Series
Webinar Summary
Rural healthcare organizations are moving from RHTP planning into state-specific implementation while also preparing for significant regulatory and reimbursement changes. In this on-demand Let’s Get Rural webinar, PYA’s Jane Jerzak, Tracy Purcell, and Kathy Reep examine how states are distributing Rural Health Transformation Program funds, what providers should consider as they pursue and manage awards, and why documentation and audit readiness matter from the start.
The discussion also covers provider-based department requirements, the proposed CJR-X bundled payment model, proposed 340B payment changes, 2027 obstetrical billing changes, Rural Health Clinic telehealth coding, and federal legislative proposals affecting transparency and rural healthcare funding.
Key Takeaways:
- RHTP implementation is state-specific. States may use direct, aggregator, or hybrid funding models, and application structure, eligible participants, timelines, and allowable costs can vary significantly.
- Organizations pursuing RHTP funding should understand their state’s model, read each RFA or NOFO carefully, align proposed outcomes with state objectives, and build documentation and audit-ready processes before implementation begins.
- RHTP recipients and subrecipients should document costs in real time, confirm allowability and grant-period timing, and understand whether Single Audit or other pass-through compliance requirements may apply.
- Hospitals should monitor provider-based department requirements, including existing public-awareness and patient-notice rules and the proposed attestation and NPI changes discussed during the webinar.
- The presenters reviewed the proposed CJR-X model, including a 90-day episode and quality and efficiency measures that may require hospitals to understand performance beyond the initial hospital encounter.
- The webinar also addressed proposed 340B payment changes, 2027 obstetrical billing changes, Rural Health Clinic telehealth coding changes, and pending federal legislation affecting transparency and rural healthcare funding.
Practical Next Steps
- Confirm the RHTP distribution model, procurement strategy, responsible agencies, and key implementation partners in your state.
- Review every applicable RFA, RFP, or NOFO, including eligibility, budget templates, allowable and unallowable costs, reporting expectations, and required outcomes.
- Establish documentation, cost tracking, approval, and audit-readiness processes before RHTP spending begins.
- Review off-campus provider-based departments for current compliance requirements and monitor the attestation and NPI proposals discussed in the webinar.
- If CJR-X may apply, assess relevant case volume, documentation, post-acute utilization, readmissions, and the ability to track cost and quality across the episode.
- Evaluate the operational and financial implications of the 340B, obstetrical billing, and RHC telehealth changes discussed in the session where applicable.
- Continue monitoring CMS guidance, final rules, and federal legislation because several items discussed were proposed or pending as of the recording date.
Frequently Asked Questions
How are states distributing RHTP funds to providers?
The presenters described two primary models: direct distribution, where the state pays providers or other eligible organizations through an application or selection process, and an aggregator model, where funds flow through an intermediary that subgrants or contracts with providers. Some states use hybrid approaches. Because each state designed its own implementation plan, organizations should confirm the model and procurement strategy used in their state.
What should organizations review before applying for RHTP funding?
Confirm the state’s funding model and key agencies or partners, read every RFA or NOFO carefully, verify eligibility, review budget worksheets and allowable-cost rules, and understand required outcomes. The presenters also recommended aligning proposed goals with the outcomes the state committed to achieve and preparing documentation and systems before an award is implemented.
What should RHTP recipients do to prepare for audit and compliance requirements?
Build audit readiness into the project from day one. The webinar emphasizes documenting costs in real time, confirming that spending is allowable and within the grant period, retaining support for decisions and calculations, and understanding whether Single Audit or subrecipient requirements may apply. Organizations should not wait until year-end to reconstruct how funds were used.
What provider-based department requirements did the webinar highlight?
The webinar reviewed existing provider-based requirements such as common licensure where applicable, clinical and financial integration, public awareness, signage, patient notice, and billing modifiers. It also discussed proposed national attestation requirements and separate NPI requirements for off-campus outpatient departments, including implementation questions hospitals should monitor.
What is CJR-X and why should hospitals pay attention?
The presenters described CJR-X as a proposed mandatory bundled payment model for certain lower-extremity joint replacement episodes beginning October 1, 2027. The episode would include the hospital service and 90 days of recovery or therapy, with payment performance tied to cost and quality measures. Critical access hospitals were described as outside the model, although the presenters noted that indirect effects may still occur through post-acute referral patterns and other downstream services.
What 340B payment changes are proposed for 2027?
CMS has proposed paying most 340B-acquired drugs at ASP minus 33.4%, while non-340B drugs would continue to be paid at ASP plus 6%. The proposal also includes an increase to the OPPS base rate for non-drug services as part of budget neutrality, with certain provider types exempt from the 340B payment reduction. Organizations should evaluate how the proposed methodology could affect drug reimbursement and overall outpatient revenue, including through broader managed care and reimbursement analysis. PYA’s rural healthcare work also specifically includes 340B program support.
How are obstetrical billing requirements changing in 2027?
Beginning in 2027, maternity care coding is expected to move away from the traditional global billing structure toward more granular reporting of prenatal care, labor management, delivery, and postpartum care. The change may affect documentation, billing-system configuration, payer contracts, patient billing, provider attribution, and physician and APP compensation models. Organizations should evaluate their current workflows and compensation methodologies before implementation. For a deeper look at the reimbursement and wRVU implications, see PYA’s OB/GYN Reimbursement Changes and Impact on Physician Compensation and its Healthcare Provider Compensation Services
How is Rural Health Clinic telehealth coding changing?
Rural Health Clinics will move from using G2025 for medical telehealth services to more specific service coding. Audio/video services will use modifier 95, audio-only services will use modifier 93, and RHC services will continue to be reported with the appropriate 52X revenue code, including 521 where applicable. The coding change is intended to provide more detailed information about the services delivered and, based on the guidance addressed for this transition, does not by itself change the RHC telehealth reimbursement methodology. Organizations evaluating the operational and reimbursement implications can also review PYA’s Telehealth & Virtual Care Advisory Services and Rural Healthcare Advisory Services.
Meet Our Presenters
This transcript was generated with AI and may contain errors or omissions. Please refer to the webinar recording for the most accurate version.
01:09 – Introduction and webinar overview
PYA Moderator 01:09
Good morning, everyone. Welcome to today’s episode of PYA’s Let’s Get Rural webinar series. Today’s topic is rural health transformation and federal policy updates. PYA is happy to present today’s webinar on these important topics. With that, I would like to introduce our presenters: Jane Jerzak, Tracy Purcell, and Kathy Reep.
