospital must furnish in order for its county to participate. Finally, the ACA added physician services to the list of other essential health care services covered by the demonstration. As a result, eligible entities may be reimbursed for their reasonable costs for furnishing physician services.

Improvements in cultural competency: The ACA authorized the Health Resources and Services Administration to award grants, contracts, or cooperative agreements to enhance health professionals’ knowledge and skills in several areas, including cultural competency. They may be awarded to public and nonprofit entities to conduct training activities in cultural competency, public health, prevention, reducing health disparities, and working with individuals with disabilities.

Individualized wellness plans: The ACA created an individualized wellness plan pilot program. It requires the Department of Health and Human Services (HHS) to enter into contracts with ten community health centers (CHCs) to test the impact of providing at-risk populations who use CHCs with individualized wellness plans designed to reduce risk factors for preventable conditions.

Community Health Centers: The ACA requires the federal government to set aside funds for qualified CHCs. The centers will be allowed to contract with federally certified rural health clinics, critical access hospitals, sole community hospitals, or Medicare disproportionate share hospitals (DSHs) to provide whatever primary health care services those clinics and hospitals currently offer to people who are eligible for free or reduced-cost care, and who are eligible to receive those services at CHCs.

Training programs for community health workers: The ACA established a new training program for community health workers to promote positive behaviors (e.g., proper nutrition) and discourage risky behaviors (e.g., tobacco use) among medically underserved populations.

Reductions in DSH payments: The Medicaid DSH program provides payments to hospitals to support services provided to individuals with low incomes. These payments are critical to hospitals that serve patient populations with low incomes and are more dependent on government payers for their revenues than are other hospitals. The ACA requires the HHS secretary to reduce federal matching funds for state Medicaid DSH allotments to achieve specific savings targets.