PKG00263416-instructions.pdf

U.S. Department of Health and Human Services

Centers for Medicare & Medicaid Services

Community Health Access and Rural Transformation Model

Community Transformation Track

Notice of Funding Opportunity Type: New

Funding Opportunity Award Type: Cooperative Agreement

Notice of Funding Opportunity Number: CMS-2G2-21-001

CFDA: 93.624

Notice of Funding Opportunity Posting Date: September 15, 2020

Applicable Dates:

Letter of Intent to Apply Due Date: January 18, 2021

Electronic Application Due Date: February 16, 2021 3:00 PM Eastern U.S. Time

Anticipated Issuance Notice(s) of Award: June 16, 2021

Anticipated Period of Performance: 7 years (1 Pre-Implementation Period and 6 Performance

Periods)

Table of Contents Executive Summary

A. Program Description

A.1. Purpose

A.2. Authority to Test the Model

A.3. Background

A.4. Program Requirements

A.4.1. Key Terms

A.4.2. Model Design and Funding Structure

A.4.3 Lead Organization and the Community

A.4.4. Community Partners

A.4.5. Value-Based Payment

A.4.6. Operational Flexibilities under the Model

A.4.7. Quality Strategy

A.4.8. Implementation and Learning Support

A.4.9. Model Timeline

B. Federal Award Information

B.1. Total Funding

B.2. Award Amount

B.3. Anticipated Award Dates

B.4. Period of Performance

B.5. Number of Awards

B.6. Type of Competition

B.7. Type of Competition

C. Eligibility Information

C.1. Eligible Applicants

C.2. Cost Sharing or Matching

C.3. Letter of Intent

C.4. Ineligibility Criteria

C.5. Single Application Requirement

C.6. Continued Eligibility

C.7. EIN, DUNS, and SAM Regulations

C.8. Faith-Based Organizations

C.9. Other Eligibility Requirements

D. Application and Submission Information

D.1. Address to Request Application Package

D.2. Content and Form of Application Submission

D.3. Unique Entity Identifier and System for Award Management (SAM)

D.4. Submission Dates and Times

D.5. Intergovernmental Review

D.6. Cost Restrictions

D.7. Mandatory Disclosure

D.8. Other Submission Requirements (if applicable)

E. Application Review Information

E.1. Criteria

E.1.1. Project Abstract

E.1.2. Project Narrative

E.1.3. Additional Required Documentation

E.2. Review and Selection Process

E.3. Federal Awardee Performance Integrity Information System (FAPIIS)

F. Federal Award Administration Information

F.1. Federal Award Administration Information

F.2. Administrative and National Policy Requirements

F.3. Terms and Conditions

F.4. Cooperative Agreement Terms and Conditions of Award

F.5. Reporting

F.5.1. Financial Reports

F.5.2. Monitoring

F.5.3. Evaluation

G. CMS Contacts

G.1. Programmatic Questions

G.2. Administrative/Budget Questions

Appendix I. Guidance for Preparing a Budget Request and Narrative:

Appendix II. Application and Submission Information

Appendix III. Business Assessment of Applicant Organization

Appendix IV: Accessibility Requirements

Appendix V. Review and Selection Process

Appendix VI. Application Check-Off List Required Contents

Appendix VII. Examples of Health Care Delivery System Redesign

Appendix VIII. Additional Resources for Applicants: Literature and Funding Opportunities

Appendix IX. Medicaid Needs Assessment

Appendix X. Transformation Plan Requirements

Appendix XI. CPA Financial Methodology

Executive Summary

The Community Health Access and Rural Transformation (CHART) Model is a voluntary payment model designed to meet the unique needs of rural communities. The CHART Model will test whether aligned financial incentives, increased operational flexibility, and robust technical support promote rural health care providers’ capacity to implement effective health care delivery system redesign on a broad scale. The Center for Medicare & Medicaid Innovation

(CMMI) will evaluate the impact of the CHART Model on Medicare and Medicaid expenditures, access to care, quality of care, and health outcomes for rural residents.

CHART aligns with CMS’s Rethinking Rural Health initiative, which aims to ensure individuals in rural America have access to high quality, affordable health care by offering new and creative payment models.1 The CHART Model will include two tracks: 1) the Community Transformation

Track and 2) the Accountable Care Organization (ACO) Transformation Track. This Notice of

Funding Opportunity (NOFO) is for the Community Transformation Track only. Under the

Community Transformation Track, award recipients will receive cooperative agreement funding and a programmatic framework to assess the needs of their Community (as defined in section

A.4.3.1. Community Definition below) and implement health care delivery system redesign.

Hospitals participating in the Community Transformation Track Alternative Payment Model

(APM) will receive capitated payments. Capitated payments provide hospitals with a stable revenue stream and incentivize reductions in fixed costs and avoidable utilization.2 Operational flexibilities will be available for participating hospitals to relieve regulatory burden, emphasize high-value services, and support providers in care management for their beneficiaries.

Under the ACO Transformation Track, entities will receive upfront payments to establish or expand rural ACOs that participate in two-sided risk arrangements through the Medicare

Shared Savings Program. Building on the success of the ACO Investment Model (AIM), these upfront payments will help rural entities engage in value-based payment reform and support the participation of such rural ACOs in the Medicare Shared Savings Program, several tracks of which are Advanced Alternative Payment Models (Advanced APMs) for 2020.

