Medicare Program; Prospective Payment System for Federally Qualified Health Centers; Changes to Contracting Policies for Rural Health Clinics; and Changes to Clinical Laboratory Improvement Amendments of 1988 Enforcement Actions for Proficiency Testing Referral, 58385-58414 [2013-22821]
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Vol. 78
Monday,
No. 184
September 23, 2013
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
42 CFR Parts 405, 491, and 493
Medicare Program; Prospective Payment System for Federally Qualified
Health Centers; Changes to Contracting Policies for Rural Health Clinics;
and Changes to Clinical Laboratory Improvement Amendments of 1988
Enforcement Actions for Proficiency Testing Referral; Proposed Rule
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Federal Register / Vol. 78, No. 184 / Monday, September 23, 2013 / Proposed Rules
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Parts 405, 491, and 493
[CMS–1443–P]
RIN 0938–AR62
Medicare Program; Prospective
Payment System for Federally
Qualified Health Centers; Changes to
Contracting Policies for Rural Health
Clinics; and Changes to Clinical
Laboratory Improvement Amendments
of 1988 Enforcement Actions for
Proficiency Testing Referral
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
establish methodology and payment
rates for a prospective payment system
(PPS) for federally qualified health
center (FQHC) services under Medicare
Part B beginning on October 1, 2014, in
compliance with the statutory
requirement of the Affordable Care Act.
This proposed rule would also establish
a policy which would allow rural health
clinics (RHCs) to contract with
nonphysician practitioners when
statutory requirements for employment
of nurse practitioners and physician
assistants are met, and make other
technical and conforming changes to the
RHC and FQHC regulations. Finally,
this proposed rule would make changes
to the Clinical Laboratory Improvement
Amendments (CLIA) regulations
regarding enforcement actions for
proficiency testing referral.
DATES: To be assured consideration,
comments must be received at one of
the addresses provided below, no later
than 5 p.m. on November 18, 2013.
ADDRESSES: In commenting, please refer
to file code CMS–1443–P. Because of
staff and resource limitations, we cannot
accept comments by facsimile (FAX)
transmission.
You may submit comments in one of
four ways (please choose only one of the
ways listed):
1. Electronically. You may submit
electronic comments on this regulation
to https://www.regulations.gov. Follow
the ‘‘Submit a comment’’ instructions.
2. By regular mail. You may mail
written comments to the following
address ONLY: Centers for Medicare &
Medicaid Services, Department of
Health and Human Services, Attention:
CMS–1443–P, P.O. Box 8013, Baltimore,
MD 21244–1850.
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Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
3. By express or overnight mail. You
may send written comments to the
following address ONLY: Centers for
Medicare & Medicaid Services,
Department of Health and Human
Services, Attention: CMS–1443–P, Mail
Stop C4–26–05, 7500 Security
Boulevard, Baltimore, MD 21244–1850.
4. By hand or courier. Alternatively,
you may deliver (by hand or courier)
your written comments ONLY to the
following addresses prior to the close of
the comment period:
a. For delivery in Washington, DC—
Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, Room 445–G, Hubert
H. Humphrey Building, 200
Independence Avenue SW.,
Washington, DC 20201.
(Because access to the interior of the
Hubert H. Humphrey Building is not
readily available to persons without
Federal government identification,
commenters are encouraged to leave
their comments in the CMS drop slots
located in the main lobby of the
building. A stamp-in clock is available
for persons wishing to retain a proof of
filing by stamping in and retaining an
extra copy of the comments being filed.)
b. For delivery in Baltimore, MD—
Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, 7500 Security
Boulevard, Baltimore, MD 21244–1850.
If you intend to deliver your
comments to the Baltimore address, call
telephone number (410) 786–7195 in
advance to schedule your arrival with
one of our staff members.
Comments erroneously mailed to the
addresses indicated as appropriate for
hand or courier delivery may be delayed
and received after the comment period.
For information on viewing public
comments, see the beginning of the
SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Corinne Axelrod, (410) 786–5620 for
FQHCs and RHCs.
Melissa Singer, (410) 786–0365 for
CLIA Enforcement Actions for
Proficiency Testing Referral.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All
comments received before the close of
the comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post all comments
received before the close of the
comment period on the following Web
site as soon as possible after they have
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been received: https://
www.regulations.gov. Follow the search
instructions on that Web site to view
public comments.
Comments received timely will also
be available for public inspection as
they are received, generally beginning
approximately 3 weeks after publication
of a document, at the headquarters of
the Centers for Medicare & Medicaid
Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday
through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an
appointment to view public comments,
phone 1–800–743–3951.
Acronyms
AIR All-Inclusive Rate
APM Alternative Payment Methodology
CCN CMS Certification Number
CCR Cost-To-Charge Ratio
CFR Code of Federal Regulations
CLIA Clinical Laboratory Improvement
Amendments of 1988
CMP Civil Money Penalty
CMS Centers for Medicare & Medicaid
Services
CNM Certified Nurse Midwife
CP Clinical Psychologist
CSW Clinical Social Worker
CY Calendar Year
DSMT Diabetes Self-Management Training
E/M Evaluation and Management
FQHC Federally Qualified Health Center
FSHCAA Federally Supported Health
Centers Assistance Act
GAF Geographic Adjustment Factor
GAO Government Accountability Office
GPCI Geographic Practice Cost Index
HCPCS Healthcare Common Procedure
Coding System
HCRIS Healthcare Cost Report Information
System
HBV Hepatitis B Vaccines
HRSA Health Resources and Services
Administration
IDR Integrated Data Repository
IPPE Initial Preventive Physical Exam
MA Medicare Advantage
MAC Medicare Administrative Contractor
MCO Managed Care Organization
MEI Medicare Economic Index
MIPPA Medicare Improvements for Patients
and Providers Act
MNT Medical Nutrition Therapy
MUA Medically Underserved Area
MUP Medically Underserved Population
NP Nurse Practitioner
OBRA Omnibus Budget Reconciliation Act
PA Physician Assistant
PHS Public Health Service
PFS Physician Fee Schedule
PPS Prospective Payment System
PT Proficiency testing
ResDAC Research Data Assistance Center
RIA Regulatory Impact Analysis
RHC Rural Health Clinic
SNF Skilled Nursing Facility
UDS Uniform Data System
USPSTF U.S. Preventive Services Task
Force
UPL Upper Payment Limit
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Table of Contents
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
2. Summary of Major Provisions
a. Basis for Payment Under the FQHC PPS
b. Addressing Payment for Multiple Visits
on the Same Day
c. Beneficiary Coinsurance
d. Waiving Coinsurance for Preventive
Services
e. Transition Period and Annual
Adjustment
f. Other FQHC and RHC Provisions
g. CLIA Enforcement Actions for
Proficiency Testing Referral
3. Summary of Cost and Benefits
B. Overview and Background
1. FQHC Description and General
Information
2. Medicare’s FQHC Coverage and Payment
Benefit
3. Legislation Pertaining to Medicare and
Medicaid Payments for FQHC Services
