Alabama has a Rural Health Plan developed with the assistance of the Alabama Department of Public Health’s Office of Primary Care and Rural Health, the Alabama Hospital Association, and rural hospitals.  The current State Rural Health Plan, published in 2008, was updated in both 2011 and 2016[1].  This plan is incorporated into this State Health Plan by reference hereto.

1. (1) The Problem. Rural healthcare providers disproportionately serve individuals who are older, sicker, poorer and underinsured/uninsured as compared to people living in other parts of Alabama.  Alabama’s uninsured rate (19-64 years) is 15.8%[2].  Policy makers anticipated a rate less than 10% after passage of the Affordable Care Act, but the take up in the Alabama Marketplace/Exchange is only 3%.  Rural Alabamians (as well as Americans on the whole) often lack adequate primary care access and have higher rates of diabetes, heart disease, cancer, obesity, tobacco/opioid use, mental health issues and stroke[3].  The health issues plaguing rural Alabamians stress a fragile rural delivery system dealing with lower volumes, rising costs, increased regulations, lower negotiating power and a shortage of healthcare workers.  As rural Alabama changes and evolves, so too must rural healthcare delivery in the state.  The issues facing Alabama’s rural care providers are multi-faceted:
   

   1. (a) Reimbursement and Operational Factors.  As a rule, providers in rural areas experience a higher mix of Medicare/Medicaid patients than do the facilities in urban areas; but rural hospitals receive a lower amount of reimbursement per patient from Medicare.  Rural providers must have robust volume to thrive.  But the healthcare system is shifting away from an inpatient-dominant and volume-driven system and consequently the state’s rural delivery system is becoming increasingly brittle.  To counter the loss in volume, many rural providers expand their service offerings which is often not ideal because quality is correlated to volume in certain specialties[4].

      As healthcare shifts from volume-based reimbursement to a system based predominately on value, rural providers will continue to struggle if payors do not make a distinction between the unique operating context of a rural hospital and that of suburban and urban providers.  Even when a distinction is made, oftentimes it is deleterious to the provider.  For example, the Centers for Medicare and Medicaid Services (CMS) implementation of the Prospective Payment System (PPS) assumes hospitals in rural areas will not experience the same labor costs for health personnel services as do urban hospitals.  Therefore, the component parts of the prospective payment formula  provide for a lower wage allowance for rural hospitals.  Another factor that tends to limit reimbursement for rural hospitals is that the PPS system assigns weights related to patient attributes to each diagnosis-related group (DRG).  The higher the weight per DRG, the more reimbursement a hospital will receive if that hospital provides services to patients with higher weighted/reimbursed DRGs.  Therefore, urban facilities may receive more reimbursement, although the weight assignment per DRG has not been proven as an accurate indicator of the consumption of resources.  The bottom line effect of Medicare reimbursement on rural hospitals is the payment rates are generally less for hospitals in rural areas, leading to a less than adequate payment system.  According to the Alabama Hospital Association, in recent years approximately eighty-eight percent (88%) of rural hospitals in the state experienced a net operating loss.

   2. (b) Demographic Factors.  A low population density, worsened by the emigration of the younger population in search of employment in larger communities, results in a high proportion of the elderly and underinsured/uninsured remaining in rural communities.  Alabama’s overall population density in 2019 averaged 94.4 people per square mile, ranging from a low of 12.5 persons per square mile in Wilcox County to a high of 586.2 persons per square mile in Jefferson County.  In this case a measurement of density may not be an accurate indicator as only 18 counties have a density factor equal to or above the average and 49 counties below the average.  Rural facilities thus have a smaller market from which to draw patients and fewer patients who pay adequately as compared to the costs of providing the care.  According to the Centers for Medicare and Medicaid Services, in 2014 health care spending per capita for the 65 and older population was over five times higher than health care spending for children, and almost three times higher than for working-age adults[5].  The population 65 and older comprises 16.9% of the state population and 19.2% for the 49 rural counties, further emphasizing the need to develop and implement a rural health plan[6].  In addition, rural Alabama has a high percentage of Veterans and a low percentage of commercially insured residents.
   3. (c) Utilization Factors.  Overall use of inpatient services in rural areas continues to decline, while those same services are increasingly used by the elderly who are covered by decreasing Medicare reimbursement.  Given that many of the rural hospitals are sole community providers, the leading industry in the community, and one of the major employers in the area, the decreasing use has caused concerns both economically and politically.  Leaders are rightly concerned that the demise of the rural hospital leaves a discontinuity of health care services for citizens in their areas.