Information for the ACO Transformation Track will be released at a later date to be specified by CMMI. The ACO Transformation Track is separate from the Community Transformation

Track and is not addressed in this NOFO.

Award recipients’ (herein referred to as "Lead Organizations”) participation in the Community

Transformation Track of the CHART Model will begin with a Pre-Implementation Period (1 year), during which they will recruit participating hospitals (herein referred to as "Participant

Hospitals” in accordance with section A.4.4.2. Participant Hospitals) and partner with them and other community stakeholders to develop a health care delivery system redesign strategy.

Following the Pre-Implementation Period, Lead Organizations, community stakeholders, and

Participant Hospitals will have 6 Performance Periods (6 years) to implement their health care delivery system redesign strategy and participate in the APM.

Item Description

HHS Awarding Agency

Centers for Medicare & Medicaid Services (CMS)

CMS Awarding Center

Center for Medicare & Medicaid Innovation (CMMI)

Notice of Funding Opportunity Title

Community Health Access and Rural Transformation (CHART)

Model: Community Transformation Track

Authorization

Section 1115A of the Social Security Act (the Act) as added by

Section 3021 of the Patient Protection and Affordable Care Act

(Pub. L. 111-148), as amended by the Health Care and Education

Reconciliation Act (Pub. L. 111-152), referred to collectively as the Patient Protection and Affordable Care Act

Federal Assistance Listing Number

93.624

Funding Opportunity Type

New

Funding Opportunity Number

CMS-2G2-21-001

Type of Award Cooperative Agreement

Type of Competition Open to all eligible applicants

Letter of Intent CMMI highly recommends that interested applicants submit a Letter of Intent; however, a Letter of Intent is not required.

Due Date for Letter of Intent (e.g., MM/DD/YYYY)

1/18/2021

Application Due Date & Time

2/16/2021 3:00 PM Eastern U.S. Time

Anticipated Issuance Notice(s) of Award

06/16/2021

Period of Performance Start Date

07/01/2021

Period of Performance End Date

06/30/2028

Anticipated Total Available Funding

$75,000,000

Estimated Maximum Award Amount

$5,000,000

Estimated Maximum Awards

A. Program Description

A.1. Purpose

The Centers for Medicare & Medicaid Services (CMS), through its Center for Medicare &

Medicaid Innovation (CMMI), will implement a new Model, the Community Health Access and

Rural Transformation (CHART) Model. The CHART Model aims to improve health care quality and reduce Medicare and Medicaid expenditures within rural communities. The CHART Model will harness the drive, creativity, and local expertise of rural communities and leverage national resources to improve access to care, quality of care, and health outcomes for rural residents.

CHART’s Community Transformation Track aims to catalyze modernization of rural health delivery systems by offering technical support, operational flexibilities, and an APM specifically designed for rural communities.

A.2. Authority to Test the Model

The authority for the CHART Model is section 1115A of the Social Security Act (the Act). Section

1115A of the Act authorizes the Secretary of the Department of Health and Human Services

(HHS) to test innovative payment and service delivery models to reduce Medicare, Medicaid, or

CHIP expenditures while preserving or enhancing the quality of beneficiaries’ care.

A.3. Background

Rural hospitals face significant barriers to maintaining financial stability, including low patient volumes and high average fixed costs, that undermine viability under traditional health care reimbursement mechanisms such as volume-based Fee for Service (FFS). Additionally, rural hospitals have more difficulty attracting and retaining a health care workforce.3 4

A volume-based Fee for Service (FFS) payment structure can exacerbate the adverse conditions experienced by rural health care systems. Under FFS, if volumes decline, the continuation of high-cost but essential service lines, such as obstetrics, gynecology, and cancer care, can become financially unviable. Stakeholders have shared that existing regulatory constraints can drive rural hospitals’ to maintain inefficient facility footprints. 5 In Medicare, APMs and

Advanced APMs have accelerated the reduction of health care costs and improved quality of care.6 However, rural health care providers have adopted Advanced APMs at lower rates compared to urban health care providers due to perceived issues in capacity for implementation and lack of flexibility for rural practices.7

To mitigate the barriers rural hospitals face when implementing health care transformation, the

Community Transformation Track of the CHART Model offers (1) funding to establish partnerships and technical support, (2) an APM specifically designed for the rural context, and

(3) operational flexibilities. Through the CHART Model, health care providers, as well as public and private payers, can collectively invest in increasing access to care, promoting quality, and improving the health outcomes of residents within their Community.

A.4. Program Requirements

A.4.1. Key Terms

TERM DEFINITION

Acute Care Hospital A hospital that provides inpatient medical care and other related services for surgery, acute medical conditions, or injuries (usually for a short-term illness or condition).

Advanced Alternative Payment Model (Advanced APM)

As set forth in 42 CFR 414.1305, Advanced APMs are APMs that meet the following three criteria (which are specified in 42 CFR 414.1415):

1. Require participants to use certified EHR technology

2. Provide payment for covered professional services based on quality measures comparable to those used in the MIPS quality performance category; and

3. Either: (1) is a Medical Home Model expanded under CMMI authority or (2) requires a participant to bear more than a nominal amount of financial risk

Advisory Council* The Advisory Council is a multi-stakeholder organization that will play an advisory role to the Lead Organization as they carry out their funded activities (Table 2. Funded Activities for Lead Organizations), such as providing critical feedback in the development and implementation of Transformation Plans and assistance with collaboration efforts with Participant Hospitals, the State Medicaid Agency (SMA), and other key Community stakeholders.

