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Policy Innovation Profile

Increased Reimbursement and Dedicated Funds Allow Remote Primary Care Clinics to Provide Around-the-Clock Care, Leading to Fewer Medical Evacuations and Higher Quality of Care


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Snapshot

Summary

The Frontier Extended Stay Clinic program combines a change in reimbursement policy with additional Federal funding to allow five primary care clinics in remote areas in Alaska and Washington to stay open around the clock to care for seriously injured or ill patients who cannot be transported to the nearest hospital, and for patients who need a period of monitoring and observation before returning home. Through two Federal demonstration projects, these clinics receive additional reimbursement to cover longer stays (up to 48 hours), along with dedicated funds to cover the costs of facility upgrades and additional staffing. Together, these two policy changes have significantly reduced medical evacuations (saving nearly $14 million), improved quality of care, and generated high levels of satisfaction among community members served by the clinics.

Evidence Rating (What is this?)

Suggestive: The evidence consists of post-implementation estimates of the number of medical evacuations (and associated costs) avoided due to the availability of around-the-clock care, a review of newly available equipment and quality improvement efforts at participating clinics, and feedback from patients and families served by these clinics.
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Developing Organizations

Alaska FESC Consortium; SouthEast Alaska Regional Health Consortium
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Date First Implemented

2004
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Patient Population

Roughly one-half of the patients at the four Alaska sites are Alaska Natives, a population with above-average rates of poverty and risk of various chronic health conditions such as diabetes and obesity.3Race and Ethnicity > American indian or alaska native; Vulnerable Populations > Rural populationsend pp

Problem Addressed

Primary care clinics in frontier areas typically face a financial burden, as they often provide extended or "after-hours" care to severely ill and injured patients but do not get paid additional funds for doing so. In some cases, clinics lack the resources to continue caring for these patients, creating the need for expensive and sometimes dangerous medical evacuations to distant hospitals.

  • Frequent need for extended care: In frontier regions, primary care clinics often care for seriously ill and injured patients for extended periods of time. In many cases, the nearest hospital may be 1 hour or more away, and inclement weather makes transportation by road, water, or air unreliable and dangerous.1 In other cases, patients do not necessarily require hospital care but need overnight treatment or observation before returning home.1
  • Financial burden: The frequent provision of extended-stay services can place a severe financial burden on frontier clinics. Such care often requires new staff and equipment, but Medicare, Medicaid, and most other third-party payers do not provide additional reimbursement for extended stays. As a result, clinics providing after-hours and weekend care often must cut other services, such as primary care or preventive services.2 In some cases, financial losses from nonreimbursed extended care may jeopardize the clinic's survival.
  • Expensive evacuations: In some cases, resource constraints prevent frontier clinics from continuing to serve patients in need of extended care, creating the need for expensive, potentially dangerous medical evacuations to the nearest hospital.

What They Did

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Description of the Innovative Activity

The Frontier Extended Stay Clinic (FESC) program combines a change in Medicare reimbursement policy with additional Federal funding to allow five primary care clinics in remote areas in Alaska and Washington to stay open around the clock to care for seriously injured or ill patients who cannot be transported to the nearest hospital and for patients who need a period of monitoring before returning home. Through two Federal demonstration projects, these clinics receive additional reimbursement to cover longer stays (up to 48 hours), along with dedicated funds to cover the costs of facility and staff upgrades. Key elements of these policy changes are outlined below:
  • Eligible clinics: The FESC program covers four clinic sites in Alaska (Klawock, Glennallen, Unalaska, and Haines) and one in Washington (Friday Harbor). Each of these clinics meets the definition of an "extended-stay clinic" as laid out in the Medicare Prescription Drug Improvement and Modernization Act of 2003 (the legislation authorizing changes in reimbursement practices). According to this legislation, extended-stay clinics must be at least 75 miles away from the nearest short-term acute care or critical access hospital, or such a clinic must be inaccessible by public road. The clinics are designed to serve two different types of patients, as outlined below: 
    • Seriously ill patients in need of hospital care: These patients (e.g., those who have had heart attacks or experienced severe trauma) often cannot be transported in a timely manner to a hospital due to adverse weather conditions, darkness, impassable roads, or lengthy transit time.
    • Sick patients in need of observation: These patients need to be monitored for a limited period of time. Examples include patients needing intravenous hydration, observation after neurological injury, and assessment of chest pain.
  • Additional reimbursement based on length of stay: Traditional Medicare reimbursement policy pays these clinics for the provision of up to 4 hours of care. Under this 3-year demonstration project (March 2010 to March 2013), the five participating clinics receive additional reimbursement for stays that last longer than 4 hours. Under the revamped policy, Medicare part B pays the clinics in Alaska $541 for each 4-hour block of time, up to a maximum of 48 hours (or 12 4-hour blocks). The reimbursement for the Washington clinic works the same way, with each 4-hour block reimbursed at $480. This payment covers any ancillary services provided to these patients (e.g., laboratory tests, x-rays), and it takes the place of normal clinic reimbursement for the visit. In Alaska (but not Washington state), Medicaid also provides additional reimbursement for extended-stay patients through an all-inclusive, 4-hour block rate that can be billed multiple times a day.
  • Funding for clinic enhancements: Through a related demonstration project, the Federal Office of Rural Health Policy (ORHP), located within the Health Resources and Services Administration (HRSA), has provided roughly $1.5 million a year to the participating clinics since 2004 to help them meet Federal requirements related to the provision of 24-hour care. The clinics have used these funds to hire additional staff (primarily nurses), purchase equipment (e.g., defibrillators, x-ray machines), and upgrade facilities to comply with safety regulations (e.g., installing sprinkler systems).