   4. (d) Insufficient Health Professional Supply.  Data from the Alabama Department of Public Health indicates that every county in the state has at least some areas considered to be medically underserved, with fifty-eight (58) counties shown as completely medically underserved.  While Alabama has made strides in licensure portability in recent years, there are still barriers to address, including portability within telehealth.  Because of the problems attracting specialized professionals and obtaining new technologies, few rural hospitals can provide special services that might increase their revenue.  The migration of young people to urban communities, lack of adequate reimbursement, and limited patient resources are other problems hindering the recruitment of professional personnel and fueling the state’s health professional shortages.  Government reports show that Alabama, like many other parts of the South, is experiencing a physician shortage.

      Children living in rural areas have less access to routine primary care and, if they have a chronic condition or medically complex diagnosis, must drive long distances to urban centers for care.  Many rural emergency rooms are not equipped for pediatric care, and those cases are often transferred to regional hospitals.  In addition, much of the rural emergency care is through a volunteer EMS system, which could be enhanced.

      Utilization of nurse practitioners, physician assistants, and nurse midwives meets a real need in addressing the access problem faced by many rural Alabamians.  Health planners, providers, policy makers, and communities must approach the recruitment and retention of non-physician health professionals realistically.  It is unrealistic to assume that every rural community will be able to recruit and retain a physician.  In order to provide access to health care for the citizens of many of the state’s most rural areas, the utilization of non-physician health professionals must be seriously encouraged.  Also, payment for services provided by these non-physician health professionals must be made by third party payors and self-insured programs in order for their numbers to increase.

   5. (e) No one strategy will solve the state’s problems with rural health care.  Rural healthcare delivery must evolve and the state must focus on appropriate and adequate access but untether from the idea of access equals an inpatient hospital.

2. (2) Recommendations. Using the Bipartisan Policy Center’s 2018 Report, “Reinventing Rural Health” as a framework, the following are recommendations from the Committee:

   1. (a) Communities should tailor available services to the needs of the community, which for many rural areas are driven by changing demographics.  To build tailored delivery services, policies need to be flexible and not just have a “one-size-fits-all” approach.