Aligned Payer* An Aligned Payer is an entity that makes payment for health care services and possesses the three

TERM DEFINITION

aligning characteristics outlined in Table 5. Payer Alignment Characteristics.

Alternative Payment Model (APM) For purposes of this NOFO, an Alternative Payment Model (APM) is a payment approach that gives added incentive payments to provide high quality and cost-efficient care. APMs can apply to a specific clinical condition, a care episode, or a population. For purposes of the Quality Payment Program, APM is codified in 42 C.F.R. 414.1305.

Capitated Payment Amount (CPA) Capitated payment amount is the prospectively set annual payment amount for a Participant Hospital for Eligible Hospital Services that the Participant Hospital furnishes. The CPA will be calculated by

CMMI.

Collaborative Governance Collaborative governance refers to the approach of collaboration at the community level that involves shared leadership of rural hospitals and other health care providers (e.g., FQHCs) via governance arrangements (e.g., overlapping council constituents) and possibly shared management, to support cooperation in sharing and/or coordinating resources within a geographic region.

Community* Community is a geographic area that meets the requirements in section A.4.3.1. Community Definition.

Community Transformation Track* The Community Transformation Track includes the following: cooperative agreement funding, operational flexibilities, and the Community Transformation Track APM, which prospectively sets an annual payment amount for a defined set of Eligible Hospital Services for Participant Hospitals.8

Critical Access Hospital (CAH) A state that has established a Medicare Rural Hospital Flexibility Program may designate certain facilities as Critical Access Hospitals (CAH). CMS will then certify a state-designated facility as a CAH if the facility meets certain requirements. CAHs receive cost-based reimbursement for most Medicare Part A and Part B services. Eligible hospitals must, among other requirements, meet the following conditions to obtain CAH designation:

1. Have 25 or fewer acute care inpatient beds

2. Be located more than 35 miles from another hospital or CAH or 15 miles if mountainous terrain with only secondary roads (some exceptions apply)

3. Maintain an annual average length of stay of 96 hours or less for acute care patients

4. Provide 24/7 emergency care services

CAHs are defined in section 1861(mm)(1) of the Social Security Act.

Discount Factor* Discount factor refers to the small percentage discount applied to the capitated payment amount (CPA). The specific discount factor for a Community is determined by its total Medicare FFS revenue under the capitated payment arrangement at the Community-level, as specified in Appendix XI. CPA Financial Methodology.

Eligible Hospital Service An Eligible Hospital Service is any health care service that meets the following criteria:

1. Is covered under Part A or Part B of Title XVIII of the Act;

2. Meets the Service Inclusion Criteria discussed in section A.4.5.1. Capitated Payment; and

3. Does not meet the Service Exclusion Criteria discussed in section A.4.5.1. Capitated Payment.

Federally Qualified Health Center

(FQHC)

Federally Qualified Health Center (FQHC) status is a Centers for Medicare and Medicaid Services (CMS) designation indicating eligibility for reimbursement using specific payment methodologies. Federally Qualified Health Center is defined in sections 1861(aa)(4) and 1905(l)(2)(B) of the Act. The types of FQHCs include:

1. Health Center Program award recipients that receive federal funding under section 330 of the Public Health Service (PHS) Act and entities receiving funding from such a grant as a subrecipicent of the Health Center Program award recipient.

2. Health Center Program look-alikes. Look-alikes do not receive federal funding under section 330 of the PHS Act; however, to receive look-alike designation and associated Federal benefits, look-alikes must meet the Health Center Program requirements.

3. Outpatient health programs or facilities operated by a Tribe or Tribal/Indian organization under the Indian Self Determination and Education Assistance Act (Public Law 93-638) or by an urban Indian organization receiving funds under title V of the Indian Health Care Improvement Act for the provision of primary health services.

The Health Resources and Services Administration (HRSA) administers grant funding (as applicable) and oversight of the first two types of FQHCs (Health Center Program award recipients and look-alikes), both of which must meet a stringent set of requirements. These requirements are detailed in the Health Center Program Compliance Manual available.9

Hub-and-Spoke Model Hub-and-Spoke is a model of care that arranges service delivery assets into a network consisting of an anchor establishment (hub) that offers a full array of services, which is complemented by secondary establishments (spokes) which offer more limited service arrays. Patients who need more intensive services are routed from a spoke to a hub.10

Lead Organization* A Lead Organization is a CHART Model award recipient under the Community Transformation Track. It is responsible for forming the Advisory Council, recruiting Participant Hospitals, engaging the SMA, developing and implementing the Transformation Plan, and overseeing the implementation of the Community Transformation Track APM. There can only be one Lead Organization per Community. See section A.4.3 Lead Organization and the Community.

Participant Hospital* A Participant Hospital is an acute care hospital (defined as a “subsection (d) hospital” in section 1886(d)(1)(B) of the Act) or CAH that meets the requirements in section A.4.4.2. Participant Hospitals.

Payer A Payer is an entity furnishing payments for health care services.