4. Medicare’s Current Cost-Based
Reimbursement Methodology
5. Summary of Requirements Under the
Affordable Care Act for the FQHC PPS
and Other Provisions Pertaining to
FQHCs
6. Approach to the FQHC PPS
II. Establishment of the Federally Qualified
Health Center Prospective Payment
System (FQHC PPS)
A. Design and Data Sources for the FQHC
PPS
1. Overview of the PPS Design
2. Medicare FQHC Cost Reports
3. Medicare FQHC Claims
4. Linking Cost Reports and Claims To
Compute the Average Cost per Visit
B. Policy Considerations for Developing
the FQHC PPS Rates and Adjustments
1. Multiple Visits on the Same Day
2. Preventive Laboratory and Technical
Components of Other Preventive
Services
3. Vaccine Costs
C. Risk Adjustments
1. Alternative Calculations for Average
Cost per Visit
2. Geographic Adjustment Factor
3. New Patient or Initial Medicare Visit
4. Other Adjustment Factors Considered
5. Report on PPS Design and Models
D. Base Rate Calculation
E. Implementation
1. Transition Period and Annual
Adjustment
2. Medicare Claims Payment
3. Beneficiary Coinsurance
4. Waiving Coinsurance for Preventive
Services
5. Cost Reporting
6. Medicare Advantage Organizations
III. Additional Proposed Changes Regarding
FQHCs and RHCs
A Rural Health Clinic Contracting
B. Technical and Conforming Changes
IV. Clinical Laboratory Improvement
Amendments of 1988 (CLIA)—
Enforcement Actions for Proficiency
Testing Referral
A. Background
B. Proposed Changes
V. Other Required Information
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A. Requests for Data From the Public
B. Collection of Information Requirements
VI. Response to Comments
VII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Limitations of Our Analysis
D. Anticipated Effects of FQHCs PPS
1. Effects on FQHCs
2. Effects on RHCs
3. Effects on Other Providers and Suppliers
4. Effects on Medicare and Medicaid
Programs
5. Effects on Medicare Beneficiaries
E. Effects of Other Policy Changes
1. Effects of Policy Changes for FQHCs and
RHCs
2. Effects of CLIA Changes for Enforcement
Actions for Proficiency Testing Referral
F. Alternatives Considered
G. Accounting Table and Statement
H. Conclusions
Regulations Text
ADDENDUM—Proposed FQHC PPS
Geographic Adjustment Factors (GAFs)
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
The Affordable Care Act (Pub. L. 111–
148) added section 1834(o) of the Social
Security Act (the Act) to establish a new
system of payment for the costs of
federally qualified health center (FQHC)
services under Medicare Part B
(Supplemental Medical Insurance)
based on prospectively set rates.
According to section 1834(o)(2)(A) of
the Act, the FQHC prospective payment
system (PPS) is to be effective beginning
on October 1, 2014. The primary
purpose of this rule is to propose a
methodology and payment rates for the
new FQHC PPS.
This rule also proposes to allow RHCs
to contract with non-physician
practitioners, consistent with statutory
requirements that require at least one
nurse practitioner (NP) or physician
assistant (PA) be employed by the RHC.
The ‘‘Taking Essential Steps for
Testing Act of 2012’’ (TEST Act) (Pub.
L. 112–202) was enacted on December 4,
2012. The TEST Act amended section
353 of the Public Health Service Act
(PHS Act) to provide the Secretary with
discretion as to which sanctions may be
applied to cases of intentional PT
referral. The purpose of this proposal is
to amend the CLIA regulations to be in
alignment with the statutory change and
to propose the regulatory changes
needed to fully implement the TEST
Act.
2. Summary of the Major Provisions
a. Basis for Payment Under the FQHC
PPS
Under the PPS, we are proposing to
establish a national, encounter-based
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rate for all FQHCs and pay FQHCs a
single encounter-based rate for
professional services furnished per
beneficiary per day. The encounterbased rate would be calculated based on
an average cost per visit (that is, total
FQHC cost divided by total FQHC
encounters) using Medicare cost report
and claims data. We believe an
encounter-based payment rate for the
FQHC PPS will both provide
appropriate payment while remaining
administratively simple. An encounterbased payment rate is consistent with
our commitment to greater bundling of
services, and gives FQHCs the flexibility
to implement efficiencies to reduce
over-utilization of services. FQHCs are
accustomed to billing for a single
encounter and being paid through an
all-inclusive rate (AIR). An encounterbased payment is also similar to
Medicaid payment systems, and
Medicaid is the predominant payer for
FQHCs.
We are also proposing a few simple
adjustments to the encounter-based
payment rate. We are proposing to
adjust the encounter-based rate for
geographic differences in the cost of
inputs by applying an adaptation of the
geographic practice cost indices (GPCI)
used to adjust payment under the
Physician Fee Schedule (PFS). Also, we
are proposing to adjust the encounterbased rate when a FQHC furnishes care
to a patient that is new to the FQHC or
to a beneficiary receiving a
comprehensive initial Medicare visit
(that is, an initial preventive physical
examination (IPPE) or an initial annual
wellness visit (AWV)). We believe this
adjustment would account for the
greater intensity and resource use
associated with these types of services.
For additional information on the
design of the FQHC PPS and risk
adjustment, see section II. of this
proposed rule.
b. Addressing Payment for Multiple
Visits on the Same Day
Under the current reasonable cost
based payment methodology, FQHCs are
paid an AIR for all services furnished on
the same day to the same beneficiary,
with the following exceptions: (1) The
FQHC can bill for an additional visit on
the same day when an illness or injury
occurs subsequent to the initial visit;
and (2) the FQHC can bill for additional
visits when mental health, diabetes selfmanagement/medical nutrition therapy
(DSMT/MNT), or the IPPE are furnished
on the same day as the medical visit.
However, there are no statutory
requirements that we pay separately for
these services, and an analysis of FQHC
claims data submitted in 2011 and 2012
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indicates that less than 0.5 percent of all
billed visits were for more than 1 visit
per day for the same beneficiary.
We understand that there may be
many possible reasons why the rate of
billing for more than one visit per day
has been low, and that there are many
ways that FQHCs are providing
integrated, patient-centered health care
services. Since the option to bill for
more than one visit per day is rarely
utilized by FQHCs and continuation of
the exception to the single, all-inclusive
payment per day requires additional
complexity to the PPS, we are proposing
to eliminate these exceptions for
payment for multiple visits on the same
day and limit FQHCs to 1 encounter
payment per day. We believe this
approach is consistent with an allinclusive methodology and reasonable
cost principles, and would not
significantly impact FQHC
reimbursement. However, we are
interested in comments that address
whether there are factors that we have
not considered, particularly in regards
to mental health services, and we would
reconsider this approach if information
is presented that this may impact on
beneficiaries’ access to services or the
integration of services in underserved
communities. For additional
information on billing for multiple visits
on the same day, see section B of this
proposed rule.
c. Beneficiary Coinsurance
Under the current reasonable cost
system, beneficiary coinsurance for
FQHC services is assessed based on the
FQHC’s charge, which can result in the
coinsurance amount being higher than
what it would be if it was based on the
AIR, which is derived from costs.
