FCHIP Update

The initial FCHIP Demonstration ended on August 31, 2019. On December 21, 2020, an extension of the demonstration was announced within the Consolidated Appropriations Bill of 2021. The demonstration was re-initiated on March 16, 2022, with the associated waivers continuing for another 5 years. The previous participating CAHs in Montana and North Dakota will move forward with the renewed demonstration, however, the Nevada facilities opted not to continue their participation. Unfortunately, MHREF will no longer be providing the Technical Assistance portion of the project offered during the initial 3-year period as this contract was awarded to another entity selected by CMS/CMMI during the application process. Although MHA/MHREF regrets not having the opportunity to continue this valuable work with the participants, we are excited to see the demonstration continue and are confident the participating CAHs will take full advantage of the waivers offered to further enhance and improve the healthcare of their patient population and surrounding communities. It was a privilege for us to be a part of this potentially very impactful project. We would like to thank the participating facilities for their dedication and hard work during our tenure with them.

Supporting Care in Rural Areas

MHA provides technical assistance, site implementation assistance, and other tracking and analytic activities to support providers participating in the Frontier Community Health Integration Project (FCHIP) Demonstration in identifying potential new approaches to health care delivery, reimbursement, and coordination in sparsely populated areas. Frontier facilities from Montana, North Dakota and Nevada participate in the program.


The introduction of the Critical Access Hospital (CAH) provider type in 1997 intended to support essential care in rural areas by changing the Medicare reimbursement model to reflect reasonable cost by replacing the inpatient and outpatient prospective payment system for qualifying facilities. However, due to significantly low patient volumes and a non-comprehensive service payment change for Medicare cost-based reimbursement, rural facilities continued to struggle with financial solvency. The closure of rural, frontier facilities throughout the nation and the subsequent impact on underserved communities was recognized and addressed at the federal level.

The Medicare Improvement for Patients and Providers Act (MIPPA) was signed into law in July 2008, becoming effective January 2010. The language within MIPPA, specifically in section 123, authorized the Secretary of Health and Human Services to establish a demonstration project to develop and test new models for the delivery of acute, extended and other essential health care services to Medicare and Medicaid beneficiaries in certain frontier counties with the objective of improving access and better integrating the delivery of services at the frontier setting.

Developing a Frontier Health Delivery System

In response to the MIPPA legislation and subsequent funding by Congress, in August 2010, the Health Resources and Service Administration/Office of Rural Health Policy (HRSA/ORHP) awarded an 18-month cooperative agreement to the Montana Health Research and Education Foundation (MHREF) to assist in the development of a frontier health delivery system. In November 2012, MHREF, the Montana Office of Rural Health, and nine Montana frontier facility CEOs and their consultants, submitted a document to HRSA and CMS titled Framework for a New Frontier Health System Model, the effort of months of intensive collaborative work. The document provided an overview of the challenges facing frontier providers and communities and introduced a potential model for a new integrated ‘Frontier Health System’ that would assist in the development of a demonstration aiming to achieve the goals in the authorizing legislation.

A demonstration of this proposed ‘Frontier Health System’ model would potentially influence future policy while ensuring access for much needed health care services in frontier communities. The information within the ‘Framework’ formulated the design for the ‘Frontier Community Health Integration Project’ (FCHIP).

In addition to this framework document, which provided a cursory look at the challenges and opportunities facing frontier communities, MHREF delivered six white papers providing more in-depth analysis, information, and data regarding specific frontier health care service delivery issues. These white paper topics included:

On January 31, 2014, CMS announced their plans and vision for FCHIP within the contents of the ‘CMS Frontier Community Health Integration Project/Demonstration Design and Solicitation’ document. The final solicitation document did not contain the ‘Frontier Health System’ vision the creators of the   ‘Framework’ had intended, but rather focused on four specific service areas. A description of the waivers and the corresponding reimbursement methodology were listed within the document:

Telehealth: Allowed for cost based reimbursement to the CAH originating site, limited to staffing and overhead cost associated with providing telehealth services; the waiver would also allow for reimbursement when using asynchronous ‘store and forward’ technology

Home Health: Enhanced payment for travel, $1.054 per mile, up to a maximum of $1680 per episode

Swing Bed Expansion: Increased the bed limit for CAHs from 25 to 35 and allowing for cost based reimbursement for staffing costs associated with the additional beds

Ambulance: Eliminated the ‘35 mile rule’ for CAH’s providing or owning ambulance services; allowed for cost based reimbursement for EMS staff


MIPPA legislation stipulated a 3-year demonstration project be conducted, limited to eligible CAH’s located in not more than four states in which at least 65 percent of the counties in the state have 6 or fewer residents per square mile. Meeting this requirement were the states of Alaska, Montana, North Dakota and Wyoming. Other eligibility criteria included:

  • Be an existing critical access hospital (CAH) located in a frontier-eligible state
  • Have an average acute-care census of five patients or less
  • Provide home health, hospice or physician services

Of the 113 CAHs, in the four states mentioned within MIPPA, 71 met the stipulated frontier eligibility criteria.