Rural Health Clinic (RHC) A Rural Health Clinic (RHC) is a clinic located in a rural, medically under-served area in the United States that has a separate reimbursement structure from the standard medical office under the Medicare and Medicaid programs. The RHC program is intended to increase access to primary care services for patients in rural communities.

RHCs can be public, nonprofit, or for-profit health care facilities. To receive certification, they must be located in rural, underserved areas. They are required to use a team approach of physicians working with non-physician health care providers such as nurse practitioners (NP), physician assistants (PA), and certified nurse midwives (CNM) to provide services. The clinic must be staffed at least 50% of the time with a NP, PA, or CNM. RHCs are required to provide outpatient primary care services and basic laboratory services. Definitions are set out at sections 1861(aa)(2) and 1905(L)(1) of the Act.

Subrecipient According to 2 CFR § 200.93, subrecipient means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program; but does not include an individual that is a beneficiary of such program. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency.

Transformation Plan* A Transformation Plan is a detailed description of the health care delivery system redesign strategy that will be carried out under the Community Transformation Track of the CHART Model.

Transformation Plan requirements are outlined in section A.4.3.2. Transformation Plan.

*Key terms marked with an asterisk are specific to the CHART Model

A.4.2. Model Design and Funding Structure

Understanding that rural communities face unique challenges to implementing health care delivery system redesign, the Community Transformation Track of the CHART Model consists of three core program elements designed to set up rural communities for success.

1. Funding to establish partnerships and technical support. The Community

Transformation Track of the CHART Model will provide Lead Organizations with cooperative agreement funding to implement health care delivery system redesign that is both evidence informed and tailored to the Community’s needs. Lead Organizations will be able to use cooperative agreement funding to establish partnerships with community stakeholders to develop a health care delivery system redesign strategy, recruit Participant Hospitals, and procure technical support.

2. Operational flexibilities. The CHART Model makes operational flexibilities available to support Communities in implementing health care delivery system redesign. Participant

Hospitals may leverage operational flexibilities in their Community to relieve regulatory burden, emphasize high-value services, and support providers in care management for their beneficiaries. Operational flexibilities will be made available through a combination of model design elements and waivers under section 1115A authority as necessary to test the Model.

3. Value-based payment. Participant Hospitals will receive capitated payments. This stable revenue stream will incentivize Participant Hospitals to lower fixed costs, reduce potentially avoidable utilization, and improve quality of care.

The Community Transformation Track of the CHART Model will begin with a Pre-

Implementation Period, during which a Lead Organization will collaborate with key participants and community stakeholders to develop a strategy to implement health care delivery system redesign (as described in section A.4.3.2. Transformation Plan). In total, Lead Organizations will have six Performance Periods to implement their Transformation Plan. The Lead Organization will receive up to $5M in cooperative agreement funding. All cooperative agreement funding will be tied to performance requirements. The funding amounts, prerequisites, Budget Periods, and Performance Periods are outlined in Table 1. Funding Timeline and Prerequisites below.

Table 2. Funded Activities for Lead Organizations in section A.4.3 Lead Organization and the

Community describes the activities for which Lead Organizations are expected to use Model funds. To receive funding for the Second Budget Period through the Seventh Budget Period, Lead Organizations must submit a non-competing continuation application. Additional instructions will be included in the terms and conditions of the cooperative agreement.

Table 1. Funding Timeline and Prerequisites

Cooperative

Agreement

Timing

Model Timing Funding

Available Funding Prerequisites

First Budget Period

Pre- Implementation Period

Up to $2,000,000

Notice of Award (NoA) issued to Lead Organization

Acceptance of cooperative agreement terms and conditions

Second Budget Period

Performance Period 1

Up to $500,000 Satisfactory participation in the Pre-Implementation Period as described in the cooperative agreement terms and conditions

Transformation Plans approved by CMMI prior to Performance Period 1

Participant Hospitals’ combined Medicare FFS Revenue projected to be under a capitated payment arrangement in Performance Period 1 is greater than or equal to the minimum amount in the CMMI-approved Transformation Plan

Award of non-competing continuation (NCC) for Performance Period 1

Third Budget Period

Performance Period 2

Up to $500,000 Satisfactory participation in Performance Period 1 as described in the cooperative agreement terms and conditions

Updated Transformation Plans approved by CMMI prior to Performance Period 2

Participant Hospitals’ combined Medicare FFS Revenue projected to be under a capitated payment arrangement in Performance

Agreement

Timing

Model Timing Funding

Available Funding Prerequisites

Period 2 is greater than or equal to such amount for Performance Period 1

Award of NCC for Performance Period 2

Fourth Budget Period

Performance Period 3

Up to $500,000 Satisfactory participation in Performance Period 2 as described in the cooperative agreement terms and conditions

Updated Transformation Plans approved by CMMI prior to Performance Period 3

Participant Hospitals’ combined Medicare FFS Revenue projected to be under a capitated payment arrangement in Performance Period 3 is greater than or equal to such amount for Performance Period 2

Award of NCC for Performance Period 3

Fifth Budget Period

Performance Period 4

Up to $500,000 Satisfactory participation in Performance Period 3 as described in the cooperative agreement terms and conditions

Updated Transformation Plans approved by CMMI prior to Performance Period 4

Participant Hospitals’ combined Medicare FFS Revenue projected to be under a capitated payment arrangement in Performance Period 4 is greater than or equal to such amount for Performance Period 3

