Currently,
FQHCs are paid using a cost-based, all-inclusive rate (“AIR”) per visit, for
medically-necessary professional services that are furnished face-to-face with
an FQHC practitioner, with technical components such as x-rays, laboratory
tests, and durable medical equipment being billed separately to Medicare Part
B.[1]
However,
the Affordable Care Act added §1834(o) of the Social Security Act, which
establishes, effective October 1, 2014, a new system of payments for the costs
of FQHC services, under Medicare Part B, based on prospectively set rates. The rule proposes the methodology for the new
FQHC PPS, which is to establish a
national, encounter-based rate for all FQHCs and pay FQHCs a single
encounter-based rate for professional services furnished per beneficiary
per day. The encounter-based rate will
be based on the average cost per visit (total FQHC cost divided by total FQHC
encounters) using Medicare cost report and claims data. The rule proposes to adjust the
encounter-based payment rate: (1) for geographic differences by using a
geographic practice cost index (GPCI); (2) when a FQHC furnishes care to a
patient that is new to the FQHC; or (3) when a FQHC furnishes care to a
beneficiary receiving a comprehensive initial Medicare visit. The rule states that the proposed FQHC PPS
is estimated to have an overall impact of increasing total Medicare payments to
FQHCs by approximately 30 percent.
For
further questions on FQHCs or this new prospective payment system please
contact Kristen Gentry at kgentry@kdlegal.com or Meghan
Linvill McNab at mmcnab@kdlegal.com.
[1]
42 CFR 405.2463.