Thirteen CAH’s from the states of Montana, North Dakota and Nevada (Nevada was later added to the list of eligible states with in the CMS solicitation document), submitted applications requesting participation with FCHIP. Of the thirteen applications received, ten CAH’s applied for Telehealth (Montana-3, North Dakota-3, Nevada-4); five for Ambulance (Montana-1, North Dakota-4); one for Home Health (North Dakota); and  three for Bed Expansion (Montana-2, North Dakota-1).

In August 2014, MHREF received an award notification for the ‘Frontier Community Health Integration Project Technical Assistance, Tracking and Analysis Program’ from HRSA, targeting a grant project period of September 1, 2014 through August 31, 2017. MHREF initiated the early phases of project implementation anticipating the imminent announcement of waiver awards.

On August 3, 2015, HRSA received word from CMS that FCHIP project description and details had been sent to the Office of Management and Budget (OMB) for the final approval process.

On February 9th, 2016, CMS received notification of OMB approval for the FCHIP Demonstration. In mid-February, ten CAHs received award recipient notification letters from CMS. The notification letters indicated an anticipated Demonstration start date of August 1, 2016. The North Dakota CAH who had applied for the Home Health waiver received a letter of denial. This award denial unfortunately officially terminated the Home Health waiver portion of the demonstration. In addition, the waiver allowing for reimbursement when using asynchronous ‘store and forward’ technology was removed from the final waiver options.

FCHIP Participates/Awardees

Dahl Memorial Healthcare Association, Inc.
Dahl Memorial Healthcare Association, Inc.

Ekalaka, MT

Nadine Elmore, CEO

Waiver: Telehealth

(Ryan Tooke current CEO)

McCone County Health Center
McCone County Health Center

Circle, MT

Nancy Rosaaen, CEO

Waivers: Telehealth & Swing Bed Expansion

Roosevelt Medical Center
Roosevelt Medical Center

Culbertson, MT

Audrey Stromberg, Administrator

Waivers: Telehealth, Ambulance, & Swing Bed Expansion

Jacobson Memorial Hospital Care Center
Jacobson Memorial Hospital Care Center

Elgin, ND

Theo Stoller, CEO

Waiver: Swing Bed Expansion

McKenzie County Healthcare Systems, Inc.
McKenzie County Healthcare Systems, Inc.

Watford City, ND

Daniel Kelly, CEO

Waiver: Telehealth

Southwest Healthcare Services
Southwest Healthcare Services

Bowman, ND

Dennis Goebel, CEO

Waiver: Ambulance

(Amanda Loughman Interim CEO)

Battle Mountain General Hospital
Battle Mountain General Hospital

Battle Mountain, NV

Peggy Lindsey, CEO

Waiver: Telehealth

(Jason Bleak current CEO)

Grover C. Dils Medical Center
Grover C. Dils Medical Center

Caliente, NV

Jason Bleak, CEO

Waiver: Telehealth

(Missie Rowe current CEO)

Mount Grant General Hospital
Mount Grant General Hospital

Hawthorne, NV

Richard Munger, Administrator

Waiver: Telehealth

(Hugh Qualls current CEO)

Pershing General Hospital
Pershing General Hospital

Lovelock, NV

Patricia Bianchi, CEO

Waiver: Telehealth

(Cynthia Hixenbaugh current CEO)

Launching the Demonstration

While awaiting Demonstration announcement, MHREF and other FCHIP team members began the initial phases in program design. Multiple tele-conferencing to facilitate introductions of team members of the various contracted entities were conducted. MHREF, HRSA and the CMS Implementation Contractor team, along with an appointed panel of data experts, worked on the development of a set of metrics to monitor quality and to measure project outcome and success. Once announcement was received, a formal webinar hosted by CMS and involving all contracted entities was held, welcoming award recipients.

The three-year demonstration, August 1, 2016 through July 31, 2019, could potentially have significant impact on future rural healthcare initiatives. Throughout the demonstration timeframe, MHREF, in collaboration with HRSA and CMS contracted entities, provided technical assistance and guidance, working directly with the participating CAHs to increase access, improve quality, and reduce the cost of care frontier CAH’s provide to their community members with the ultimate objective of sustaining viability for these very remote rural facilities and for frontier healthcare overall.


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