Agreement

Timing

Model Timing Funding

Available Funding Prerequisites

Award of NCC for Performance Period 4

Sixth Budget Period

Performance Period 5

Up to $500,000 Satisfactory participation in Performance Period 4 as described in the cooperative agreement terms and conditions

Updated Transformation Plans approved by CMMI prior to Performance Period 5

Participant Hospitals’ combined Medicare FFS Revenue projected to be under a capitated payment arrangement in Performance Period 5 is greater than or equal to such amount for Performance Period 4

Award of NCC for Performance Period 5

Seventh Budget Period

Performance Period 6

Up to $500,000 Satisfactory participation in Performance Period 5 as described in the cooperative agreement terms and conditions

Updated Transformation Plans approved by CMMI prior to Performance Period 6

Participant Hospitals’ combined Medicare FFS Revenue projected to be under a capitated payment arrangement in Performance Period 6 is greater than or equal to such amount for Performance Period 5

Award of NCC for Performance Period 6

A.4.3 Lead Organization and the Community

CMMI will award cooperative agreement funding for the Community Transformation Track of the CHART Model to a single entity, referred to as a Lead Organization. The Lead Organization will be responsible for driving health care delivery system redesign by leading the development and implementation of Transformation Plans as well as convening and engaging the Advisory

Council. Lead Organizations will also be responsible for ensuring compliance with Model requirements and with any requests from CMMI for additional data or other supplemental information. A potential Lead Organization must submit, as part of its application, documentation that demonstrates it meets each of the following requirements for selection:

1. A presence in the Community one year prior to the publication date of this NOFO.

Examples of “presence” include advocating for (e.g. a representative organization), providing services to, or otherwise serving beneficiaries within the Community). While a physical presence in the Community is not required, a relationship with the Community is required.

2. Expertise in rural health issues, in particular specific diseases, health disparities, barriers to accessing care, policy, and other key factors that significantly influence health outcomes, particularly those prevalent in the Community.

3. Experience, either through direct management or through a partnership, in designing and implementing APMs.

4. Received and successfully managed one or several health-related grant(s) or cooperative agreement(s) totaling at least $500,000 over the last three years.

5. Experience in each of the following areas:

a. Engaging and maintaining provider participation in APMs or CMMI demonstration projects/models.

b. Establishing, modifying as needed, and maintaining agreements between health care providers.

c. Conducting outreach, developing, and managing relationships with diverse health care-related stakeholders.

Any organization that does not meet all of the criteria listed above is ineligible to serve as a

Lead Organization. Examples of entities eligible to serve as Lead Organizations include, but are not limited to, State Medicaid Agencies (SMAs), State Offices of Rural Health (SORHs), local public health departments, Independent Practice Associations (IPAs), and Academic Medical

Centers (AMCs).

A.4.3.1. Community Definition

Lead Organizations will be responsible for defining the parameters of their Community, for the purposes of the CHART Model. Each Community must meet the following criteria:

1. Encompass either (a) a single county or census tract or (b) a set of contiguous or non-contiguous counties or census tracts. Each county or census tract must be classified as rural, as defined by the Federal Office of Rural Health Policy’s list of eligible counties and census tracts used for its grant programs.11

2. At the time of application submission, include a minimum of 10,000 Medicare FFS beneficiaries whose primary residence is within the Community.

NOTE: Lead Organization’s definition of their Community is subject to CMMI review and approval. During application review, CMMI will ensure that there is not overlap between Lead

Organizations’ defined Communities.

A.4.3.2. Transformation Plan

Lead Organizations will leverage technical support and input from Community Partners, i.e. its

Advisory Council, Participant Hospitals, and the SMA as described in section A.4.4. Community

Partners, to design and implement Transformation Plans that are both tailored to the

Community’s needs and informed by best practices.

Transformation Plans are Lead Organizations’ descriptions of their health care delivery system redesign strategy. Each Lead Organization, in collaboration with its Advisory Council (including the SMA) and its Participant Hospitals, will develop and submit Transformation Plans. All

Transformation Plans must be reviewed and approved by CMMI. A Lead Organization will submit their first Transformation Plan during the Pre-Implementation Period, and subsequently submit updates on an annual basis. At a minimum, CMMI will review each Transformation Plan prior to the start of each Performance Period and provide feedback to the Lead Organization as necessary leading up to Transformation Plan approval. A Lead Organization may modify its

Transformation Plan more frequently than the schedule set by CMMI, for example if they want to implement a programmatic change on a more immediate basis. Upon CMMI approval, each

Lead Organization must begin implementing its Transformation Plan in Performance Period 1.

CMMI requires Transformation Plans to focus on population health disparities present in the

Community. Specifically, Transformation Plans must address at least one of the following:

behavioral health treatment, substance use disorder treatment, chronic disease management and prevention, or maternal and infant health. CMMI also requires Transformation Plans to include strategies to expand the use of telehealth and other technology to support care delivery improvement. Communities may leverage regulatory flexibilities under the Model to implement telehealth expansion in regards to Section 1834(m) of the Act. In addition, Communities are encouraged to address social determinants of health in their Transformation Plans. To address the social determinants of health, Lead Organizations may utilize cooperative agreement funding, leverage the transportation Medicare beneficiary engagement incentive (see section

A.4.6. Operational Flexibilities under the Model) or engage the SMA to implement a change in

Medicaid policy. More information on integrating social determinants within health care delivery system redesign will be made available to Communities that have been selected to participate.