Section 1833(a)(1)(Z) of the Act requires
that Medicare payment under the FQHC
PPS shall be 80 percent of the lesser of
the actual charge or the PPS rate, and
we are proposing that coinsurance
would be 20 percent of the lesser of the
actual charge or the PPS rate. While the
statute makes no specific provision to
revise the methodology for determining
coinsurance amounts under the new
PPS, we believe that this is consistent
with statutory language in sections
1866(a)(2)(A) and 1833(a)(3)(A) of the
Act and elsewhere that addresses
coinsurance amounts and Medicare cost
principles.
d. Waiving Coinsurance for Preventive
Services
Effective January 1, 2011, Medicare
waives beneficiary coinsurance for
eligible preventive services furnished by
a FQHC. Medicare requires detailed
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System (HCPCS) coding on FQHC
claims to ensure that coinsurance is not
applied to the line item charges for
these preventive services.
For FQHC claims that include a mix
of preventive and non-preventive
services, we are proposing to use
physician office payments under the
Medicare PFS to determine the
proportional amount of coinsurance that
should be waived for payments based
on the PPS encounter rate, and we
would continue to use providerreported charges to determine the
amount of coinsurance that should be
waived for payments based on the
provider’s charge. Total payment to the
FQHC, including both Medicare and
beneficiary liability, would not exceed
the provider’s charge or the PPS rate.
e. Transition Period and Annual
Adjustment
The statute requires implementation
of the FQHC PPS for FQHCs with cost
reporting periods beginning on or after
October 1, 2014. FQHCs would
transition into the PPS based on their
cost reporting periods. The claims
processing system would maintain the
current system and the PPS until all
FQHCs have transitioned to the PPS. We
are proposing to transition the PPS to a
calendar year update for all FQHCs,
beginning January 1, 2016, to be
consistent with many of the PFS files
that are updated on a calendar year
basis. The statute also requires us to
adjust the FQHC PPS by the MEI in the
first year after implementation, and
either the MEI or a FQHC market basket
in subsequent years.
f. Other FQHC/RHC Provisions
In addition to proposing to codify the
statutory requirements for the FQHC
PPS in this proposed rule, we are
proposing to allow RHCs to contract
with non-physician practitioners,
consistent with statutory requirements
that require at least one nurse
practitioner (NP) or physician assistant
(PA) be employed by the RHC. The
ability to contract with NPs, PAs,
certified nurse midwives (CNMs),
clinical psychologists (CPs), and clinical
social workers (CSWs) would provide
RHCs with additional flexibility with
respect to recruiting and retaining nonphysician practitioners.
We are also proposing edits to correct
terminology, clarify policy, delete
irrelevant code, and make other
conforming changes for existing
mandates and the new PPS.
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g. CLIA Enforcement Actions for
Proficiency Testing Referral
The ‘‘Taking Essential Steps for
Testing Act of 2012’’ (Pub. L. 112–202)
amended section 353 of the Public
Health Service Act to provide the
Secretary with discretion as to which
sanctions may be applied to cases of
intentional PT referral in lieu of the
automatic revocation of the CLIA
certificate and the subsequent ban
preventing the owner and operator from
owning or operating a CLIA certified
laboratory for 2 years. Based on this
discretion, we would amend the CLIA
regulations by adding three categories of
sanctions for PT referral based on the
severity and extent of the violation.
3. Summary of Cost and Benefits
a. For the FQHC PPS
As required by section 1834(o)(2)(B)(i)
of the Act, initial payments (Medicare
and coinsurance) under the FQHC PPS
must equal 100 percent of the estimated
amount of reasonable costs, as
determined without the application of
the current system’s UPL or
productivity standards that can reduce a
FQHC’s per visit rate. The proposed
FQHC PPS is estimated to have an
overall impact of increasing total
Medicare payments to FQHCs by
approximately 30 percent. The
annualized cost to the federal
government associated with the
proposed FQHC PPS is estimated to be
between $183 million and $186 million,
based on 5 year discounted flows using
3 percent and 7 percent factors.
b. For Other FQHC and RHC Changes
The ability to contract with NPs, PAs,
CNMs, CP, and CSWs would provide
RHCs with additional flexibility with
respect to recruiting and retaining nonphysician practitioners, which may
result in increasing access to care in
rural areas. There is no cost to the
Federal government and we are unable
to estimate a cost savings for RHCs. In
addition, we believe that there are no
costs associated with the technical and
conforming regulatory changes that
would be made in conjunction with the
establishment of the FQHC PPS.
c. CLIA Enforcement Actions for
Proficiency Testing Referral Changes
Over a 4-year span, we estimate that
an average of 6 cases per year may have
fit the terms of described in this
proposed rule to have alternative
sanctions applied. We believe that the
largest single type of cost is the expense
to the laboratory or hospital to contract
out for management of the laboratory,
and to pay laboratory director fees, due
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to the 2-year ban that prohibits the
owner and operator from owning or
operating a CLIA-certified laboratory in
accordance with revocation of the CLIA
certificate. Estimating the expense of
alternative sanctions at $150,000 per
laboratory, the annual fiscal savings of
the proposed changes for affected
laboratories would be approximately
$2.6 million ($578,400—$150,000 for 6
laboratories). We note that there are a
number of factors (known and
unknown) that could impact this
estimate. We also note that the total
savings may not be large, but the savings
to the individual laboratory or hospital
that would be affected may be
significant. However, we note that the
$2.6 million estimated savings to
laboratories may overstate or understate
the provision’s net benefits. While we
recognize that there are several potential
inaccuracies in our estimates, we lack
data to account for these considerations.
B. Overview and Background
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1. FQHC Description and General
Information
FQHCs are facilities that provide
services that are typically furnished in
an outpatient clinic setting. They are
currently paid an AIR per visit for
qualified primary and preventive health
services furnished to Medicare
beneficiaries.
The statutory requirements that
FQHCs must meet to qualify for the
Medicare benefit are in section
1861(aa)(4) of the Act. Based on these
provisions, the following three types of
organizations that are eligible to enroll
in Medicare as FQHCs:
• Health Center Program grantees:
Organizations receiving grants under
section 330 of the PHS Act (42 U.S.C.
254b).
• Health Center Program ‘‘lookalikes’’: Organizations that have been
identified by the Health Resources and
Services Administration (HRSA) as
meeting the requirements to receive a
grant under section 330 of the PHS Act,
but which do not receive section 330
grant funding.
• Outpatient health programs/
facilities operated by a tribe or tribal
organization (under the Indian SelfDetermination Act) or by an urban
Indian organization (under Title V of the
Indian Health Care Improvement Act).
Section 330 Health Centers are the
predominant type of FQHC. Originally
known as Neighborhood Health Centers,
they have evolved over the last 45 years
to become an integral component of the
Nation’s health care safety net system,
with more than 1,100 centers operating
approximately 8,900 delivery sites that
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serve more than 21 million people each
year from medically underserved
communities. They include community
health centers (section 330(e) of the PHS
Act), migrant health centers (section
330(g) of the PHS Act), health care for
the homeless (section 330(h) of the PHS
Act), and public housing primary care
(section 330(i) of the PHS Act).
FQHCs may be either not-for-profit or
public organizations. The main purpose
of the FQHC program is to enhance the
provision of primary care services in
underserved urban, rural and tribal
communities. FQHCs that are not
operated by a tribe or tribal organization
are required to be located in or treat
people from a Federally-designated
medically underserved area (MUA) or
medically underserved population
(MUP) and to comply with all the
requirements of section 330 of the PHS
Act. Some of these section 330
requirements include offering a sliding
fee scale to persons with incomes below
200 percent of the federal poverty level,
and being governed by a board of
directors of whom a majority of the
members receive their care at the FQHC.
