CMS Releases RHC/FQHC Regulations
The Centers for Medicare and Medicaid Services (CMS) has published a proposed rule impacting Rural Health Clinic (RHC) and Federally Qualified Health Center (FQHC) operations. The proposed rule is now available here online
NRHA staff is beginning our review of the proposed rule. A first review indicates that CMS is revising location requirements and designation exceptions. It also appears to be adding a requirement for RHCs to obtain or renew their designation every three years. In addition, the proposed rule would require new conditions of participation for clinics in the RHC program and change the calculation of payment rates for RHCs and FQHCs. A brief summary of the proposed rule follows:
Highlights of the proposed rule
Our initial review indicates the following highlights from the proposed rule:
- RHC location requirement for designation - RHCs must be located in rural, underserved areas to obtain their designation.In the past, once an RHC was designated, they were allowed to keep their RHC status permanently.CMS is changing this, requiring an RHC to renew their designation every three years provided their service area still is in a rural area and meets the shortage designation requirements.In addition, CMS is changing the way it defines rural, now using the Rural Urban Commuting Areas (RUCA) designations.There are a couple of technical exceptions to this provision that will be detailed in the forthcoming NRHA RHC Regulatory Guide.
- Payment change for RHCs and FQHCs - CMS is proposing a change to the way it calculates reasonable cost in their cost-based reimbursement rates for these providers.Currently the law says payments cannot exceed 80 percent of reasonable cost.However, in many instances RHCs and FQHCs can receive more than 100 percent of reasonable costs if they also receive co-pays or Medicaid supplements.This will no longer be allowed.
- Requirements to waive payment cap for provider-based RHCs - CMS is proposing changes to those hospitals that qualify to waive the payment cap for provider-based RHCs. These facilities will need to be located in an area with a RUCA score of 9 or 10 and be under 50 beds for their average daily census.This may allow more provider-based facilities to waive the payment cap.
- New requirements for participation - CMS is proposing that RHCs have to implement the following quality programs to remain an RHC:
- Quality Assessment and Performance Improvement Program - All RHCs would have to implement a quality improvement program with objective measures, adoption of performance measures and a plan to identify priorities.
- Infection Control plan - Both RHCs and FQHCs would be required to create and implement an infection control plan, including training, oversight and reporting of staff conducting clinical activities that control infections.
- Emergency services and training - RHCs and FQHCs are already required to provide services in medical emergencies. This proposed rule would update the requirements for the current industry standards, include requirements around the purchase of equipment but eliminate the current prescriptive drug list.
The NRHA was listed by CMS as one of the resources for these quality programs in the proposed rule. Stay tuned to our web site and conferences for technical assistance in implementing the new requirements in the proposed rule.
The rule has a number of other payment and participation requirements that NRHA is reviewing. We will continue to update NRHA members on how this proposed rule will impact the health of rural Americans. For now, more information is available from CMS:
More on the regulatory process
Whenever the federal government makes a regulatory change, the agency responsible for the change must offer the general public an open comment period to express their views on the proposed regulation. The agency must then respond to each of these comments. For this proposed rule comments must be received by CMS 60 days after publication in the Federal Register, which we expect to be Aug. 27, 2008. This is the second time CMS has proposed an overhaul of the RHC program. In 2003, they were forced to withdraw a final rule. Rural advocates need to again pay significant attention to these proposed changes, as they could have a significant impact on the main primary care providers in rural communities, especially RHCs.