At CMMI’s sole discretion and to the extent necessary to test the Model, certain waivers of

Medicare and Medicaid requirements will be available to facilitate implementation of

Transformation Plans (see section A.4.6. Operational Flexibilities under the Model and

Appendix IX. Medicaid Needs Assessment for more information). For example, some Lead

Organizations and/or Participant Hospitals may use such waivers to facilitate converting rural hospitals to rural emergency and outpatient-only facilities or establish hub-and-spoke arrangements that distribute and coordinate services by need throughout a Community.

CMMI will use the Transformation Plans to track, monitor, and evaluate Lead Organizations’ progress against the Model’s Community Transformation Track goals. Cooperative agreement funding for each Performance Period is contingent on CMMI approval of Transformation Plans in budget periods 2 through 7 (see Table 1 Funding Timeline and Prerequisites). Appendix X.

Transformation Plan Requirements outlines the basic components of Transformation Plans.

CMMI will provide additional guidance to Lead Organizations on Transformation Plan requirements upon award.

A.4.3.3. Lead Organization Funded Activities

Lead Organizations can use cooperative agreement funding for any of the purposes described in

Table 2. below. The Lead Organization will be responsible for determining the budget allocations for staff time and infrastructure costs consistent with the Model terms and conditions, as well as demonstrating how they and their subrecipients will use funds to accomplish their respective roles in Model implementation. The Lead Organization will be responsible for the receipt and management of this funding in accordance with the Model terms and conditions and applicable federal laws. Additionally, Lead Organizations must demonstrate in their Transformation Plans, that Aligned Payers meet the requirements of the

Model (for more information on Aligned Payers, see section A.4.5.3. Multi-payer Alignment).

Table 2. Funded Activities for Lead Organizations

Timing Lead Organization Activities

Pre-Implementation Period (1 year)

Constitute and convene the Advisory Council in accordance with the Model terms and conditions

Manage cooperative agreement funds

Partner with the SMA (if the SMA is not the Lead Organization), to ensure necessary Medicaid authorities are in place to align the state’s Medicaid program with the Model

Recruit Participant Hospitals to the Model

Timing Lead Organization Activities

Recruit commercial payers to participate as Aligned Payers in the Model and oversee their compliance with the requirements outlined in section A.4.5.3 Multi-payer Alignment

Provide or procure technical assistance to support development of the Transformation Plan and prepare Participant Hospitals to enter capitated payment arrangements with CMS

Create, submit for CMMI approval, revise if needed, and, upon CMMI approval, implement Transformation Plan in partnership with Participant Hospitals, SMA, Advisory Council, and other relevant stakeholders

Emergency response planning for future public health emergencies (PHEs), and/or recovery from COVID-19 PHE

Respond to the evaluator’s data related and other requests

Monitor programmatic and budgetary progress, including submitting required data and progress reports to CMMI in accordance with the Model terms and conditions

Execute and submit to the Project Officer with its NCC application for Performance Period 1 legally enforceable agreements as needed, e.g., business associate agreements (BAAs) between the Lead Organization and the SMA

Performance Periods (6 years)

Update Transformation Plan annually and, upon CMMI approval, implement updated Transformation Plan in partnership with Participant Hospitals, SMA, Advisory Council, and other relevant stakeholders

Convene the Advisory Council at least on a quarterly basis

Manage cooperative agreement funds

Recruit additional Participant Hospitals as necessary

Recruit additional Aligned Payers and work with payers to identify any legislative or statutory changes necessary to implement the

APM

Provide or procure strategic and operational technical assistance, e.g., to support Participant Hospitals, coordinate the Advisory Council, or perform research to identify emerging needs within the Community

Collaborate with the SMA including meeting Medicaid Participation Targets, as described in section A.4.5.3.2. Medicaid Alignment, and ensuring that the Medicaid Needs Assessment, provided in Appendix IX. Medicaid Needs Assessment is updated in accordance with the Model terms and conditions.

Oversee Aligned Payers compliance with the requirements outlined in section A.4.5.3 Multi-payer Alignment

Timing Lead Organization Activities

Emergency response planning for future public health emergencies (PHEs), and/or recovery from COVID-19 PHE

Respond to data related and other requests for the Model evaluation

Monitor the progress of the Model, including submitting required data and progress reports to CMMI in accordance with the Model terms and conditions and assessing the compliance of all other involved parties with CHART program requirements

Manage any close-out activities, if the Model is not continued

Lead Organizations may use cooperative agreement funds to provide technical support to

Participant Hospitals and the SMA through expanding in-house capacity or engaging contractors. Lead Organizations may also use cooperative agreement funds for emergency response planning for future public health emergencies. Lead Organizations may request to receive less cooperative agreement funding in favor of a lower discount factor for their

Participant Hospitals, as discussed in section A.4.5.1. Capitated Payment.

A.4.4. Community Partners

Recognizing that stakeholder engagement is key to effective reform, the Community

Transformation track of the CHART Model requires that Lead Organizations establish an

Advisory Council. Together the Lead Organization and their Advisory Council will forge robust and meaningful partnerships with their Participant Hospitals and SMA.