02:25 – RHTP overview, funding, and state implementation models
Tracy Purcell 02:25
Today we’re going to talk about three important topics. We’ll cover rural health transformation. We’ll talk about some of the state implementation models, so you get an idea of what’s happening generally, and then we’ll focus on five states with specific examples of how they’re implementing rural health transformation. We’ll cover some regulatory updates, regulations that have passed and are going into effect either this fall or January 1, 2027, and then we’ll have some legislative updates. Look at things pending in Congress that you may want to be aware of and monitor. So let’s start with rural health transformation. RHTP is a $50 billion, five-year program that was created under the Working Families Tax Cut Act, and it’s administered by the Centers for Medicare and Medicaid Services, or CMS. All 50 states were eligible to participate, and CMS approved implementation plans nationwide. Each state designed its own transformation plan, and CMS gave states wide flexibility, so eligible activities and provider types vary significantly from state to state; don’t assume your state looks like your neighbors. We’ll give a few examples of state initiatives later in the presentation. States received roughly between $175 million and $230 million in funding for year one. One critical thing to note: CMS does determine if state initiatives are successful in year one, and they can alter funding in years two through five. This is important because if state funding is altered, CMS is the organization that’s responsible for redistribution of funds. As I mentioned, states were given the opportunity to submit implementation plans, and they were allowed to construct their plans in a way to address specific needs for the state’s rural community. Ideally, states would propose community-driven solutions and involve rural stakeholders in the design of their proposal, and hopefully involve stakeholders in the implementation of those defined initiatives. Many states use the HRSA Health Resources and Services Administration definition of rural to define what areas of the state could receive funds. CMS guidance includes a list of unallowable uses of funds, and some states have gone further and included additional uses of funds that were not eligible for funding. RHTP works as a reimbursement model. The grant is awarded. The grantee must spend their own funds, and then they’re reimbursed with RHTP funding. There will be additional state and CMS reporting requirements that have not yet been defined, so be aware of these reporting requirements. Make sure you have good documentation so that you’re prepared when those requirements come. There are five strategic goals that CMS defined for RHTP projects: workforce development is to attract and retain high-skilled healthcare workers by strengthening recruitment and retention of healthcare providers in rural communities. The goal is to help rural providers practice at the top of their license and develop a broader set of providers to serve a rural community’s needs, such as community health workers, pharmacists, and individuals trained to help patients navigate the healthcare system. The second goal is to innovate care, spark the growth of innovative care models to improve health outcomes, coordinate care, and promote flexible care arrangements, develop and implement payment mechanisms incentivizing providers or accountable care organizations to reduce healthcare costs, improve quality of care, and shift care to lower cost settings. The third goal is tech innovation, foster use of innovative technologies that promote effective care delivery, data security, and access to digital health tools by rural facilities, providers, and patients. Projects support access to remote care, improve data sharing, strengthen cybersecurity, and invest in emerging technologies. The fourth goal is sustainable access. Help rural providers become long-term access points for care by improving efficiency and sustainability. With RHTP support, rural facilities work together and with high-quality regional systems to share or coordinate operations, technology, primary and specialty care, and emergency services. The final goal is to make rural America healthy again, support rural health initiatives and new access points to promote preventive health and address root causes of disease. Projects will use evidence-based, outcome-driven interventions to improve disease prevention, chronic disease management, behavioral health, and prenatal care. Let’s talk about how states are operationalizing RHTP. We’ve observed two primary funding models that states are using to distribute funds: the aggregator model, where funds flow through an intermediary, such as a hospital association or rural health network, then the intermediary subgrants to providers or other community organizations, or the direct model, where the state pays providers directly through an application or selection process.
Tracy Purcell 08:30
This puts the compliance responsibility directly on the provider. Most states are using either the direct distribution or aggregator models, but some states are also using a hybrid approach. We’ll highlight a few of these. States had to categorize their state-level initiatives under the five CMS goals that we just reviewed. It’s important to understand which model and procurement strategy your state is using, so you can be ready to participate, Jennifer. We’re ready for our first poll.
PYA Moderator 09:06
Great. Our first question is: Which distribution model does your state use for RHTP funds? Direct state to provider, aggregator state to intermediary to provider, hybrid varies by initiative, or not sure yet. Remember, you must respond to the polling questions in order to receive CPE credit. You will have 30 seconds to answer. All right. Thank you for participating in our poll. Now back to Tracy.
10:07 – RHTP implementation examples across states
Tracy Purcell 10:07
So we got some interesting results from that poll. The good news is about 40% of you know exactly what your state is doing and what distribution model it’s using. The bad news is 60% of you need to go do some research this afternoon to figure out what distribution model your state is using to distribute funds. Thanks for participating in that poll. That was interesting. Before we discuss where states are in the process of implementation, I want us to recognize that the information on this slide could have changed in the last five minutes. Roughly 47 states are already in active implementation. Most have moved beyond planning, and procurement activities are extremely active this summer. Year one funds, which you’re applying for now must be obligated by the states by October 30, 2026. States must have awarded grants to an eligible entity, and that entity has until September 30, 2027 to spend those funds. The first state reports to CMS are due October 1, 2026, and that date is coming quickly. As of today, three states still have no funding opportunity posted, while leaders like Michigan have already made multiple awards. It’s interesting; some states have released 10 or more opportunities, other states release just one or two, so every state has a different strategy and objective for implementation. Now let’s learn more about RHTP and look at some examples of how states are implementing the CMS strategic goals. Let’s start by looking at North Dakota. North Dakota received $199 million in year one funds, and they’ve completed about half of their year one awards. North Dakota is using the direct model with funding going from the state directly to the provider. And notice I said year one awards. We indicated previously that this is a five-year program, and we expect states to receive funds annually. Some states are asking for applications and budgets for the entire five-year period, while others are focused on one-year programs and budgets. Organizations submitting bids for one-year grants need to recognize they may have to submit bids annually, and there may be some slightly different requirements in future years. Under the CMS goal of workforce development, North Dakota’s primary initiative is to strengthen and stabilize rural health workforce. There are three sub-initiatives that were open for this application. We’re going to highlight one: expanding rural healthcare rotations. This is a good example of a workforce initiative. North Dakota is really specific in their planning to award 15 grants of $200,000 each, totaling $3 million, and that is for year one funding. This application period is already closed, and North Dakota has indicated they received 24 applications. Not all state awards are this specific, so be sure to review the documents, budget templates, and any Q&As your state releases. North Dakota also has a good list in their RFA request for application documents of what costs are allowable and not. Examples of not allowable costs are capital projects, pre-award costs, meeting match requirements for other federal and local funds, supplanting existing state, local, tribal, or private funds, and that includes staff salaries. For more detail on the CMS allowable cost, refer to the PYA webinar “Let’s Get Rural” from January 15, 2026. It’s available on our website. Let’s turn our attention to Oklahoma. Oklahoma received $223 million in year one funding. Oklahoma is an aggregator-like state, and what I mean by that is that the state is designating a lead agency to act as an aggregator for each initiative. Some of these aggregators are the Oklahoma Healthcare Authority, Southwestern Oklahoma Development Authority, Oklahoma State Department of Education, the University of Oklahoma, and Oklahoma State University. In many cases, the aggregators will work to establish pilot programs and will expand the pilot programs to full realization in year four and five of the projects. Let’s look at how Oklahoma is moving forward with the Innovate Care initiative. There are nine sub-initiatives under Oklahoma’s Innovating the Care model. We’re highlighting one: maternal-fetal medicine telehealth expansion. High-risk pregnant women in rural Oklahoma encounter long travel distances and limited access to maternal-fetal medicine (MFM) specialists, most of whom are based in Oklahoma City. This initiative will expand the reach of MFM specialists through a tele-MFM network, connecting rural hospitals, clinics, and county health departments by equipping rural sites with connected ultrasound technology and telehealth capacity. Patients can receive specialty consultations, imaging review, and care coordinated locally.