      1. 1. Support Opportunities for Transformation.  The healthcare industry nationally continues to move toward the outpatient setting and towards a value-based approach.  Rural hospitals feel the impact of this transformation even more acutely and face unique challenges given both their location and low patient volumes.  Many of Alabama’s rural hospitals rely on enhanced reimbursement programs (e.g. Critical Access Hospital, Medicare Dependent Hospital, Low Volume Hospital adjustment, etc.) to be able to offer key outpatient services, despite low patient volumes.
      2. 2. Overall health improvement and management of disease cannot be done when local access to basic services is lost.  Lack of access, either to an inpatient hospital or to urgent/emergent care, leads to increased time and cost of transportation to healthcare services (particularly among seniors, who experience an average of fourteen (14) additional minutes in an ambulance[7]); reduced per capita income (-4%) and increased unemployment (1.6%) due to the loss of jobs for hospital staff and outward migration of community members[8].
      3. 3. For communities that cannot sustain their current healthcare delivery structure, the SHCC supports state regulatory and statutory allowances for the establishment of new types of access sites that support transformation while maintaining important access points to care.  These provider types would provide services critical to any rural community including: primary care; urgent, emergency care and transportation (EMS); observation, outpatient and ambulatory services including basic ancillary services and minor procedures.  Emergency services could be enhanced by having several paramedics trained to work alongside and within the volunteer EMS system.  In addition, population health approaches, including chronic disease management and care coordination, would be required.  Optional services could be provided if they are not locally available (e.g. patients who do not need acute care could be treated and receive skilled nursing and/or rehabilitation services, behavioral health, oral health or home health services).
      4. 4. The realities of the health care system are that form follows payment and shifting to more transformative models will require alternative and enhanced reimbursement models, recognizing the unique challenges of low patient volumes coupled with an increasingly large population of Medicare enrollees.  All innovation models should ensure adequate reimbursement to support such models.
      5. 5. These new provider types would require strong relationships with an inpatient facility or partner organization, as well as a plan to assure emergent and non-emergent transportation in the area between the partner and the smaller entities as well as other service providers in the area.
   2. (b) Maintain Certificate of Need (CON).  The CON serves as an important guardrail against reducing access and should not be repealed or limited in scope.  Repealing or limiting the scope of CON can reduce access to care for the most vulnerable by destabilizing safety net hospitals.  This occurs through a further degradation of the payer mix among patients at safety net providers.

   3. (c) Once the right system and services have been identified for a community, funding mechanisms and payment models should reflect the specific challenges that rural areas face – such as small population size and high operating costs.  Sparse populations mean a small number of patients, so reimbursement metrics must consider low patient volumes.  Rural health care providers are eager to participate in value-based alternative-payment models, but they need workable approaches and metrics.  Policymakers should consider the unique challenges faced in rural areas when developing metrics and funding mechanisms.

      1. 1. Exploration and support should continue to identify and increase access to insurance and care for Alabama’s uninsured.
      2. 2. Addressing Social Determinants of Health.  A lack of focus on Social Determinants of Health translates into poor health status, which is borne out in Alabama’s consistently low national ranking with respect to issues like obesity, substance use disorder and infant mortality.  The SHCC supports the goals of the Alabama Coordinated Health Network (ACHN) and Integrated Care Networks (ICN) and the programs outlined in the Quality Improvement Programs (QIP) to address some of the higher impact health issues affecting many rural residents.

   4. (d) With appropriate services and funding, rural communities can build sustainable and diverse workforces.  Rural health can no longer survive on the back of one physician serving an entire community 24/7.  Building and supporting the healthcare workforce should be a high priority, and the expectation of care quality should be comparable in rural as in more urban areas of the country.  Also, alternative providers practicing at the top of their licenses, such as nurse practitioners and physician assistants, can fill vital primary care roles in the community.  Communities should start young and think local for recruitment with pipeline programs that encourage interest in the health care sector in local middle- and high-school students.  The State should adopt policies that increase the availability of and participation in rural residency programs.  Providers are starting to think creatively by employing case managers, community-health workers and in-home providers to help meet the needs of the community.  Policies should support these efforts.

      1. 1. Rural Development.  The SHCC encourages state policymakers’ support and funding (where applicable) of targeted rural initiatives that would assist rural providers.
      2. 2. Support Additional Graduate Medical Education (“GME”) Funding.  Addressing the physician and nurse workforce shortage is a priority for all rural providers.  Rural hospitals face unique recruitment challenges but increasing the opportunity for physicians to train in rural hospitals allows medical residents to see the impact they can have and the benefits of rural locations.
      3. 3. Promote Rural Practice and Retention.  The SHCC encourages state policymakers to pass the Alabama Physician Initiative, which would provide scholarships for certain medical students who are enrolled in and attending any college of medicine in Alabama and who contract with the Alabama Medical Education Consortium to practice for five (5) years after the completion of their residency in rural areas of the state with the greatest need for physicians, with funds allocated through the Alabama Department of Public Health.  The SHCC also supports funding and development of workforce development efforts between academic centers (e.g. community colleges, vocational schools, career centers, etc.) and healthcare providers to develop a pipeline of career-ready healthcare professionals.
      4. 4. Rural Tax Credits.  The SHCC encourages renewal and/or passage of rural tax credits to primary care physicians and advanced practice providers (“APP”) who practice in rural areas.
      5. 5. Physician Recruitment.  The SHCC encourages the secondary school systems to coordinate medical student recruiting efforts with the medical schools.
      6. 6. APP Training.  The SHCC encourages schools of higher education to develop and expand APP training programs for utilization of such personnel in rural hospital emergency departments and/or rural health clinics.  Encourage the continued support and recruitment of nurse practitioners and nurse midwives and expand the number of nurse practitioner programs in the state.