A.4.4.1. Advisory Council

To ensure that health care delivery system redesign strategies reflect the Community’s needs and goals, Lead Organizations are required to assemble an Advisory Council. The Advisory

Council will represent the Community’s perspective and collectively advise the Lead

Organization as they carry out their required activities (described in Table 2. Funded Activities for Lead Organizations). A few key activities the Advisory Council will advise on include, but are not limited to, developing and updating Transformation Plans, hospital and payer recruitment, developing arrangements with payers governing APM alignment and data-sharing, monitoring the progress of the Model, and identifying any necessary changes. The Advisory Council will not manage the Lead Organization or Participant Hospitals. The Advisory Council will not be responsible for management and oversight of Cooperative Agreement funds.

Lead Organizations must convene Advisory Councils at least quarterly. Advisory Councils should encompass a variety of perspectives and reflect the Community’s needs. While the specific membership of the Advisory Council will differ by Community, it must include the following representatives:

1. The SMA (if the Lead Organization is not the SMA) even if the SMA is physically located outside of the Community.

2. At least one Participant Hospital (see section A.4.4.2. Participant Hospitals for definition).

3. At least one Aligned Payer (if the Lead Organization has recruited any commercial payers) see section A.4.5.3. Multi-payer Alignment for definition.

4. At least one beneficiary or unpaid caregiver.

Furthermore, the Advisory Council must include a representative from at least three distinct entities from the following list:

1. A primary care provider, such as a Federally Qualified Health Center (FQHC), Rural

Health Clinic (RHC), or physician group practice.

2. A health care provider of substance use disorder treatment and/or mental health services.

3. An additional Participant Hospital.

4. The State Office of Rural Health.

5. An additional Aligned Payer.

6. A community stakeholder group, such as a rural patient advocacy group, Area Agency on Aging, or faith- and community-based organizations.

7. A long-term care facility (e.g. nursing home), home health provider, or hospice provider.

8. An Indian Health Service (IHS) or Tribal health provider or Federally recognized Tribe or

Tribal organization.

9. The U.S. Department of Veteran’s Affairs (VA).

The Lead Organization may include additional representatives from organizations or governmental entities not included in the list above. To be eligible to serve on the Advisory

Council an organization must provide health care services, or services that address health-related social needs, to Community residents. An eligible governmental entity must have jurisdictions that encompass the Community’s parameters. For example, Lead Organizations may consider inviting county governments, and state or local public health departments to join the Advisory Council.

Individual Advisory Council representatives do not need to reside or work within the

Community. However, each organization represented on the Advisory Council must have a presence within the Community or have a contractual arrangement with a health care provider that furnishes Eligible Hospital Services to beneficiaries living in the Community. For the purposes of this NOFO, any organization that advocates for, provides services to, or otherwise serves beneficiaries within a Community, is considered to have a presence within the

Community.

A.4.4.2. Participant Hospitals

Lead Organizations will be expected to recruit Participant Hospitals for the Community

Transformation Track APM. Each Participant Hospital, identified by its CMS Certification

Number (CCN), must be an acute care hospital (defined as a “subsection (d) hospital” in section

1886(d)(1)(B) of the Act) or CAH that either:

1. Is physically located within the Community and receives at least 20% of its Medicare FFS revenue from Eligible Hospital Services provided to residents of the Community; or

2. Is physically located inside or outside of the Community and is responsible for at least

20% of Medicare expenditures for Eligible Hospital Services provided to residents of the

Community.

All other types of health care facilities are ineligible to be Participant Hospitals. In the event that a hospital system has multiple inpatient campuses and outpatient locations, each inpatient campus and outpatient location will be considered a distinct Participant Hospital as long as it separately meets the eligibility criteria in this section.

Subject to CMS approval, Participant Hospitals may simultaneously participate in the

Community Transformation Track and other Medicare value-based programs, models or demonstrations. If a Participant Hospital participates in a Medicare program, demonstration or model, CMS may, in its sole discretion, make adjustments to the Participant Hospital’s

Capitated Payment Amount (CPA) to avoid duplicative accounting of, and payment or penalties for, amounts received by the Participant Hospital under such Medicare program, demonstration, or model.

Lead Organizations must ensure that each Participant Hospital signs a Participation Agreement with CMMI committing the Participant Hospital to, among other things, (1) assume accountability for hospital expenditures (as specified in Appendix XI: CPA Financial

Methodology) for the Medicare beneficiaries they serve that reside in the Community for the full duration of each Performance Period; (2) implement the activities outlined in the

Transformation Plan, as applicable; and (3) report necessary quality and other data to CMMI.

Lead Organizations, as the named CHART award recipients, will be responsible for ensuring that

Participant Hospitals execute certain key model activities to be outlined in forthcoming

Participation Agreements and in alignment with the activities described in Table 2. Funded

Activities for Lead Organizations.

To ensure their eligibility to participate in CHART, Participant Hospitals must sign Participation

Agreements with CMMI in either Performance Period 1 or Performance Period 2. CMMI may allow additional opportunities for Participant Hospitals to sign Participation Agreements.

Regardless of when a Participant Hospital signs a Participation Agreement, it will have up to two years to transition back to FFS reimbursement from the effective date of either (1) Model track termination or non-continuation; or (2) termination of the Participant Hospital’s Participation

Agreement. During this transition period, Participant Hospitals may continue to operate under a capitated payment arrangement until fully transitioned.