Tracy Purcell 16:18
Funding will cover startup equipment and software. This initiative will be sustainable beyond the five-year RHTP program as a billable service under Medicaid and other payers based on proven effectiveness. One of the key cornerstones of the CMS RHTP program is sustainability. States generally are expected to demonstrate how initiatives can be sustained after the RHTP funding concludes. Tennessee is following the direct-to-provider model, and while I’m using the terminology direct-to-provider, community organizations and other groups are eligible under some of the grants. It isn’t strictly healthcare providers who are eligible. The state has been releasing RFAs, requests for applications, almost weekly since May 15, and all of the responses are due by August 3. Tennessee received $206 million for year one. All but one of the RFAs have been for five-year projects, and the state has indicated they are not planning on additional RFAs in year two through five. For providers and other organizations in Tennessee, this summer may be their one opportunity to apply for funding. The schedule of RFAs in Tennessee has been intense, with nine RFAs released this summer, and responses due generally 30 days after release. The state has also indicated that six RFPs will be released starting in August for more statewide projects, and we actually saw a few of those released this week. The goal of Tennessee’s Tech Innovation Initiative is to provide health technology solutions that strengthen healthcare delivery, expand access to care, improve operational efficiency, and enhance patient outcome. Tennessee has released two RFAs for tech innovation, one that’s short-range for only 12 months, and one for long-range, which is for 50 months. The short-range grant, the state has indicated that they intend to award multiple grants totaling $33 million, and it’s intended to support one-time procurements such as technology purchases and software equipment purchases. The long-range grant, excuse me, for the long-range grant, the state has indicated that they intend to award multiple grants totaling $59 million. The long-range grants are more operational in nature, and are to be implemented over several years. The state has also clarified that you can apply for both the short and long-range grants in this opportunity. The state of Kansas has received $221 million for RHTP Year One funding. They are using a direct model with funding going from the state directly to the provider. The state has also contracted with four organizations to assist with implementation activities, such as administration of program infrastructure support, consumer surveys, project management, and financial oversight, including audit-ready documents. While the state is issuing the grants, these four organizations will help implement and monitor the initiatives. This will relieve some of the administrative burden from the states and should provide reporting consistency across the grantees. Under the Kansas initiative to secure local access to primary care, There are six sub-initiatives. We’ll focus on one that we found interesting: the Revenue Improvement Program. This program includes three projects to assist rural providers in increasing revenue and improving their operating margin. For step one, the state will contract with a consulting firm to perform statewide rural commercial rate analysis. The goal is to position providers to negotiate for more favorable reimbursement without driving up employer healthcare costs. Step two will launch the revenue cycle support and credentialing organization to provide outsourced services for rural providers who lack local resources to effectively manage their revenue cycle. Funds will be used for initial startup costs, allowing the organization to charge significantly lower fees for its services to rural hospitals. Step three will fund the development of the infrastructure necessary for provider networks to pursue and perform under direct-to-employer contracts. The last state we’ll look at is Arkansas. Arkansas has released all of their NOFOs, Notice of Funding Opportunities. They received $208 million in year one funding. They are using the direct model with funding going directly from the state to the provider or other community organizations. The last set of applications is due in Arkansas tomorrow, July 31. This is another example of a state where applications are for year one funding, and there’s very little mention of years two through five. Let’s look at one of the Arkansas initiatives. Under the CMS goal, Make Rural America Healthy Again, Arkansas’s initiative is called Heart: Healthy Eating, Active Recreation, and Transformation.
Tracy Purcell 21:54
This initiative seeks to strengthen Arkansas’s population health backbone, focus on children, families, and chronic disease prevention. There are six sub-initiatives worth $8.4 million in year one, and we’ve listed the sub-initiatives here. When you look at the sub-initiatives, it sounds a lot like farmers’ markets and walking tracks, and there is some of that. One sub-initiative impact is for chronic disease prevention and management programs, integrated clinical, behavioral, and social service delivery models, value-based care pilots, and coordinated care interventions, and data systems supporting analytics, risk stratification, and outcome tracking. We want to highlight this as an example of why it’s important to review every RFA or NOFO in detail. While you may think the Heart Initiative doesn’t apply to healthcare providers, there is an opportunity here for healthcare providers within the Impact Initiative. We’re ready for our next polling question, Jennifer.
PYA Moderator 23:03
All right. Our second question is: Has your organization applied for funding? Yes, no, or working on it. Remember, you must respond to the polling questions in order to receive CPE credit. You will have 30 seconds to answer. All right. Thank you for participating in our poll. Now back to our presenters.
Tracy Purcell 23:56
Well, that’s exciting. Since over 50% of you have applied for funding, congratulations on submitting your application. We look forward to hear about your awards in the future. Jane,
24:09 – Applying for RHTP funding and audit readiness
Jane Jerzak 24:09
Thanks, Tracy. Boy, there’s a lot going on with RHTP, and there’s a lot to think about. All of you that have applied, that’s great, as Tracy said, but those of you that are working on it, next steps definitely confirm your state’s model. Understand who the key players are in your state, whether it’s your Medicaid agency, the rural health office. You really need to know how the money is coming from the feds to your state and ultimately to you as a healthcare provider. Remember, these funds are for you. It’s for your organization, for transformational work. So please make sure you understand what’s happening in your state. Sign up for any listservs in your state. There’s a lot of listening sessions, Q&A sessions. You and people in your organization really need to focus on making sure you get all the information you need from those sessions. As those applications are posted, read them all because some of them you may not think apply to you, but typically in those applications, it clearly states who is eligible to apply. Is it a rural hospital? Is it another type of healthcare provider? It will tell you if it’s applicable to you and if you should be applying. Now, a little point about the budgets and the allowability of costs. As Tracy said, all of these applications come with a lot of rules and regulations. So you really do need to study the budget worksheets. There are Excel budget worksheets typically that are provided. What costs are allowable? What aren’t? Oftentimes, you will see capital costs limited. You will see administrative costs to be allocated limited. You will see services sometimes that relate to billable encounters not allowable. So you really need to think about funding for change, for project improvement, for things that are moving your organization from current state to a future state, not doing services as usual. So there’s a lot of pitfalls or things that you need to watch out for as you’re doing your budget, understanding the rules of what is and what isn’t allowable. Same thing with the metrics, your goals. You’re going to need to state what are your goals. What’s going to be achievable in terms of your one toll gate, your two, your three. What I would suggest is you go back and see what your state told the federal government they were going to do. What outcomes did they tell the federal government they were going to achieve? Your application may be stronger if you directly point the things that you’re going to do and the outcomes that you think you are going to achieve that directly align with what the state told the feds, so you’re all in alignment, so that you have the best success at getting year two, year three, etc. funding. So those are just kind of some clues in terms of being ready. Then, of course, there’s audit readiness, and as you do your budget, if your grant is approved, think about setting up your systems on day one, ready for an audit, and that really gets us to the next slide with respect to the obligation for what’s called a single audit. If you’re a small critical access hospital, you may never have had to hear about this word as what’s called a single audit. If you’re part of a government entity, perhaps you’ve heard of this, but if you have a $1 million or more in federal awards. It triggers what’s called a single audit. That’s kind of a layer above your normal financial audit. Your financial auditors would do this work, but it’s another opinion, and it’s another set of checks and balances, compliance rules. Did you spend the money appropriately? All kinds of extra rules. If you are not at the $1 million threshold yourselves as an economic entity, you may trigger some additional audit requirements by being what’s called a subrecipient. Maybe that aggregator that Tracy talked about got the $1 million in their contract to you as a subrecipient. There also will be some rules so that they will pass their single audit. So if you’re a subrecipient of funds, you’re going to have to follow a lot of the rules to support your aggregator passing those tests. So, document in real time. Make sure all those costs are allowable. Go backwards and forwards on your budget.