According to HRSA’s Uniform Data
System (UDS),1 approximately 8 percent
of FQHC patients were Medicare
beneficiaries, 41 percent were Medicaid
recipients, and 36 percent were
uninsured in 2012. The remainder was
privately insured or had other public
insurance. Medicare and Medicaid
accounted for approximately 9 percent
and 47 percent of their total billing,
respectively.
Congress has authorized several
programs to assist FQHCs in increasing
access to care for underserved and
special populations. Many FQHCs
receive section 330 grant funds to offset
the costs of uncompensated care and
provide other services. All FQHCs are
eligible to participate in the 340B Drug
Pricing Program for pharmaceutical
products. FQHCs that receive section
330 grant funds also are eligible to apply
for medical malpractice coverage under
Federally Supported Health Centers
Assistance Act (FSHCAA) of 1992 (Pub.
L. 102–501) and FSHCAA of 1995 (Pub.
L. 104–73 amending section 224 of the
PHS Act) and may be eligible for
Federal loan guarantees for capital
improvements when funds for this
purpose are appropriated. Title VIII of
the American Recovery and
Reinvestment Act (Pub. L. 111–5)
appropriated $2 billion for construction,
equipment, health information
1 The UDS collects and tracks data such as patient
demographics, services provided, staffing, clinical
indicators, utilization rates, costs, and revenues
from section 330 health centers and health center
look-alikes.
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technology, and related improvements
to existing section 330 grantees and for
the establishment of new grantees sites.
The Affordable Care Act appropriated
an additional $11 billion over a 5-year
period ($1.5 billion for capital
improvements and $9.5 billion for
support and expansion of the 330 health
centers). HRSA administers the 330
grant program and other programs that
assist FQHCs in increasing access to
primary and preventive health care in
underserved communities.
2. Medicare’s FQHC Coverage and
Payment Benefit
The FQHC coverage and payment
benefit under Medicare was added
effective October 1, 1991, when section
1861(aa) of the Act was amended by
section 4161 of the Omnibus Budget
Reconciliation Act (OBRA) of 1990
(Pub. L. 101–508, enacted on November
5, 1990) and implemented in regulations
via the June 12, 1992 final rule with
comment period (57 FR 24961) and the
April 3, 1996 final rule (61 FR 14640).
Regulations pertaining to FQHCs are
found primarily in 42 CFR Part 405, and
42 CFR Part 491.
FQHC covered services and supplies
include the following:
• Physician, NP, PA, CNM, CP, and
CSW services.
• Services and supplies furnished
incident to a physician, NP, PA, CNM,
CP, or CSW services.
• FQHC covered drugs that are
furnished by, a FQHC practitioner.
• Outpatient diabetes selfmanagement training (DSMT) and
medical nutrition therapy (MNT) for
beneficiaries with diabetes or renal
disease.
• Statutorily-authorized preventive
services.
• Visiting nurse services to the
homebound in an area where CMS has
determined that there is a shortage of
home health agencies.
3. Legislation Pertaining to Medicare
and Medicaid Payments for FQHC
Services
FQHCs currently receive cost-based
reimbursement, subject to an upper
payment limit (UPL) and productivity
standards, for services furnished to
Medicare beneficiaries, and PPS
payment, based on their historical cost
data, for services furnished to Medicaid
recipients (section 1902(bb) of the Act).
The UPL for Medicare FQHC services is
adjusted annually based on the
Medicare Economic Index (MEI), as
described in 1842(i)(3) of the Act.
Authority to apply productivity
standards is found in 1833(a) and
1861(v)(1)(A) of the Act. Section 151(a)
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of the Medicare Improvements for
Patients and Providers Act (MIPPA) of
2008 (Pub. L. 110–275, enacted on July
15, 2008) increased the UPL for FQHC
by $5, effective January 1, 2010. Section
151(b) of the MIPPA required the
Government Accountability Office
(GAO) to study and report on the effects
and adequacy of the Medicare FQHC
payment structure.
Based on a GAO analysis of 2007
Medicare cost report data, about 72
percent of FQHCs had average costs per
visit that exceeded the UPL, and the
application of productivity standards
reduced Medicare payment for
approximately 7 percent of FQHCs. In
2007, application of the limits and
adjustments currently in place reduced
FQHCs’ submitted costs of services by
approximately $73 million, about 14
percent (Medicare Payments to Federal
Qualified Health Centers, GAO–10–
576R, July 30, 2010).
The Benefits Improvement and
Protection Act of 2000 (Pub. L. 106–554,
enacted December 21, 2000) created
section 1902(bb) of the Act which
established a PPS for Medicaid
reimbursement. The law allowed state
Medicaid agencies to establish their
own reimbursement methodology for
FQHCs provided that total
reimbursement would not be less than
the payment under the Medicaid PPS,
and that the FQHC agreed to the
alternative payment methodology
(APM). For beneficiaries enrolled in a
managed care organization (MCO), the
MCO pays the FQHC an agreed upon
amount, and the state Medicaid program
pays the FQHC a wraparound payment
equal to the difference, if any, between
the PPS rate and the payment from the
managed care organization.
The Affordable Care Act established a
Medicare PPS for FQHCs. Section
10501(i)(3)(A) of the Affordable Care
Act added section 1834(o) of the Act,
requiring the Medicare FQHC PPS to be
implemented starting October 1, 2014.
The new PPS for FQHCs is required to
take into account the type, intensity,
and duration of services furnished by
FQHCs and may include adjustments,
including geographic adjustments,
determined appropriate by the
Secretary. A detailed discussion of the
statutory requirements for the Medicare
FQHC PPS is discussed in section I.B.
of this proposed rule.
4. Medicare’s Current Reasonable CostBased Reimbursement Methodology
FQHCs are paid an AIR per visit for
medically-necessary professional
services that are furnished face-to-face
(one practitioner and one patient) with
a FQHC practitioner (42 CFR 405.2463).
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Services and supplies furnished
incident to a FQHC professional service
are included in the AIR and are not
billed as a separate visit. Technical
components such as x-rays, laboratory
tests, and durable medical equipment
are not part of the AIR and are billed
separately to Medicare Part B.
The AIR is calculated by dividing
total allowable costs by the total number
of visits. Allowable costs may include
practitioner compensation, overhead,
equipment, space, supplies, personnel,
and other costs incident to the delivery
of FQHC services. Cost reports are filed
in order to identify all incurred costs
applicable to furnishing covered FQHC
services. Freestanding FQHCs complete
Form CMS–222–92, ‘‘Independent Rural
Health Clinic and Freestanding
Federally Qualified Health Center Cost
Report’’. FQHCs based in a hospital
complete the Worksheet M series of
Form CMS–2552–10, ‘‘Hospital and
Hospital Care Complex Cost Report’’.
FQHCs based in a skilled nursing
facility (SNF) complete the Worksheet I
series of Form CMS–2540–10, ‘‘Skilled
Nursing Facility and Skilled Nursing
Facility Health Care Complex Cost
Report’’. FQHCs based in a home health
agency complete the Worksheet RF
series of Form CMS–1728–94, ‘‘Home
Health Agency Cost Report’’.