A.4.4.3. State Medicaid Agency

SMA participation is required under the Community Transformation Track of the CHART Model.

If the Lead Organization is not the SMA, it must partner with the SMA to implement the CHART

Model. The SMA must participate in the Advisory Council and serve as an Aligned Payer (see section A.4.5.3. Multi-payer Alignment). To ensure that the SMA has the capacity to carry out

CHART’s program requirements, the SMA must be a subrecipient of cooperative agreement funding. As a component of the Community Transformation Track application, SMAs must submit a Memorandum of Understanding (MOU) with the potential Lead Organization (see section E.1.2.2.3. Health Care Delivery System Redesign Concept for MOU requirements).

Table 3. SMA Activities

Timing SMA Activities

Pre- Implementation Period (1 year)

Execute and submit to the Lead Organization legally enforceable agreements as needed, including business associate agreements (BAAs)

Participate in the Advisory Council, even if the SMA is located outside of the Community

No later than 45 days after the start of the Pre-Implementation Period, meet with representatives of CMCS to begin designing and implementing any changes to its Medicaid program required to execute CHART financial alignment (see section A.4.5.3. Multi-payer Alignment)

Collaborate with the Lead Organization to submit progress updates on executing CHART financial alignment (including a timeline agreed upon by the state and CMCS) as an appendix to Quarterly Progress Reports (QPRs) (see section F.5. Reporting)

Performance Periods (6 years)

Participate in the Advisory Council, even if the SMA is located outside of the Community

Collaborate with the Lead Organization to submit progress updates on executing CHART financial alignment (including a timeline agreed upon by the state and CMCS) as an appendix to Quarterly Progress Reports (QPRs) (see section F.5. Reporting)

Timing SMA Activities

Align its Medicaid program with the Community Transformation Track APM (see section A.4.5. Value-Based Payment), including receipt of CMS approval of State Plan Amendments (SPA) and/or 1115(a) demonstration application(s) as needed and, if applicable, working with managed care plans to support APM implementation

Meet Medicaid Participation Targets, as discussed in section A.4.5.3.2. Medicaid Alignment below

The SMA must comply with all data and reporting requirements of the Model, including accurate and timely submission of T-MSIS data (see section F.5.3. Evaluation), and establishing information sharing arrangements and infrastructure

The Medicaid elements of the Model shall operate consistent with existing Medicaid laws and regulations. Acceptance of a Lead Organization into the CHART Model does not constitute approval of any changes to a state’s Medicaid program. Information included in a CHART Model application will be used solely for the purpose of application review for the CHART Model and does not represent a formal request for a State Plan Amendment or 1115(a) demonstration approval on the part of the state, nor a commitment to such approval on the part of CMS.

States shall submit those requests through the existing CMS processes. The SMA will not be permitted to claim federal financial participation (FFP) for administrative activities for which the

SMA receives cooperative agreement funding through the Model to prevent the duplication of funding by CMS.

Upon award, CMMI will help SMAs and Lead Organizations navigate modifications to their state’s Medicaid authorities, if and as needed, to carry out their Transformation Plan. CMMI will work with the Center for Medicaid and CHIP Services (CMCS) to maximize process efficiency for reviewing proposed Medicaid State Plan Amendments (SPAs) and Medicaid waivers. CMMI, in collaboration with CMCS, will begin working with SMAs and Lead Organizations early in the process of developing their Transformation Plans, in order to quickly identify what Medicaid

SPA(s) or waiver(s) might be necessary. See Appendix IX. Medicaid Needs Assessment for information on the pathways available to SMAs to implement the Community Transformation

Track APM.

A.4.5. Value-Based Payment

The capitated payment arrangement in the Community Transformation Track is designed to establish the financial flexibility necessary for Participant Hospitals to engage in health care delivery system redesign activities outlined in Transformation Plans. This APM offers a predictable and stable revenue stream, which mitigates financial instability in rural hospitals and improves their capacity to weather volatility. In particular, methodology will incorporate adjustments 1) for service line changes and 2) exogenous factors (i.e., Public Health

Emergencies). When Participant Hospitals’ revenue is no longer predicated on realized volumes, they will be able to focus on more transformational and collaborative strategies, such as converting to a rural emergency medical center or reconfiguring service lines across multiple

Participant Hospitals (e.g., one hospital shuts down an orthopedic line but refers volume to a neighboring hospital who has a larger and higher quality orthopedic program). In contrast to

FFS incentives to grow volumes, this APM creates an incentive to reduce potentially avoidable utilization, prevent readmissions, and reduce hospital lengths of stay as appropriate. Participant

Hospitals will be able to keep the savings that are generated through these reductions.

Moreover, discounts applied to the Participant Hospitals’ CPAs would secure first dollar savings for Medicare, Medicaid, and Aligned Payers, as described below. For purposes of the Quality

Payment Program, the Community Transformation Track is not an Advanced APM or a MIPS

APM.

A.4.5.1. Capitated Payment

This section provides a description of the financial methodology CMMI will use to calculate the

Capitated Payment Amount (CPA) for each Participant Hospital. CMMI will calculate CPAs, not

Lead Organizations. The CPA financial methodology is included in…