Jane Jerzak 29:38
Make sure any thresholds are met by the way your spending has to be done before the year ends. You can’t accrue things. You can’t, in a sense, hold things for the next year. It must be spent in the grant period. Very important. So you have to really plan. As you get your grant for how you’re going to be spending your money and when you’re going to be spending your money. If we’ve learned anything from the provider relief fund, a lot of the pullbacks to the federal government were really stemming from lack of proper documentation on how those monies were spent, not necessarily intentional misuse. So document, document, document from day one, making sure that you’re doing everything that relates to an allowable cost. Again, look at the capital, look at administrative, and look at services that are billable, and in your contract, those things may have thresholds or be entirely non-allowable. A few other things that we’ve learned from working with various organizations is if you have physicians with contracts that have a non-compete clause, those physician costs to do some of this work may not be allowable, so be careful and do a lot of reading in terms of the allowability before you launch into day one of your contract. Tracy,
Tracy Purcell 31:21
Thanks, Jane, and one thing I did want to mention about the audit requirements, PYA did post an article last week specifically on single audit requirements that may be helpful to you. You can find that on our website.
Jane Jerzak 31:36
Thank you, Tracy. That’s a great callout. One
31:39 – RHTP program concerns and evolving federal guidance
Tracy Purcell 31:39
other thing we wanted to mention related to RHTP. There was a letter sent to CMS Administrator Oz last month from a bipartisan group of four senators, Bennett, Collins, Padilla, and Hickenlooper, supporting RHTP but flagging some concerns. And I think these could be concerns that you’re familiar with as well. They applauded CMS’s recent flexibility on workforce recruitment and retention, technical assistance, and alternative payment model supports, but they’re concerned that larger systems have capacity to compete for and manage grants, while smaller independent rural providers who need the help the most lack the staff and infrastructure to participate. They want the program to reach the frontline providers, regardless of the setting. They suggest going further by lifting the cap on capital improvements, which we’ve heard from numerous providers. Clarify direct payments to providers. Allow funds to enhance reimbursement and offset uncompensated care, revisit EHR and health IT limits, and protect access for small providers. A link to the letter is on the slide. Remember, RHTP is a five-year program, so rules and guidance can and most likely will change during that time. We’ll continue to monitor federal guidance and let you know when new guidance is issued and there are things you need to be aware of. I think it’s time for our next poll question, Jennifer.
PYA Moderator 33:16
It is. All right. So question three is: Is your organization currently building or updating audit-ready documentation for federal grant funds (RHTP) or otherwise? Yes, processes are already in place. We’re building them now. Not yet, but we plan to, or not sure where we stand. Remember, you must respond to the polling questions in order to receive CPE credit. You will have 30 seconds to answer.
Tracy Purcell 34:23
We’re seeing a lot of not sure where we stand. I’ll just make sure that you know PYA is going to continue to put out additional information about being audit ready and prepared for those audits in the future. So keep an eye on the website, sign up for the listserv. We’ll get more information out to you about this topic in the near future.
PYA Moderator 34:44
Thank you for participating in our poll. Now back to the presenters.
34:51 – Provider-based departments and 2027 regulatory updates
Kathy Reep 34:51
Now that we’ve covered RHTP and where we are with it to date, I’m going to jump in and kind of do a little bit of my ‘Uh-oh, what’s happening? The sky is falling’ discussion in terms of some regulatory updates that you need to be aware of. There is a lot going on. I think if you monitor what’s being issued in terms of proposed and final rules, we’ve got proposed rules related to inpatient PPS, inpatient rehab. We’ve got proposed rules also related to outpatient PPS and home health. We actually did yesterday get final rules related to skilled nursing and inpatient psych. So the fiscal year rules are beginning to drop. I did check this morning, and the inpatient PPS rule is still sitting at OMB. So I would think tomorrow would be the earliest that we would see that. But when we take some of the rules that have been published and we start looking at what are some of the key issues impacting providers, I just wanted to touch on a few. So the first one I want to touch on actually stems back to, I guess I would say February 3 of this year, when the president signed the Consolidated Appropriations Act of 2026. This was Section 6225, and the requirement under this particular provision, there were two components to the requirement. First is that all hospitals that have an off-campus outpatient department, a provider-based off-campus department, submit an attestation that you meet the requirements for provider-based status. The second component we’ll talk about both of these individually, but the second component was that for all off-campus outpatient departments, you would be required to obtain a national provider identifier. This is your NPI. You have the NPI for your hospital, but this would be actually requiring you to get a separate NPI for all off-campus outpatient departments. I’m going to pick on that one in a minute, but let’s go back to the attestation to start with. Currently, on the issue of the attestation, there is not a requirement to submit an attestation that you meet the requirements for provider-based status. However, many hospitals have submitted them voluntarily in the past. I urge you to look at the template that we’ve included on the slide and provide comments on it, because this is a draft template that CMS is proposing for the provider attestation. Currently, the templates that are used are MAC specific. They are developed by your Medicare administrative contractor. This would be requiring an attestation form that is a national format that everyone would be using. If you have been one of those hospitals that voluntarily attested to your compliance with the requirements for provider-based status prior to January 1, 2026, you would be required to re-attest under these proposed rules, so that essentially anyone providing services before the effective date of January 1, 2028, you would have to submit a new attestation either this year or through the end of 2027. Interesting verbiage in the proposed rule, and I hope someone comments on this, was a statement that said that new departments operating after January 1, 2028, would be required to submit the attestation during the two years prior to when billed services are delivered, I’m not sure how you really do that. But again, essentially, you’re going to have to have that attestation and have it reviewed prior to the actual provision of services. But you would have to do this prior to… I don’t think very many people are going to be doing it two years prior to delivering services, maybe a month, but we’ll see where this goes. There was also a requirement for recurring attestations, and currently CMS is saying we don’t expect providers to need to re-attest more frequently than every five years, but at least we’ll see where it goes in terms of a final rule. We’re going to talk about the requirements for provider-based in just a minute, but the other component that was in the Consolidated Appropriations Act was that all off-campus departments get their own national provider identifier, and also update PECOS, the Medicare Provider Enrollment, Chain, and Ownership System. The issue with this is that the regulations addressing the requirements for provider-based are written at the location level. What does it take to be a provider-based location or an off-campus provider-based location? The new legislation in the Consolidated Appropriations Act uses the term outpatient department.
