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.



Language access

All levels of government should adopt policies ensuring that people who do not speak English or are limited in English proficiency have adequate language access to their health care provider.

All levels of government should ensure that professional language services providers are adequately trained, certified, and compensated.

Safety-net facilities

Millions of people receive access to health insurance coverage through provisions of the Affordable Care Act. However, millions still remain uninsured. Federal, state, and local governments should take steps to ensure adequate funding for safety-net providers to meet the needs of those who remain uninsured. All levels of government should ensure that publicly funded interventions are sensitive to communities’ particular needs and preferences.

Reductions in Disproportiate Share Hospital (DSH) payments

In light of the statutory reduction in federal DSH payments and the resulting negative impact on safety-net health funding, states should expand their Medicaid programs to cover all eligible individuals with income at or below 138 percent of the federal poverty level.

States that do not expand their Medicaid programs should have concrete and transparent plans for making up the safety-net funds that will be lost because of cuts in federal DSH payments. In addition, these states should demonstrate adequate safety-net capacity.



Federal and state governments should provide incentives for health educators to conduct training in medically underserved areas. They should also encourage physicians, nurses, and other health care personnel to practice in medically underserved areas. Incentives might include targeted scholarships and grants, student loan-forgiveness programs, and training stipends.

Federal and state governments should establish programs to train, recruit, and retain health care providers to work in rural and urban underserved areas. In addition, federal and state governments should target education subsidies to those health care professions in which practitioners are in shortest supply.

Federal and state governments should take steps to ensure that grants awarded to public and nonprofit entities to address certain curriculum issues among health providers (namely, cultural competency, public health, prevention, reducing health disparities, and working with individuals with disabilities) are rigorously evaluated and best practices quickly disseminated.

Rural access

Federal and state governments should help rural communities improve local access to health care by facilitating community-based discussions about potential solutions for access problems.

Federal and state governments should provide:

  • relevant demographic and utilization data;
  • appropriate incentives for managed care plans to extend needed coverage to rural areas;
  • incentives and assistance in recruiting and retaining all types of health care personnel; and
  • technical assistance to rural and underserved communities that seek to develop delivery systems and identify alternative ways to provide access to health care (such as telemedicine systems and improved transportation resources).

Uncompensated care

Federal and state governments should adopt policies that:

  • encourage nonprofit hospitals to provide free care to people who are indigent and lack access to health insurance coverage;
  • require or encourage for-profit and nonprofit hospitals to charge uninsured people discounted prices comparable to those negotiated with insurers; and
  • prevent both types of hospitals from engaging in onerous debt collection practices against people who are indigent or uninsured.

Federal and state governments should require hospitals to freely disclose information about charity care and about discounts available to qualified patients. In addition, federal and state governments should require hospitals to make information about their prices available to patients at any time so that they can anticipate the costs of care.

States should monitor the level of uncompensated care and other community benefits provided by nonprofit hospitals and evaluate whether those benefits are commensurate with the value of the tax exemptions the hospitals receive.

Wellness Plans

The federal government should ensure that people who receive individualized wellness plans through community health centers are monitored to ensure that the plans adequately respond to their health needs. Special attention should be given to those with multiple health conditions.

Training for community health workers

States and federal governments should ensure that community health worker education includes content on working with older adults.


Until health coverage is attained for all, federal, state, and local governments should support efforts to increase and maintain access to health care for the uninsured through innovative community-based approaches, like the use of volunteer health care personnel or donated medical equipment.

When health care is offered through voluntary efforts or provided using donated equipment, consumer protections should be maintained. This can be done by checking the adequacy of professional licenses, ensuring practice competencies, making sure that donated equipment meets standards, retaining patients’ rights to full and just compensation for injuries resulting from inappropriate care, ensuring that volunteers have adequate malpractice insurance coverage, and implementing other appropriate quality control measures.