      7. 7. APP Utilization.  Develop and implement programs to promote the utilization of APPs by:

         1. (i) Licensure and physician supervision requirements should be modified where access to care is hindered.
         2. (ii) Promoting reimbursement by all payors.

   5. (e) Health professionals working in rural areas need the right tools for success.  Telemedicine is one tool that can be used to support both rural patients and rural providers.  Not only do these services improve access by connecting remote patients with specialists located elsewhere, but they provide much-needed peer support to rural health professionals who often work in professional isolation.  Telemedicine may prove to be critical in improving provider recruitment and retention, though challenges remain with broadband availability and reimbursement.

      1. 1. Expand Opportunities to Utilize Telehealth.  Rural hospitals face unique challenges to provide access to care.  Rural facilities are often located an hour or more away from the next closest hospital or clinic.  Both providers and patients must travel greater distances to receive face-to-face care.  Increasing the utilization of telehealth provides the opportunity to address these barriers to care.  Telehealth services can include virtual visits originating at a patient’s home or at a medical facility, remote patient monitoring and specialist consults between hospitals.  The SHCC encourages policymakers to support innovation in telehealth in the following ways:

         1. (i) Support reimbursement of telehealth services at the same rate as face to face services.
         2. (ii) Expand the definitions to allow patients to receive services in their homes.
         3. (iii) Continue to invest in high-speed broadband access.
         4. (iv) Create and invest in communication and marketing materials on the benefits of telehealth and focus distribution of those materials in the rural underserved communities as part of the rural community plan.
         5. (v) Financially support, fund and encourage rural community hospitals to provide telehealth education and develop telehealth portal locations for community access.

      2. 2. EMS Personnel.  The SHCC encourages state stakeholders to determine how EMS personnel and certified paramedics could be utilized in rural areas beyond stabilization/transport and develop policies and reimbursement mechanisms for such paramedical professional utilization.

         
         [1] http://alabamapublichealth.gov/ruralhealth/assets/ALRuralHealthPlan2016Update.pdf[2] https://www.alabamapublichealth.gov%2Fhealthrankings%2Faccess-to-care.html&usg=AOvVaw3CCf&-n_LelEqPqpwplkVg[3] https://www.arc.gov/research/researchreportdetails.asp?REPORT_ID=138[4] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3336194/ [5] https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet.html[6] https://www.census.gov/quickfacts/AL [7] https://uknowledge.uky.edu/cgi/viewcontent.cgi?article=1007&context=ruhrc_reports[8] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1702512/

Author: Statewide Health Coordinating Council (SHCC)

Statutory Authority: Code of Ala. 1975, §22-21-260(4).

History: Effective May 18, 1993. Amended: Filed June 19, 1996; effective July 25, 1996. Repealed and New Rule: Filed October 18, 2004; effective November 22, 2004. Amended (SHP Year Only): Filed December 2, 2014; effective January 6, 2015. Repealed and New Rule: Published March 31, 2020; effective May 15, 2020. Repealed and New Rule: Published April 30, 2024; effective June 14, 2024.