Rural Health Clinic Update

David Worgo

Centers for Medicare and Medicaid Services (CMS)

410-786-5919

david.worgo@cms.hhs.gov

RHC Rule Update

On February 28, 2000, CMS issued a proposed rule to revise certification and payment requirements for RHCsas required by the BBA. The final RHC rule was issued on December 24, 2003.

In light of the fact that section 902 of MMA of 2003 requires the Secretary to issue regulations within 3 years, CMS is republishing the provisions of the final RHC rule as a proposed rule to provide the public with an opportunity to formally comment on the new policies established under the December 24, 2003 final RHC rule.

RHC Rule Update

Provisions of new proposed rule:

Prevents inappropriate growth by requiring RHCsto have a current/valid shortage area designation.

Gives CMS the authority to disqualify RHCsno longer located in rural underserved areas and grant exceptions to clinics deemed essential to primary care for their communities.

Establishes procedures and standards for granting an exception from RHC disqualification.

Requires all participating RHCsto establish a Quality Assessment and Performance Improvement (QAPI) program.

Holds hospital-based RHCsto the same payment system and limits as independent RHCs, except for clinics based in small hospitals.

Eliminates opportunities for duplicate payments by prohibiting the simultaneous operation of an RHC and another physician practice, which is referred to as commingling.

MA Influence on RHCs

MA Influence on RHCs

Although Regional PPOsare permitted to pay contracting RHCs, CAHsand FQHCson a cost basis (or at rates equal to costs), such terms of payment must be requested and negotiated by the provider.

MA plans are not mandated by Federal law to pay contracting RHCs, CAHsand FQHCson a costs basis.

CMS is not obligated to provide supplemental payments to cover the difference, if any, between the MA payment to the RHC or CAH and the payment the clinic or hospital would be entitled to receive under their cost-based payment system.

MA Influence on RHCs

MA Influence on RHCs

If a rural provider prefers to treat MA enrollees on a non-contract basis, Federal law requires that all MA plans pay them not less than what you would have received for the same service under original Medicare payment rules.

For RHCsthat means cost-based reimbursement. --or rates equivalent to their costs.

MA regulations also require that MA plans, which pay providers on a non-contract basis, include in their payment any Medicare “add-on” payments that are part of the FFS payment that you would have otherwise received from the Medicare FI or Carrier.

MA Plan Requirements

In order for regional PPO plans as well as local level plans to participate under the MA program in 2006, they must provide:

Reasonable access and availability to health care providers consistent with community patterns of care. MA provider access standards will be monitored and evaluated by CMS ROsin consultation with CO.

All MA plans must also provide prompt payments to health care providers treating MA members.