Kathy Reep 40:43
Department is also what was used in the proposed rule that CMS published. So my concern is if I have a location, a particular address, am I getting multiple national provider numbers for multiple departments within that building, so that I have a building that perhaps houses a hospital outpatient clinic, a hospital outpatient lab, a hospital outpatient imaging suite. Do each of those require separate national provider identifiers, and each of them have to meet the requirements at the department level as opposed to location level. And then the other area to look at from a billing perspective is what happens to the patient who goes to the clinic, gets an order for imaging, and goes to the imaging suite, is that two bills that you’re going to be generating as a provider, and therefore are we looking from patient responsibility? I’m getting a bill for the multiple services provided on the same day, but by the same entity, but a different provider number because of department versus location being in the term that we’re using, so I do think this is worthy of comment. This was actually the implementation of Section 6225 was included in the outpatient proposed rule, and comments on the outpatient proposed rule are due tomorrow, August 31. So, just, oh no, they’re due August 31, not tomorrow, not July 31. I was just thinking, yes, they’re not due until the end of August. So you do have some time to look at that. Let’s look at the requirements for provider-based, and I’m doing this in two components. Recognize that these rules apply not only to general acute care hospitals, but also to critical access hospitals. So, number one is the provider-based facility and the main provider must operate under the same license unless there’s a state requirement for separate licenses. So, you have to look at what your state requires. The provider-based facility and the main provider are clinically integrated, financially integrated. The provider-based facility is in compliance with the rules and regulations of the hospital, and you’re following the same compliance protocols, etc. The area I wanted to emphasize is public awareness, and this is that you are held out to the public as a part of the hospital. This becomes a real issue when we start looking at signage for a provider-based facility, particularly an off-campus provider-based facility, but these are the requirements for all provider-based departments on campus or off. But you are held out to the public as a part of the hospital. We have more and more hospital systems today, and you cannot say that this provider-based department is a part of X Y Z hospital system because you can’t be provider-based to a system because the system isn’t a provider. So this is a requirement now, and I urge you to spend some time looking at your signage, and you might say it is a part of X Y Z Hospital, which is a part of X Y Z Hospital System, but you do need to make sure that it is clearly shown to the public that this particular facility is a part of a hospital, not a system. So something that you need to look at, and these are current requirements. These are not proposed, so you need to make sure that you are moving forward with this as well. Then we get into the issue of off-campus provider-based departments. Obviously, along with the on-campus, you must operate under the ownership and control of the main provider. The administration and supervision applies so that the off-campus department is under the direct supervision of the main provider and operated the same as any other department of the hospital. There are currently requirements related to location, saying that an off-campus provider-based department must be located within a 35-mile radius of the campus of the main provider. There are some exceptions related to the zip codes of the patients that are served at the provider-based location versus the actual main provider, and from a billing perspective, you are identifying your off-campus status using the correct modifier, either PO or PN.
Kathy Reep 45:59
But I do want to call your attention to the fact that in the inpatient proposed rule, and we’re waiting to see the final rule any day now, they did propose a change to that 35-mile radius of the campus, and that would only be applicable to outpatient departments and to the end-to-end patient facilities that are considered provider-based. However, they are proposing that the zip code test would not be applicable to the inpatient facilities. So it’s something that you need to take a look at. Something that if this is the way you are qualifying or considering yourself qualified for provider-based status, please look at the proposed rule and then be ready any day now for that final rule. The other requirement that we have for off-campus provider-based departments is that you provide a written notice, not just a sign behind the desk, but a written notice to any beneficiaries who are coming in for care that explains to them that this is a hospital-based department, and therefore they will be receiving a bill from the physician. They will be receiving a bill from the facility, and that their co-insurance obligation would apply to both the facility bill and to the physician service, as opposed to if they are merely going to a physician’s office, they’re going to get a single encounter claim and a single co-insurance obligation. You do have to make sure that you provide them that written notice, and it is not something that is just posted, but again clearly provided to the patient as it relates to the provider-based. One of the provisions that was included in the inpatient proposed rule was, I guess, when we had TEAM, we thought TEAM was going to be it, and that we had hospitals that were included in the TEAM model, Transforming Episode Accountability Model. Yes, and what we now have is the CJR model, which was in effect for a number of years, is coming back and coming back as a mandatory model. So again, we’re going to find out shortly what they’re actually doing with this. But Jane, do you want to kind of walk through the provisions?
48:51 – CJR-X bundled payment model and quality metrics
Jane Jerzak 48:51
Sure. So this acronym CJR-X, you’re going to hear a lot. This is basically a bundled payment methodology for all of you as hospitals that are getting paid under the prospective payment system (IPPS and OPPS). So the first thing to remember is if you’re a critical access hospital, this would not apply to you. So that’s kind of a bit of good news. This model also does not apply to hospitals in Maryland. Hospitals with 31 lower joint extremity episodes in this baseline period. We’ll go through that in a minute. And if you are part of the TEAM model already, as Kathy mentioned, you’re going to be in that model until 2031. So if you’re not a critical access and you do total hips, total knees, etc. lower extremity stuff, please pay attention. This is for you. So, beginning October 1, 2027, we’re going to be in a sense subject to both quality and efficiency metrics on this total joint replacement model, covering the initial surgery, that initial hospital stay, whether it’s inpatient or outpatient, and the first 90 days of recovery or therapy. So that’s a pretty long period of time that you’re responsible for the cost of care and the quality of care. So, and
Kathy Reep 50:37
I just want to make a comment, it’s 90 days for CJR-X. TEAM is only a 30-day episode, so this is a significantly longer period of time that providers are going to be responsible for the services provided to the patient.
Jane Jerzak 50:53
Absolutely, Kathy, and this speaks to the quest for longevity of care rather than transactional care, we did something to you. We got paid. Now go on your merry way. It’s really designed to hold the core facility, the place where this stuff was done, accountable for what happens after that patient leaves the facility. So our episodes are both DRGs. There are four DRGs that are going to be part of this episode. It’s the major joint replacements with and without major comorbidities or complications, as well as hip fractures replacements related to hip fractures. Again, with and without complications or comorbidities, the two CPT codes – the total knee arthroscopy and the hip arthroscopy – those are if this service was done in an outpatient environment where you would be getting an APC payment rather than a DRG payment, so this is your universe of services starting in October 2027. So this stuff is really going to be complicated in terms of calculating how you’re ultimately going to get paid for these procedures. Number one, business as usual when you bill it, right? So it’s going to all be in the back scene, calculating all of this stuff in terms of efficiency and quality, which I’m going to go into in a minute. But the billing normally is what you’re going to do. Everyone’s going to just keep plopping on all their costs, and when I mean everything, it is if they went to a skilled facility or an LTC or a rehab hospital or home care or different encounters that they had for therapy. It is almost everything that happened to that patient once they walked out of your… assuming they had one of these procedures. Okay, so there’s going to be a withhold of 2%, a discounting of 2% saying, “Hey, we do need that potential savings. There’s going to be a stopgap where you wouldn’t gain or lose more than 20% unless you’re a safety net hospital or a rural or sole community. One of these special cases. So if you’re a special case hospital, your upside and downside threshold is much narrower. It would be about 5%. So then we get into the quality metrics. There’s something called a composite quality score. Composite quality score. That composite quality score, you need to get to a certain threshold, and if you’re above a certain baseline threshold, then you would get efficiency savings that you generated. Okay, if you miss on that threshold of quality, even though you are more efficient, you do not get the extra money. Okay, so what do we mean by those quality metrics? Well, the quality metrics are going to look at risk standardized complication rates. What do we expect for these types of care? It’s going to look at patient-reported outcomes. So patients are going to provide feedback on pain, on physical function, and you’re going to, in a sense, be judged by your patients on how well they’re doing versus how well they expected to be doing. So a lot of that relates to really setting the proper expectations for patients. Okay, it’s going to look at hospital visits within seven days of surgery, coming back in either observation, coming back to the ER. It’s going to look at HCAHPS scores for inpatients as well as the outpatient scores if it was done in an outpatient or ambulatory surgery setting. Okay, so we again need that first toll gate. Each patient is going to be assigned an expected factor for this. Each patient’s expected factor is going to be based on a bundling, a behind-the-scenes bundling of 29 different factors. So this is getting really complicated. It’s going to look at hospital-specific factors like what is your hospital size, is your hospital treating a lot of Medicare and Medicaid beneficiaries, so that’s kind of a hot. And then it’s going to look at 27 patient-level adjusters. 27, everything from the socioeconomic factors, age, dual eligibility, what services that patient had prior to the surgery, the clinical complexity, HCC hierarchical condition code scores, etc. So, if you are treating a low-risk patient, you’re going to be expected to spend less. And of course, if you’re treating a complex patient, your spend level based on these 29 factors will be expected to be higher. So there shouldn’t be any what I would call discrimination on taking patients because they’re highly complex.