Information on these cost report forms
is found in Chapters 29, 40, 41 and 32,
respectively, of the ‘‘Provider
Reimbursement Manual—Part 2’’
(Publication 15–2). Per 42 CFR
413.65(n), only FQHCs that were
operating as provider-based clinics prior
to 1995 and either received funds under
section 330 of the PHS Act or were
determined by CMS to meet the criteria
to be a look-alike clinic are eligible to
be certified as provider-based FQHCs.
FQHCs that do not already have
provider-based status are no longer
permitted to receive the designation.
At the beginning of a FQHC’s fiscal
year, the Medicare Administrative
Contractor (MAC) calculates an interim
AIR based on actual costs and visits
from the previous cost reporting period.
For new FQHCs, the interim AIR is
estimated based on a percentage of the
per-visit limit. FQHCs receive payments
throughout the year based on their
interim rate. After the conclusion of the
fiscal year, the cost report is reconciled
and any necessary adjustments in
payments are made.
Allowable costs are subject to tests of
reasonableness, productivity standards,
and an overall payment limit (42 CFR
405.2464, 405.2466, and 405.2468). The
productivity standards require 4,200
visits per full-time equivalent physician
and 2,100 visits per full-time equivalent
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non-physician practitioner (NP, PA or
CNM) on an annual basis. If the FQHC
has furnished fewer visits than required
by the productivity standards, the
allowable costs would be divided by the
productivity standards numbers instead
of the actual number of visits.
The payment limit varies based on
whether the FQHC is located in an
urban or rural area (as defined in section
1886(d)(2)(D) of the Act). The 2013
payment limits per visit for urban and
rural FQHCs are $128.00 and $110.78,
respectively. FQHCs with multiple sites
may elect to file a consolidated cost
report (CMS Pub. 100–04, Medicare
Claims Processing Manual, chapter 9,
§ 30.8), and if the FQHC has both urban
and rural sites, the MAC applies a
weighted UPL based on the percentage
of urban and rural visits as the
percentage of total site visits. The AIR
is equal to the FQHC’s cost per visit
(adjusted by the productivity standard if
appropriate) or the payment limit,
whichever is less.
Medicare beneficiaries receiving
services at a FQHC are not subject to the
annual Medicare deductible for FQHCcovered services (section 1833(b) of the
Act). Medicare beneficiaries pay a
copayment based on 20 percent of the
charges (section 1866(a)(2)(A)(ii) of the
Act), except for: (1) Mental health
treatment services, which are subject to
the outpatient mental health treatment
limitation until January 1, 2014, when
beneficiary coinsurance is reduced to
the same level as most other Part B
services; (2) FQHC-supplied influenza
and pneumococcal and Hepatitis B
vaccines (HBV); and (3) effective
January 1, 2011, personalized
prevention plan services and any
Medicare covered preventive service
that is recommended with a grade of A
or B by the U.S. Preventive Services
Task Force (USPSTF).
The administration and payment of
influenza and pneumococcal vaccines is
not included in the AIR. They are paid
at 100 percent of reasonable costs
through the cost report. The cost and
administration of Hepatitis B vaccine
(HBV) is covered under the FQHC’s AIR.
5. Summary of Requirements Under the
Affordable Care Act for the FQHC PPS
and Other Provisions Pertaining to
FQHCs
Section 10501(i)(3)(A) of the
Affordable Care Act amended section
1834 of the Act by adding a new
subsection (o), ‘‘Development and
Implementation of Prospective Payment
System’’. Section 1834(o)(1)(A) of the
Act requires that the system include a
process for appropriately describing the
services furnished by FQHCs. Also, the
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system must establish payment rates
based on such descriptions of services,
taking into account the type, intensity,
and duration of services furnished by
FQHCs. The system may include
adjustments (such as geographic
adjustments) as determined appropriate
by the Secretary of HHS.
Section 1834(o)(1)(B) of the Act
specifies that, by no later than January
1, 2011, FQHCs must begin submitting
information as required by the
Secretary, including the reporting of
services using HCPCS codes, in order to
develop and implement the PPS.
Section 1834(o)(2)(A) of the Act
requires that the FQHC PPS must be
effective for cost reporting periods
beginning on or after October 1, 2014.
For such cost reporting periods,
reasonable costs will no longer be the
basis for Medicare payment for services
furnished to beneficiaries at FQHCs.
Section 1834(o)(2)(B)(i) of the Act
requires that the initial PPS rates must
be set so as to equal in the aggregate 100
percent of the estimated amount of
reasonable costs that would have
occurred for the year if the PPS had not
been implemented. This 100 percent
must be calculated prior to application
of copayments, per visit limits, or
productivity adjustments.
Section 1834(o)(2)(B)(ii) of the Act
describes the methods for determining
payments in subsequent years. After the
first year of implementation, the PPS
payment rates must be increased by the
percentage increase in the MEI. After
the second year of implementation, PPS
rates shall be increased by the
percentage increase in a market basket
of FQHC goods and services as
established through regulations, or, if
not available, the MEI that is published
in the Physician Fee Schedule (PFS)
final rule.
Section 10501(i)(3)(B) of the
Affordable Care Act added section
1833(a)(1)(Z) to the Act to specify that
Medicare payment for FQHC services
under section 1834(o) of the Act shall be
80 percent of the lesser of the actual
charge or the PPS amount determined
under section 1834(o).
Section 10501(i)(3)(C) of the
Affordable Care Act added section
1833(a)(3)(B)(i)(II) of the Act to require
that FQHCs that contract with Medicare
Advantage (MA) organizations be paid
at least the same amount they would
have received for the same service
under the FQHC PPS.
Section 10501(i)(2) of the Affordable
Care Act amended the definition of
FQHC services as defined in section
1861(aa)(3)(A) of the Act by replacing
the specific references to services
provided under section 1861(qq) and
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(vv) of the Act (DSMT and MNT
services, respectively) with preventive
services as defined in section
1861(ddd)(3) of the Act, as established
by section 4014(a)(3) of the Affordable
Care Act. These changes were effective
for services provided on or after January
1, 2011. Accordingly, in the CY 2011
Medicare PFS final rule (75 FR 73417
through 73419, November 29, 2010) we
adopted conforming regulations by
adding a new § 405.2449, which added
the new preventive services definition
to the definition of FQHC services
effective for services provided on or
after January 1, 2011 (see that rule for
a detailed discussion regarding
preventive services covered under the
FQHC benefit and the requirements for
waiving coinsurance for such services).
Section 1833(b)(4) of the Act
stipulates that the Medicare Part B
deductible shall not apply to FQHC
services. The Affordable Care Act made
no change to this provision; therefore
Medicare will continue to waive the
Part B deductible for all FQHC services
in the FQHC PPS, including preventive
services added by the Affordable Care
Act.
6. Approach to the FQHC PPS
To enhance our understanding of the
services furnished by FQHCs and the
unique role of FQHCs in providing
services to people from medically
underserved areas and populations, we
worked closely with HRSA in the
development of this proposed rule.
They provided valuable expertise on the
challenges facing FQHCs in increasing
access to health care for underserved
populations and the importance of
Medicare reimbursement to the overall
financial viability of the health centers.
In addition to providing patient
population and services data from their
UDS, HRSA also enabled us to gain
additional data on insurance coverage
among a subset of FQHC patients from
the Community Health Applied
Research Network. We believe that the
proposals in this proposed rule
benefited greatly from their assistance.