Context of the Innovation

For many years, primary care clinics in Alaska provided extended services to patients who could not be transported to another facility because of extreme weather conditions, yet they did not get reimbursed for the additional costs of providing this care. In the 1990s, advocates for these clinics began meeting to develop a new model to address this problem. These advocates included leaders of the Alaska Office of Rural Health (a State agency that works to strengthen rural health care delivery), primary care clinic administrators and associations, and congressional representatives. They concluded that remote communities needed facilities that serve (and get paid) as more than a primary care clinic but less than a hospital. To that end, in the late 1990s the group came up with the concept of a "frontier extended-stay clinic" and began working to secure funding and payment policy changes needed to make this type of facility financially sustainable. The organizations that participate in the demonstration project include the following:
  • The SouthEast Alaska Regional Health Consortium (SEARHC), a nonprofit tribal health consortium of 18 Native communities that serves Tlingit, Haida, Tsimshian, and other Native people of Southeast Alaska. SEARHC runs the clinics in Klawock and Haines.
  • The Iliuliuk Family and Health Services, which runs the clinic in Unalaska, AK.
  • The Cross Road Medical Center, which runs the clinic in Glennallen, AK.
  • The Inter Island Medical Center, which runs the clinic in Friday Harbor, WA.

Did It Work?

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Results

The two policy changes have significantly reduced medical evacuations (saving nearly $14 million), improved quality of care, and generated high levels of satisfaction among community members served by the clinics.
  • Fewer medical evacuations (saving $14 million): Between August 2005 and September 2010, the availability of extended-hour care resulted in an estimated 1,783 medical evacuations being avoided. (The sites offered varying levels of extended care before the policy changes went into effect.) The reduction in evacuations saved an estimated $13.9 million over the 5-year period, somewhat offsetting the program's cost.
  • Higher quality: A comprehensive third-party evaluation (conducted by the Rural Policy Research Institute Center for Rural Health Policy Analysis at the University of Iowa's College of Public Health) found that the policy changes have improved the quality of care provided at the clinics, due primarily to the availability of new diagnostic and therapeutic equipment and targeted quality improvement initiatives. For example, one or more clinics have done the following:
    • Implemented a case review system (based loosely on Hospital Compare measures) for all patients who present with myocardial infarction, adults with community-acquired pneumonia, and all observation stays that resulted in a transfer
    • Installed additional diagnostic equipment, including laboratory and x-ray equipment, that allows more patients to stay for observation
    • Developed policies for dietary and other extended-stay services
    • Had staff undergo extensive training to improve documentation and coding practices
    • Had nursing staff complete extensive continuing medical education training to meet Alaska Board of Nursing requirements for expanded scope of practice for taking x-rays
  • High satisfaction: The third-party analysis also concluded that community residents served by the five around-the-clock clinics "appreciate a sense of safety and security knowing that local health care professionals are immediately available at all times," and noted that the clinics "support the cultural role of family togetherness during illness by reducing the number of patients transferred out of the community." Citizens treated at the clinics routinely praise the care they receive; for example, one citizen said, "That clinic saved my life."

Evidence Rating (What is this?)

Suggestive: The evidence consists of post-implementation estimates of the number of medical evacuations (and associated costs) avoided due to the availability of around-the-clock care, a review of newly available equipment and quality improvement efforts at participating clinics, and feedback from patients and families served by these clinics.

