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Pennsylvania Rural Health Model

Providing Financial Stability to Rural PA Hospitals Transitioning to Value-Based Care through Global Budget Payments

Through a Cooperative agreement with the Centers for Medicare and Medicaid Innovation (CMMI) and the Pennsylvania Department of Health, the RHRCO has been serving as the lead facilitator of the Pennsylvania Rural Health Model (PARHM) since its inception.  The Model is an innovative CMMI demonstration designed to provide financial stability to rural hospitals and preserve access to care in maintained in their communities. 

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About the Model

"If it wasn't for the PA Rural Health Model, our hospital would not have survived the COVID-19 pandemic."

- PARHM Participating Hospital Executive

PARHM is the first of its kind alternative payment model aimed at transforming healthcare in rural Pennsylvania to deliver value-based care. This Model was created to address the financial challenges faced by rural hospitals by transitioning them from fee-for-service to global budget payments. This methodology fully migrates a hospital from volume-based to VALUE-based, allowing them to better meet the needs of their community and improve population health without concern for its impact on their bottom line.


Through the footprint of the eighteen participant hospitals, it has been calculated that 1.3 million Pennsylvanians are impacted by the PARHM which accounts for approximately 10% of the state’s population.


In the PARHM, the RHRCO team provides technical assistance to participant hospitals through a strategic transformation planning process to drive improvements to population health and access to care in their communities. Specific efforts being pursued vary by hospital and include goals such as telehealth implementation, service line expansions, and improved care management but all goals can be attributed to three main transformation categories set forth by CMMI:

  1. Improve access to care

  2. Improve population health

  3. Decrease deaths due to substance use disorder.

As the Model has progressed, its effects are beginning to be seen. Preliminary results show that the Medicare spend per-member-per-month continues to be below the rural spend by beneficiary for PARHM hospitals compared to the national rural average.

In addition, for hospitals where applicable data is available:

  •  80% improved avoidable utilizations

  • 83% improved HAC scores, and

  • 100% maintained their CMS readmission rates.


Preliminary data being tracked within the program has identified that while cost per beneficiary remains below the national rural average, quality outcomes as measured by the statewide measures are above average. 

"The Model has transformed our hospital's focus from providing sick-care to providing health care." 

- PARHM Participating Hospital Executive

As the program has progressed and rapport has evolved among participants, hospitals are beginning to pursue joint collaborations with external community partners and neighboring participants to drive larger impacts across the state (e.g., the Peer Recovery Expansion Project). The RHRCO is motivated by these joint initiatives and recognizes the tremendous opportunity to impact population health at a greater magnitude through a mindset of collaboration versus competition.

We pride ourselves on forming meaningful relationships with all of our partners and stakeholders, recognizing that this sets the foundation for success in all aspects of our work. As the RHRCO continues the administration of the PARHM,  we are committed to understanding and addressing the unique needs of each community we serve. 

"Evaluating a new model for funding rural healthcare in Pennsylvania"

Model Participants

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Our Partners

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