Our goal for the FQHC PPS is to create
a system in accordance with the statute
whereby FQHCs are fairly reimbursed
for the services they provide to
Medicare patients in the least
burdensome manner possible, so that
they may continue to provide primary
and preventive health services to the
communities they serve. We will
continue to evaluate our approach based
on the comments we receive to this
proposed rule in the context of
balancing payment requirements,
regulatory burden, and the need for
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58391
appropriate accountability and
oversight.
II. Establishment of the Federally
Qualified Health Center Prospective
Payment System (FQHC PPS)
A. Design and Data Sources for the
FQHC PPS
1. Overview of the PPS Design
In developing the new PPS for
FQHCs, we considered the statutory
requirements at 1834(o)(1)(A) of the Act
requiring that the new PPS take into
account the type, intensity, and
duration of services furnished by
FQHCs, and allows for adjustments,
including geographic adjustments, as
determined appropriate by the
Secretary. We explored several
approaches to the methodology and
modeled options for calculating
payment rates and adjustments under a
PPS based on data from Medicare FQHC
cost reports and Medicare FQHC claims.
Each option was evaluated to determine
which approach would result in the
most appropriate payment structure
with the least amount of reporting
requirements and administrative burden
for the FQHCs.
One approach we considered would
align payment for FQHCs with payment
for services typically furnished in
physician offices, making separate
payment for each coded service and
adopting the relative values from the
PFS. While this approach follows
established payment policy for services
furnished in an outpatient clinic setting,
it unbundles a FQHC encounter-based
payment into a fee schedule structure,
which could encourage excess
utilization in the long-term, and would
increase coding and billing
requirements for FQHCs.
Another approach for the PPS would
be to pay a single encounter-based rate
per beneficiary per day. The encounterbased rate would be based on an average
cost per visit, which would be
calculated by aggregating the data for all
FQHCs and dividing their total costs by
their total visits incurred during a
specified time period. An encounterbased payment rate is consistent with
the agency’s commitment to greater
bundling of services, which gives
FQHCs the flexibility to implement
efficiencies to reduce over-utilization of
services. FQHCs are accustomed to
billing for a single visit, as they are
currently paid through an AIR that is
based on a FQHC’s own average cost per
visit. An encounter-based payment is
also similar to Medicaid payment
systems, and Medicaid constitutes a
large portion of FQHC billing
(approximately 47 percent, compared to
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approximately 9 percent for Medicare).
We believe an encounter-based payment
rate for the FQHC PPS would provide
appropriate payment while remaining
administratively simple. Therefore, we
propose an encounter-based rate per
beneficiary per day as the basis for
payment under the proposed FQHC
PPS. Additional details regarding the
encounter-based rate setting
methodology, including adjustments to
the encounter-based rate, are discussed
in section II. C. of this proposed rule.
2. Medicare FQHC Cost Reports
As required by section 1834(o)(2)(B)(i)
of the Act, initial payments (Medicare
and coinsurance) under the FQHC PPS
must equal 100 percent of the estimated
amount of reasonable costs, as
determined without the application of
the current system’s UPLs or
productivity standards that can reduce a
FQHC’s per visit rate. In order to
estimate 100 percent of reasonable costs,
we obtained Medicare cost report data
for free-standing FQHCs (Form CMS
222–92) from the March 31, 2013,
Healthcare Cost Report Information
System (HCRIS) quarterly update. We
included in our analysis FQHC costs
reports that had allowable costs
(excluding pneumococcal and influenza
vaccines) and Medicare visits, and we
used one cost report for each FQHC cost
reporting entity. For 69 percent of cost
reporting entities, the only available
cost report covered 1 full year (with cost
reporting periods ending between June
30, 2011 and June 30, 2012). For the
remaining 31 percent of cost reporting
entities, there were multiple cost reports
available or the cost reporting period
was not exactly 1 year. For cost
reporting entities with multiple cost
reports available, we selected the most
recent cost report, unless an earlier cost
report provided us with a better match
to the FQHC claims data that was used
to model potential adjustments. Because
FQHCs with multiple sites can file
consolidated cost reports, we also
ensured that we selected only one cost
report for each delivery site.
As required by statute, we estimated
100 percent of reasonable costs that
would have occurred for this period
prior to the application of copayments,
per visit limits, or productivity
adjustments (see discussion of the
baseline for the PPS in section II. D. of
this proposed rule). We also note that,
under section 1833(c) of the Act,
outpatient mental health services will
be paid on the same basis as other Part
B services as of January 1, 2014. As the
FQHC PPS is to be implemented for cost
reporting periods beginning on or after
October 1, 2014, we adjusted the cost
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report data to remove the application of
the outpatient mental health limitations
that were in effect when these reported
services were incurred.
After eliminating the current payment
limits and adjustments, we calculated
the average cost per visit for each cost
reporting entity by dividing the total
estimated Medicare costs (excluding
vaccines) reported by the total number
of Medicare visits reported. We found
that the mean cost per visit for all cost
reporting entities was about 11 percent
higher than the median cost per visit.
In developing the FQHC PPS, section
1834(o)(1)(A) of the Act allows for
adjustments determined appropriate by
the Secretary. Consistent with this
authority, we excluded statistical
outliers from the sample. We identified
all cost reporting entities with an
average cost per visit that was greater
than three standard deviations above or
below the geometric mean of the overall
average cost per visit among cost
reporting entities, and we excluded
their data from our sample. In the
aggregate, after trimming the data for
outliers and before adjustments for price
inflation, we estimate that eliminating
current payment limits and adjustments
would increase payments to FQHCs by
about 28 percent. For additional
information on the impact of the FQHC
PPS, see section VII. of this proposed
rule.
3. Medicare FQHC Claims
In developing the Medicare FQHC
PPS, section 1834(o)(1)(A) of the Act
requires us to take into account the type,
intensity, and duration of FQHC
services, and allows other adjustments,
such as geographic adjustments. Section
1834(o)(1)(B) of the Act also granted the
Secretary of HHS (the Secretary) the
authority to require FQHCs to submit
such information as may be required in
order to develop and implement the
Medicare FQHC PPS, including the
reporting of services using HCPCS
codes. The provision requires that the
Secretary impose this data collection
submission requirement no later than
January 1, 2011.
Beginning with dates of service on or
after January 1, 2011, when billing
Medicare, FQHCs are required to report
all pertinent services provided and list
the appropriate HCPCS code for each
line item along with revenue code(s) for
each FQHC visit. The additional line
item(s) and HCPCS code reporting were
for informational and data gathering
purposes to inform development of the
PPS rates and potential adjustments.
Other than for calculating the amount of
coinsurance to waive for preventive
services for which the coinsurance is
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waived, these HCPCS codes are not
utilized to determine current Medicare
payment to FQHCs. We propose to use
the HCPCS codes in the FQHC claims
data to support the development of the
FQHC PPS rate and adjustments and for
making payment under the PPS.
In order to model potential
adjustments, we obtained final action
Medicare FQHC claims (type of bill 73X
and 77X) from the CMS Integrated Data
Repository (IDR) with dates of service
between January 2010 and December
2012. We excluded claims that did not
list a revenue code or HCPCS code that
represented a face-to-face encounter, as
these services would not qualify for an
AIR payment. We also excluded claim
lines with revenue codes that did not
correspond to FQHC services or that
lacked valid HCPCS codes.