Jane Jerzak 56:57
I know this has been kind of discussed in the past, because now with these 29 factors of quality, those comorbidities should be factored into the equation, assuming you have it documented in the record. So you must be very careful about documenting all the comorbidities, complications, social factors, so that your 29 factors for each and every one of these patients can be assigned properly. Now, if you are a rehab hospital or you operate a rehab hospital, you may be concerned because the rehab hospital cost and the LTC, the long-term care hospital cost, of course, raises tremendously the cost of these lower extremity joint cases. So, if this patient at all can stay out of a setting like that, and either be home with home care and therapy in a SNF because the costs would be less than a long-term care hospital or rehab. That would save dollars, make those cases more efficient. If you’re a critical access hospital, as I said, it wouldn’t apply to you directly, but if you do have a swing bed program that was the recipient of some of these cases post-hospitalization, you could see your volume decrease in the swing bed environment. The other thing to note is these metrics and this kind of quality composite engine will look at metrics in terms of absolute quality as well as improvement from the past. So here it says your baseline is from 2023 to 2026. That’s your baseline, so you will be in a sense given credit, improving since that baseline period, as well as your absolute metric to fold all of this in. So stay tuned. We could spend an hour on this, and we may in the future if there is a need. But if you are part of this program, this is absolutely something you want to pay attention to. Look at how many cases you’ve had in your baseline. Understand how you’re documenting that care. Understanding if you are tracking care outside of your facility. Understanding if you know if those patients are getting readmitted if they’re showing up in your ED, sitting in observation, and why, and really creating with your physician community workflows that will make you successful at this. As with the TEAM,
Kathy Reep 59:57
That, because the baseline period goes through September of this year. You’re probably not going to actually see your data until maybe November, December at the earliest, and this would be effective in October 2027. So you’ve got some work to do, depending on how exactly,
Kathy Reep 1:00:17
absolutely,
Jane Jerzak 1:00:18
exactly. And I was just going to do a callout. We’ve built at PYA a model for ingesting claims coming from CMS, and really helping you to understand with the TEAM model at this point, because that’s really all that’s in place. Helping to understand by physician, by patient, where the spend is happening and why, to really help you to understand and drill into how you could potentially improve through different process and other workflow measures. So keep that in mind as well. So that’s it with respect to this program. It’s very complicated. Off to a new polling question number four.
PYA Moderator 1:01:06
Okay, our fourth question is: Is your hospital preparing for the mandatory CJR-X bundled payment model effective October 1, 2027? Yes, we’ve already started. We’re just beginning to assess impact, not yet, but we plan to. Not applicable to our hospital. Remember, you must respond to the polling questions in order to receive CPE credit. You will have 30 seconds to answer.
Tracy Purcell 1:01:36
Hey, Jane, we had a question in the Q&As that I thought maybe you could answer quickly. Does CJR-X include ASC facilities?
Jane Jerzak 1:01:48
Yes, because those would be coded as 27447, or whatever the code is for a knee arthroscopy, as well as the hip.
Tracy Purcell 1:02:03
Great, thank you,
Kathy Reep 1:02:04
Jane. I don’t think it’s on an ASC claim. I think these are hospital claims.
Jane Jerzak 1:02:11
Oh, these are only hospital claims.
Kathy Reep 1:02:13
Believe so.
Jane Jerzak 1:02:14
Okay, it’s just then the readmissions to an ASC are part of the cost of this.
Kathy Reep 1:02:21
Exactly, if something needs to be redone or something like that within that 90 day period, that then it
Jane Jerzak 1:02:27
is applicable. So thank you for clarifying. Yes, it’s applicable to services post that anchor service, but the anchor service is a hospital service in an outpatient,
Kathy Reep 1:02:40
right?
Jane Jerzak 1:02:41
And here we’ve got some results. So, 43%, it’s not applicable, but the rest of you it is. So, this is really for the 60 or odd percent of you something that you do need to now start studying, understanding what are your hospital volumes for these services, and how are you going to prepare to the 17 of you that are already started preparing? And it looks like the rest of you are planning on doing something.
Kathy Reep 1:03:14
Well, and for those who say break
PYA Moderator 1:03:16
in, sorry, Kathy, we’re going to close the poll. Thank you for participating. And now back
Kathy Reep 1:03:21
for those who say it is not applicable, there could be some repercussions in terms, as Jane mentioned, like with the swing beds, etc.
Jane Jerzak 1:03:30
Thank you.
1:03:31 – 340B payment changes and site-neutral imaging
Kathy Reep 1:03:31
Let’s keep going about some rules that are out there, and let’s see if I can. I’m not sure that I have any good news today, so I’ve got to do a little bit of a history lesson. Need to go back to 2018, I believe it was, when CMS implemented a payment reduction for 340B drugs provided in acute care hospitals. These were your separately payable drugs, and they opted to reduce the reimbursement for 340B drugs rather than the current average sales price plus 6%. They said for 340B drugs it would be average sales price minus 22.5%. Hospitals were not happy with that. They litigated it. It actually wound up going all the way to the Supreme Court. Hospitals were victorious, and the reason the hospitals were victorious was because the actual legislation that provides for the 340B program and calls for how you calculate reimbursement related to these drugs indicates that CMS is to conduct a survey of acquisition costs. We’re going to talk more about that survey, the requirements federally in a minute. But CMS did not conduct a survey. They merely said we think minus 22.5 is a good number, so we’re going to use that. Well, hospitals litigated. Hospitals were successful, and so for the last year or so, CMS has paid average sales price plus 6% for all separately payable drugs, 340B and non-340B. CMS, beginning of this year, moved forward with a survey, a drug cost acquisition survey, because again, the Supreme Court said if you want to adjust these prices, you’ve got to do a survey. They did a survey. Only about 43% or 44% of the hospitals who were eligible hospitals to participate in the survey actually responded. A large number of those actually provided what has been referenced in the final rule as a form letter, saying why they were not providing the detailed information that CMS requested. So, out of the 44% of eligible hospitals that responded to the survey, only about 30% of those actually submitted usable acquisition cost information. CMS did not step back and say, “Oh, it’s not usable survey. They basically said, “We are going to move forward and use the survey results. They had two findings from the survey. First of all, non-340B drugs, where you are currently reimbursed average sales price plus 6% they indicated hospitals reported that they were acquiring those drugs somewhere around average sales price plus 2.7 or 2.8. Luckily, CMS said we’re not going to do anything with those drugs right now. We’re going to leave it at ASP plus six, but it’s something that they will revisit in the future. But the survey showed. I feel like this is like a game show, but the survey showed that hospitals acquired 340B drugs at approximately 33.4% below average sales price. Remember, we were upset at minus 22.5, and what they are now proposing for 2027, which begins in January, would be paying 340B acquired drugs at ASP minus 33.4. The survey that they did would be done every four years, and then we do have certain providers who are paid under OPPS, but are exempt from the reduction. That would be your rural sole community hospitals, your children’s hospitals, and your PPS-exempt cancer hospitals. Although they’re paid under OPPS, there is a settlement annually. So, another requirement that is going to be interesting is a modification to the way you bill. You would be required to put a modifier on all drug claims. They’re bringing back yes, it was gone, and now it will be back again. The JG modifier, which would indicate a 340B drug subject to payment reduction, a TB modifier that would be 340B-exempt that would be paid at ASP plus six, and then XX is a placeholder. They haven’t published what the actual modifier will be. They’re just saying XX for now, and those would be all separately payable non-340B drugs. Now the issue here, and where I think it is real important for providers who are 340B providers to comment on this rule and to do an analysis of the impact on their organization, is that this is being done in a budget-neutral manner.