How They Did It

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Planning and Development Process

Key steps included the following:
  • Enabling legislation for reimbursement policy changes: The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 gave authority to the Centers for Medicare and Medicaid Services (CMS) to conduct a demonstration project to reimburse extended-stay care received by Medicare beneficiaries.
  • Separate legislation to fund clinics: Beginning in 2004, Congress funded a separate demonstration project administered by ORHP. This funding enabled the creation of the Alaska FESC Consortium, an umbrella organization working to implement the FESC model. SEARHC serves as the lead agency for the consortium.
  • Securing participation in demonstration project: In August 2006, CMS announced a 3-year demonstration of the FESC model and published a request for proposals (RFP) in the Federal Register. The RFP includes detailed "conditions of participation," such as the criteria by which patients would be eligible for FESC services, which practitioners could treat these patients, scope of services, safety requirements, and other rules. Through the Alaska FESC Consortium, organizations in Alaska, Washington, and Montana that manage six primary clinics in frontier areas (four in Alaska, one in Washington, and one in Montana) jointly responded to the RFP. Before submitting the application, the organizations used ORHP funding to bring their clinics into compliance with the conditions of participation, including enacting many policy changes and remodeling several of the clinic sites. In 2007, CMS named the six clinics to be part of the demonstration project. Not long after being accepted, leaders of the site in Montana withdrew from the project after reviewing its requirements more closely.
  • Initiation of new reimbursement policy: In April 2010, the site in Friday Harbor, WA, received CMS certification related to the new Medicare reimbursement practices. The four sites in Alaska received similar certifications during the next few months.

Resources Used and Skills Needed

  • Staffing: Each of the five clinics employs roughly 50 to 80 people, including physicians, dentists, pharmacists, nurse practitioners, registered nurses, physician assistants, emergency workers, and administrative staff.
  • Costs: It costs a clinic roughly $1 million annually to provide after-hours and extended-stay services.
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Funding Sources

Office of Rural Health Policy
Between fiscal years 2004 and 2012, OHRP provided approximately $12.7 million directly to the participating clinics to cover the costs of facility upgrades, diagnostic and therapeutic equipment and supplies, and additional staff to allow for around-the-clock care.end fs

Tools and Other Resources

Additional information about the Alaska FESC Consortium is available at: http://www.alaskafesc.org/.

Adoption Considerations

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Getting Started with This Innovation

  • Conduct needs assessment: Primary care clinics in remote areas should thoroughly evaluate the demand for evening and overnight service before extending their hours. Factors to consider include the distance to the nearest hospital, the number of patients who require medical evacuation (and the cost of such evacuations), the number of patients who require extended and overnight stays, and the anticipated cost of providing such care.
  • Explore funding options: This initiative represents one financial model for expanding a primary care clinic (i.e., dedicated Federal funds combined with increased Medicare reimbursement). However, other models may also be effective, such as funding from State or local agencies or private donors, or enhanced reimbursement from Medicaid (as exists in Alaska) and private payers.

Sustaining This Innovation

  • Focus on documentation: Because reimbursement policies play such a critical role in allowing an extended-stay clinic to survive, accurate and systematic coding and billing become quite important. To that end, frontier clinics should hire and train qualified administrative staff and charge those staff with staying abreast of any procedural changes initiated by major payers and with identifying and resolving payer-related problems in a timely manner.
  • Elicit and act on patient feedback: Through regular patient satisfaction surveys, clinic leaders can identify and act on opportunities to enhance patient care, especially during evening and overnight hours.

More Information

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Contact the Innovator

Patricia Atkinson
Program Manager
Southeast Alaska Regional Health Consortium
222 Tongass Drive
Sitka, AK 99835
Tel: (907) 966-8662
Cell: (907) 317-0619
E-mail: patricia.atkinson@searhc.org

Innovator Disclosures

Ms. Atkinson reported that her employer, the Southeast Alaska Regional Health Consortium, receives funding from ORHP as part of the demonstration project.

References/Related Articles

MacKinney AC, Mueller AJ, Ullrich F, et al. Frontier extended stay clinic evaluation. Rural Policy Research Institute. Iowa City (IA). 2012 Apr. Available at: http://blog.ruralhealthweb.org/wp-content/uploads/FESC-Final-Report-RUPRI-April-2012.pdf (If you don't have the software to open this PDF, download free Adobe Acrobat ReaderĀ® software External Web Site Policy.).

Footnotes

1 National Rural Health Association. Designation of frontier health professional shortage areas. Kansas City. 2010. Available at: http://www.ruralhealthweb.org/index.cfm?objectid=409F70C8-1185-6B66-8890DCD9F8F91107.
2 SouthEast Alaska Regional Health Consortium. Frontier extended stay clinics: a program overview. 2012 Dec.
3 James C, Schwartz K, Berndt J. A profile of American Indians and Alaska Natives and their health coverage. Henry J. Kaiser Family Foundation. 2009 Sept. Available at: http://www.kff.org/minorityhealth/upload/7977.pdf.
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Original publication: May 22, 2013.
Original publication indicates the date the profile was first posted to the Innovations Exchange.

Last updated: May 22, 2013.
Last updated indicates the date the most recent changes to the profile were posted to the Innovations Exchange.