In 2011, approximately 90 percent of
FQHC claims listed a single HCPCS
code that defined the overall type of
encounter (for example, a mid-level
office visit (HCPCS code 99213)). We
found similar reporting trends in 2012
FQHC claims. We sought to validate the
completeness of HCPCS reporting by
analyzing coding on primary care
physician claims for PFS data. When
compared, the findings from the
simulated PFS data and actual FQHC
data were similar in the type and
distribution of the reported encounter
code (that is, the HCPCS code that
represents the visit that qualifies the
FQHC encounter for an AIR payment).
When ancillary services (services that
are not separately billable in a FQHC)
were billed with an office visit code,
both FQHC and analogous primary care
physician office claims demonstrated a
tendency to include only one to two
ancillary services in addition to the
encounter code about 35 percent of the
time, and FQHCs billed only a single
ancillary service about 10 percent of the
time.
We believe that the reporting trends
in the FQHC claims are consistent with
the coding of analogous primary care
physician office claims, thereby
suggesting that the limited number of
ancillary services listed on FQHC claims
appropriately describe the services
furnished during an encounter.
4. Linking Cost Reports and Claims To
Compute the Average Cost per Visit
In order to compute the adjusted
charges or ‘‘estimated cost’’ for
determining the average cost per visit,
we linked claims to cost reports by
delivery site, as determined by the CMS
Certification Number (CCN) reported on
the claim. Since the HCPCS code
reporting requirement on claims did not
go into effect until January 1, 2011,
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claims for earlier dates of service did
not include the detail required to model
adjustments based on type, intensity, or
duration of services. Cost reports with
reporting periods that began on or after
January 1, 2011, accounted for 81
percent of the sample, and we linked
these cost reports to Medicare FQHC
claims with service dates that matched
their respective cost reporting periods.
For cost reports that were at least 1 full
year in length and with a cost reporting
period that began in 2010, we linked
these cost reports to 2011 Medicare
FQHC claims.
The linked cost report and claims data
were then used to calculate a cost-tocharge ratio (CCR) for each costreporting entity. To approximate data
not available on the cost report, we
developed these CCRs to convert each
FQHC’s charge data, as found on its
claims, to costs. We calculated an
average cost per visit by dividing the
total allowable costs (excluding
pneumococcal and influenza
vaccinations) by the total number of
visits reported on the cost report. We
calculated an average charge per visit by
dividing the total charges of all visits for
all sites under a cost-reporting entity
and dividing that sum by the total
number of visits for that cost-reporting
entity. We calculated a cost-reporting
entity-specific CCR by dividing the
average cost per visit (based on cost
report data) by the average charge per
visit (based on claims data). We
multiplied the submitted charges for
each claim by these cost-reporting
entity-specific CCRs to estimate FQHC
costs per visit. We note that other
Medicare payment systems calculate
CCRs based on total costs and total
charges reported on Medicare cost
reports. However, this information is
not currently available on the freestanding FQHC cost report, Form CMS–
222–92.
We found that the mean estimated
cost per visit in the linked claims data
was about 9 percent higher than the
median estimated cost per visit. In
developing the FQHC PPS, section
1834(o)(1)(A) of the Act allows for
adjustments determined appropriate by
the Secretary. Consistent with this
authority, we excluded statistical
outliers from the linked claims sample.
We identified visits with estimated costs
that were greater than three standard
deviations above or below the geometric
mean of the overall average estimated
cost per visit, and we excluded those
visits from our sample.
After trimming the linked claims data
for outliers, the final data set included
5,245,961 visits from 5,236,607 distinct
claims encompassing 6,135,830 claim
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that was not present at the visit earlier
that day, such as an injury or
unexpected onset of illness. In these
situations, the FQHC has been permitted
to be paid separately for two visits on
B. Policy Considerations for Developing
the same day for the same beneficiary.
the FQHC PPS Rates and Adjustments
In response to a comment to the June
In developing the FQHC PPS rates
12, 1992 final rule with comment period
and adjustments, we considered existing (57 FR 24961), in the April 3, 1996 final
payment policies to determine potential rule (61 FR 14640), we revised the
interactions with the implementation of regulations to allow separate payment
the FQHC PPS. We discuss these
for mental health services furnished on
policies and our proposed changes
the same day as a medical visit. The CY
below.
2007 PFS final rule (71 FR 69665)
subsequently revised the regulations to
1. Multiple Visits on the Same Day
allow FQHCs to receive separate
The current all-inclusive payment
payment for DSMT and MNT. The
system was designed to reimburse
ability to bill separately for Medicare’s
FQHCs for services furnished to
IPPE is in manuals only and not in
Medicare beneficiaries at a rate that
regulation, with the manual language
would take into account all costs
noting this is a once in a lifetime
associated with the provision of services benefit. There are no statutory
(for example, space, supplies,
requirements to pay FQHCs separately
practitioners, etc.) and reflect the
for these services when they occur on
aggregate costs of providing services
the same day as another billable visit.
over a period of time. In some cases, the
In developing the new PPS for
per visit rate for a specific service is
FQHCs, we reviewed all existing
higher than what would be paid based
policies for FQHC payments to
on the PFS, and in some cases it is lower determine if the policies should remain
than what would be paid based on the
the same as under the current system, or
PFS, but at the end of the reporting year if the policies should be updated or in
when the cost report is settled, the
some cases revised. As part of this
Medicare payment is typically higher
process, we reviewed the existing
for FQHCs than if the services were
regulations and policies that allow
billed separately on the PFS.
separate payment for subsequent illness
The current payment system was also or injury, mental health services,
designed to minimize reporting
DSMT/MNT, or IPPE when they occur
requirements, and as such, the allon the same day as an otherwise billable
inclusive payment reflects all the
visit. To do this, we examined 2011
services that a FQHC provides in a
Medicare FQHC claims data in order to
single day to an individual beneficiary,
determine the frequency of FQHCs
regardless of the length or complexity of billing for more than one visit per day
the visit or the number or type of
for a beneficiary. We then analyzed the
practitioners seen. This would include
potential financial impact on FQHCs
situations where a FQHC patient has a
and the potential impact on access to
medically-necessary face-to-face visit
care if billing for more than 1 visit per
with a FQHC practitioner, and is then
day for these specific situations was no
seen by another FQHC practitioner,
longer permitted. We also considered
including a specialist, for further
several alternative options, such as an
evaluation of the same condition on the adjustment of the per visit rate when
same day, or is then seen by another
multiple visits occur in the same day, or
FQHC practitioner (including a
the establishment of a separate per visit
specialist) for evaluation of a different
rate for subsequent visit due to illness
condition on the same day. Except for
or injury, mental health services,
certain preventive services that have
DSMT/MNT, or IPPE.
An analysis of data from Medicare
coinsurance requirements waived,
FQHC claims with dates of service
FQHCs have not been required to
between January 1, 2011 and June 30,
submit coding of each service in order
2012, indicate that it is uncommon for
to determine Medicare payment.