Kathy Reep 1:09:28
Therefore, CMS is saying I need to reduce the spend on 340B drugs to average sales price minus 33.4, but I’m going to give you back the savings. I’m going to give the savings to everyone, whether you are eligible for 340B or not. And they are saying that they would increase your outpatient base rate for non-drug services by about 8.4% so significant bump in the base rate for everybody. A significant reduction in payment for 340B drugs. You need to determine whether that 8.4% increase in non-drug payments. How does that compare with the minus 33.4? And to do what level of impact is it for your organization? Recognize that there are providers who could never qualify. Let’s say a for-profit entity that could not qualify for 340B. They are going to get that 8.4% increase in their base rate, and I don’t think they’re going to complain. So something you need to take a look at. Now I got to jump to the law. The law says, as it relates to 340B drugs, that the secretary shall conduct periodic surveys to determine the hospital acquisition cost for each specified covered outpatient drug for use in setting the payment rates, to generate a statistically significant estimate of the average hospital acquisition cost for each specified covered outpatient drug. The law does not say go out and apply it across the board. It says you’re setting a rate for each drug. The proposed rule that CMS published, I’ve even given you the page reference says we seek comment on our proposal to apply a single discount factor to the ASP for 340B acquired drugs in lieu of calculating individual acquisition cost amounts for 340B acquired drugs. I don’t think we usually get away with saying, I know that’s the requirement in the law, but I decided not to follow it. So I do think this is worthy also of a comment. It might at least postpone this for a year or so, while CMS actually looks at making the analysis drug-specific, as opposed to just an across the board minus 33.4. Another provision that was included in the outpatient rule that I wanted to call your attention to is this is for hospitals that are paid under the outpatient prospective payment system, and for your grandfathered or those off-campus departments that were in existence on November 2, 2015. They are coming along and saying that we are going to reduce your payment for imaging services provided without contrast. Essentially, they will equate the payment rate under the outpatient system to what you would have been paid under the physician fee schedule. So they’re going to reduce your outpatient payment by 40. You would be reduced by 60% and paid 40% of OPPS. This is not being done budget neutrally. It will not apply to Sole Community Hospitals, and we’ve given you on the slide the APCs that this would be applicable to, and this would be effective January 1. So something that you do need to take a look at.
1:13:22 – 2027 obstetrical billing changes
Jane Jerzak 1:13:22
Thanks, Kathy. Now we’re back to other billing changes, and this is a big one as well. And this relates to the 2027 changes for obstetrical billing for maternity care. So, if any of you employ or have obstetrical services on the professional side. The AMA, American Medical Association, decided to change this bundled approach for global billing for vaginal deliveries and C-section deliveries, and really busted apart. And the thinking there was that with this bundle, there really weren’t aligned incentives for really differentiating the care needs of patients either before delivery or after delivery. And hey, if we were more specific about what was going on? We could better serve our patients, so they decided to, in a sense, blow this whole global billing process up. This methodology, where it was basically one bundled bill for the whole maternity case from the maternity care start through the delivery, and there was a code for the delivery itself, if that was a different provider. But that was kind of it. So now there’s going to be multiple codes for the prenatal service, and those are going to be basically matching up with your E/M codes. So think about that. Your obstetrical providers, whether they’re OB/GYNs, they’re going to need to document each and every prenatal visit as if it was an E/M code. So just like your other providers that you talk about the documentation, medical complexity, the time. However, you choose to code those E/Ms, you’re going to have to do that with each and every one of the obstetrical services, pre-delivery and post-delivery. Now, for the delivery process itself, a lot of hospitals now have broken that up into laborists and people delivering, and that’s kind of a whole different scheme than it was with this bundled approach. So the codes now introduced are going to include laboring codes, which of course are going to be based on time as well as complexity of the laboring mother, and then a separate set of delivery, whether it’s vaginal, whether it’s C-section, etc. So there’s a lot of change going on. There are a lot of implications here that we’ve listed in terms of what do you do to prepare. Number one, you need to get the whole list, and the AMA has a really nice link here describing all the CPT codes, what they mean, how to use them. So number one, understand what are the possible codes. Number two, you need to set up your billing systems to accommodate all of these new codes. Think about in terms of your payer contracts, not only your commercial contracts that probably still have that 59400 in it. How are they going to be reimbursing for these services, as well as your Medicaid plans, your fee-for-service Medicaid, as well as your management. How is Medicaid going to be doing this as of January of 2027? As kind of guided by the AMA, your patients are going to now see different transactional bills, possible copays, so they’re going to need to understand how this is changing. Of course, your providers need to have an absolute understanding of what they need to document and why. Again, for both the E/M codes, those laboring codes, measuring the time, measuring the complexity, etc. they’re often not used to doing it this way. So this is going to take some time and education. And then the straddle patients. What if they were a patient when we started with the bundle approach, and now in January 2027, now we’ve got this new thing. How is that going to be dealt with in contracts, etc. And then last compensation models for your providers. Maybe today you’re paying them on those RVUs. How is this new method going to change, increase or decrease their RVUs, and is your current structure still in alignment with their market value principles? So your payer and provider contracts most likely will need a careful review and potentially an edit. So new things January 1, 2027. Lot to do if you have obstetrics as part of your environment. The next change we want to address briefly is the telehealth changes for rural health clinics. Many of you critical access hospitals are operating rural health clinics, so effective October 1, that’s not too far away. The coding for telehealth is going to get much more refined.
1:19:12 – Rural Health Clinic telehealth coding changes
Jane Jerzak 1:19:12
The G2025 that’s going to go away for medical services. What’s going to come in their place is a litany of specific services that you provided to a patient, either through an A/V communication or through audio only. So you’re going to need to download and understand the possibilities of what can be provided in a telehealth setting, we’ve got the link here for you. You’re going to need to make sure that the modifiers are put on the claim, either 95 if it’s A/V or a 93 if it’s audio only. You’re going to need to point it to your RHC. Revenue Code 52X, typically 521, is the requirement, so lots of changes in the coding. Why is CMS doing this? They’re trying to understand what services are being provided by RHCs via telemedicine. So for the medical, this is not part of your bundled visit. These would be separately paid. The reimbursement would still remain the same right now. This is a data collection methodology, but stay tuned for the future on that. So lots of changes here for medical telehealth in RHCs.
1:20:47 – Federal price transparency and tax-exempt hospital legislation
Kathy Reep 1:20:47
Thanks, Jane. Now it’s time for a little bit of what are they doing in D.C. We kind of did Baltimore with what CMS is doing, so let’s kind of look at what’s going on from a D.C. perspective. And I think we could just move to the next slide that has a big question mark to try and figure this out. But I’m going to touch on a couple of pieces of legislation that I think you need to be aware of, and then Tracy is going to do the same. The first one that I wanted to touch on is H.R. 9504, which is the Tax Exempt Hospital Transparency Act. Essentially, this has advanced out of the House Ways and Means on July 1, but we haven’t seen any action on the full floor of the House yet on this. We do need to see additional action, but it would increase the reporting requirements for Form 990 Schedule H. They would want to know how you are responding to the items within your community health needs assessment. Are there any needs that aren’t being addressed, and why? What is the dollar value of your financial assistance? How many financial assistance applications did you receive? How many did you approve, and how many did you deny? And then an actual calculation of what your federal income tax would have been if you were not tax exempt. Unfortunately, for larger hospitals defined as those with more than 100 staff beds, there would be significantly increased reporting requirements as well. So, if you are concerned about this, if it’s something that you’re following, I urge you to take a look at this legislation and weigh in with your delegation while they’re on August recess. Will transparency ever go away? The answer is no. Remember, we still don’t have the requirements for price transparency in law. It is strictly through an executive order and then regulation. But we do have a number of pieces of pending legislation to make to actually codify the requirements for price transparency and take them 50 steps further, the Lower Cost More Transparency Act. This was passed unanimously out of House Energy and Commerce last week, this would expand the transparency requirements to more entities than just hospitals. It would expand to ambulatory surgical centers, labs, imaging providers, etc. It would also, as I said, codify the requirements, and it would require the plans. I think this one is very interesting, but would actually require the insurers to provide cost-sharing information to their enrollees through a real-time self-service tool. This would be something that the plans would be required to make available. This one scares me. This is H.R. 9390, which also passed last week out of the House. This would be a requirement effective January 1, 2028, and the name of this legislation is Prices on the Wall. You should be scared with just those words, Prices on the Wall. It would require hospitals to post discounted cash prices for all shoppable services in clearly visible areas. Remember, there are 300 currently shoppable services. Okay, and 72 of them, I think, were required for all hospitals if you provide them, and then you were to create your own additional 230, I do not know where you post these on the wall, but it would be wherever you’re registering a patient, and based you know for it to be clearly visible where the patients are. Jane and I and Tracy are going in the wallpaper business. It will be customized to each of your facilities because your prices all vary. But posting on your wall, it would also require ambulatory surgical centers to post this information, clinical labs to post prices, and the same for imaging providers. So it expands the requirements. I think the issue that is most concerning here is the requirement that they be posted on the wall. Difficult, and then we also have an interesting piece of legislation. Before I turn it over to Tracy, this one is still in committee, but this is the Patients Deserve Price Tags Act, but it has been addressed in both the Senate and in the House. So it’s in both chambers. It would again codify the transparency requirements, saying that we needed to provide exact prices rather than estimates.
Kathy Reep 1:26:00
Require monthly updates to the machine-readable file and to the shoppable services. Right now, it’s annual. Rather than posting 300 shoppable services, you would be required to post information on all shoppable services. And so, if we wind up getting the Patients Deserve Price Tags plus Prices on the Wall, you’re going to have a lot of information, a lot of services you’re going to have to be posting on the wall. Interesting in that it does expand the requirements for transparency to clinical diagnostic labs and imaging services, but only to hospital-owned or controlled ambulatory surgical centers, not to all ambulatory surgical centers. So interesting in terms of how that really works for patients for identifying the best location or the best price for care. The patients would be legally protected from owing more than the amount calculated by the health plan’s estimator tool. So, if the tool said that it’s going to be this much money, it can’t be any more than that, and it would also restrict providers from taking collection action on amounts that exceed what you calculated would be due from the patient if additional services were provided, then you would be restricted from taking additional collection activity. So, with that, Tracy,
1:27:31 – Rural healthcare facility funding legislation
Tracy Purcell 1:27:31
I’m going to go very quickly through the last couple slides. One bill pending in Congress is called the Agriculture Act of 2026, better known as the Farm Bill, it establishes a new program, Rural Healthcare Facility Technical Assistance Program. The name is really important. This is for technical assistance. It is not for capital projects. We’ve listed the facilities that are applicable here, and there are a lot of those. A couple of things about this that are important. Again, technical assistance. It’s up to $2 million per fiscal year between 2027 and 2031. It is for advisory services to help you plan for construction, expansion, renovation, modernization, and other upgrades. It’s also for long-term financial planning, but there’s no money for those actual projects. This is just planning to help you understand how you can get USDA funds and direct you to those funds. The other bill is the Rural Health Revitalization Act of 2026. Here’s where your funding for capital projects may come. It is a temporary no-interest loan from USDA for a five-year period for construction, replacement, renovation, and modernization. There’s also an optional five-year extension. There’s no specific funding amount in the legislation, which makes us nervous, but it is a potential for new capital funding. We’ve listed here who qualifies. This is a partial list. There are several others, so it’s going to really narrow the scope of facilities that this is applicable to. It does apply to critical access hospitals and rural emergency hospitals, and we’ve included the link as well, so you can look at that and see as it moves through Congress. We made it to the final polling question, Jennifer.
1:29:22 – Final poll and closing remarks
PYA Moderator 1:29:22
All right. Our fifth and final question is: What’s your organization’s biggest concern about federal rural health funding right now? Funding uncertainty or timing? Administrative and reporting burden? Staff capacity to apply for and manage grants? Or compliance and audit readiness. Remember, you must respond to the polling questions to receive CPE credit. You will have 30 seconds to answer.
Kathy Reep
I think they’re just plain concerned.
Jane Jerzak
About everything. Right? Everything?
Tracy Purcell
Yes.
PYA Moderator
All right. Thank you for participating in our poll. Back to the presenters.
Tracy Purcell
That is all we have today. We’ve listed some upcoming webinars you may be interested in on more rules that are coming down the pike. Thank you for your time today.
PYA Moderator
Thanks to our presenters Jane Jerzak, Tracy Purcell, and Kathy Reep. The slides and recordings for every episode of PYA’s Let’s Get Rural series are available in the Thought Leadership section of PYA’s website. pyapc.com. While at our website, you may register for other PYA webinars and learn more about the full range of services offered by PYA. On behalf of PYA, thank you for joining us. Have a great rest of your day.