FQHCs to bill more than one visit per
Although the all-inclusive payment
day for the same beneficiary (less than
system was designed to provide
0.5 percent of all visits), even though
enhanced reimbursement that reflects
the ability to do so has been in place
the costs associated with a visit in a
single day by a Medicare beneficiary, an since 1992 for subsequent illness/injury,
exception to the one encounter payment since 1996 for mental health services,
and since 2007 for DSMT/MNT. Even
per day policy was made for situations
when a patient comes into the FQHC for allowing for any underreporting in the
data, it is clear that billing multiple
a medically-necessary visit, and after
visits on the same day for an individual
leaving the FQHC, has a medical issue
lines. This included 5,223,512 daily
visits furnished to 1,244,873
beneficiaries that visited 3,509 delivery
sites under 1,141 cost-reporting entities.
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is a rare event, and eliminating the
ability to do so would not significantly
impact either the FQHC payment or a
beneficiary’s access to care. Eliminating
this ability to bill for multiple visits on
the same day would also simplify
billing by removing the need for
modifier 59, which signifies that the
conditions being treated are totally
unrelated and services are provided at
separate times of the day, and the
subsequent claims review that occurs
when modifier 59 appears on a claim.
Because the data show that multiple
visits are infrequently occurring on the
same day, we determined that the level
of effort required to develop an
adjustment or a separate rate for each of
these services when furnished on the
same day as a medical visit would not
be justified. Therefore, we are proposing
to revise § 405.2463(b) to remove the
exception to the single encounter
payment per day for FQHCs paid under
the proposed PPS. This policy is
consistent with an all-inclusive
methodology and reasonable cost
principles and would simplify billing
and payment procedures. Thus, the
proposed PPS encounter rate will also
reflect a daily (per diem) rate and result
in a slightly higher payment than one
calculated based on multiple encounters
on the same day.
Based on the Medicare claims data
provided by FQHCs that indicates a very
low occurrence of multiple visits billed
on the same day, we believe this
proposal would not significantly impact
total payment or access to care.
However, we understand that there may
be many possible reasons why the rate
of billing for more than one visit per day
has been low (for example. difficulty in
scheduling more than one type of visit
on the same day) and that FQHCs can
provide integrated, patient-centered
health care services in a variety of ways.
Therefore, we are interested in
comments that address whether there
are factors that we have not considered,
particularly in regards to the provision
of mental health services. We invite
public comment on whether this change
would impact access to these services or
the integration of services in
underserved communities. The benefits
of retaining the ability to bill for more
than one visit on the same day should
be considered along with the proposed
increased per diem payment rate under
the PPS and the complexity of
developing a claims processing system
to allow for this exception in the new
PPS.
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2. Preventive Laboratory Services and
Technical Components of Other
Preventive Services
The core services of the FQHC benefit
are generally billed under the
professional component. The benefit
categories for laboratory services and
diagnostic tests generally are not within
the scope of the FQHC benefit, as
defined under section 1861(aa) of the
Act. For services that can be split into
professional and technical components,
we have instructed FQHCs to bill the
professional component as part of the
AIR, and separately bill the Part B MAC
under different identification for the
technical portion of the service on a Part
B practitioner claim (for example, Form
CMS–1500). If the FQHC operates a
laboratory, is enrolled under Medicare
Part B as a supplier, and meets all
applicable Medicare requirements
related to billing for laboratory services,
it may be able to bill as a supplier
furnishing laboratory services under
Medicare Part B. When FQHCs
separately bill these services, they are
instructed to adjust their cost reports
and carve out the cost of associated
space, equipment, supplies, facility
overhead, and personnel for these
services.
As part of the implementation of the
FQHC benefit, we used our regulatory
authority to enumerate preventive
primary services, as defined in 42 CFR
405.2448, which may be paid for when
provided by FQHCs (57 FR 24980, June
12, 1992, as amended by 61 FR 14657,
April 3, 1996). These preventive
primary services include a number of
laboratory tests, such as cholesterol
screening, stool testing for occult blood,
dipstick urinalysis, tuberculosis testing
for high risk patients, and thyroid
function tests. The preventive services
added to the FQHC benefit pursuant to
the Affordable Care Act, as defined by
section 1861(ddd)(3) of the Act and
codified in 42 CFR 405.2449, include
laboratory test and diagnostic services,
such as screening mammography,
diabetes screening tests, and
cardiovascular screening blood tests.
Professional services or professional
components of primary preventive
services (as defined in § 405.2448) and
preventive services (as defined in
§ 405.2449) are billed as part of the AIR.
The preventive laboratory tests and
technical components of other
preventive tests are not paid under the
AIR and FQHCs are instructed to bill
separately for these services. We are not
proposing a change in billing
procedures, and we do not intend to
include payment for these services
under the FQHC PPS. We note this
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payment structure simplifies billing
procedures as laboratory tests and
technical components of diagnostic
services are always billed separately to
Part B and are never included as part of
the FQHC’s encounter rate. (Note that
both the professional and technical
components of FQHC primary
preventive services and preventive
services remain covered under Part B).
An analysis of FQHC claims indicates
that FQHCs are listing some preventive
laboratory tests and diagnostic services
on their claims. In 2011 through 2012,
less than 5 percent of Medicare FQHC
claims listed HCPCS codes related to
laboratory tests or diagnostic services.
For purposes of modeling adjustments
to the FQHC PPS rate, we considered
excluding these line items from the
encounter charge and proportionately
reducing the cost-reporting entity’s
related cost report data. However, it was
not always clear whether the line item
charges for these laboratory tests or
diagnostic services were included in the
total charge for the claim or were listed
for informational purposes only. As
such, we chose not to adjust the claims
or cost report data based on the
presence of the related HCPCS codes on
the claims. As part of the
implementation of the FQHC PPS, we
plan to clarify the appropriate billing
procedures through program
instruction.
3. Vaccine Costs
Section 1834(o)(2)(B)(i) of the Act
requires that the initial PPS rates must
be set so as to equal in the aggregate 100
percent of the estimated amount of
reasonable costs that would have
occurred for the year if the PPS had not
been implemented. This 100 percent
must be calculated prior to application
of copayments, per visit limits, or
productivity adjustments. We believe
that this language directed us to develop
a PPS to pay for items currently affected
by the UPL and the productivity screen,
which would pay for items currently
included in the calculation of
reasonable costs and paid under the
AIR.
The administration and payment of
influenza and pneumococcal vaccines is
not included in the AIR. They are paid
at 100 percent of reasonable costs
through the cost report. The cost and
administration of HBV is covered under
the FQHC’s AIR when furnished as part
of an otherwise qualifying encounter.
We are not proposing any changes to
this payment structure. We would
continue to pay for the costs of the
influenza and pneumococcal vaccines
and their administration through the
cost report, and other Medicare-covered
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vaccines as part of the encounter rate.
The costs of hepatitis B vaccine and its
administration were included in the
calculation of reasonable costs used to
develop the FQHC PPS rates, and we
would pay for these services under the
FQHC PPS when furnished as part of an
otherwise qualifying encounter.
C. Risk Adjustments
Section 1834(o)(1)(A) of the Act
provides that the FQHC PPS may
include adjustments, including
geographic adjustments, that are
determined appropriate by the
Secretary. We discuss our proposed
adjustments below.
2. Geographic Adjustment Factor
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1. Alternative Calculations for Average
Cost per Visit
As discussed in section II. of this
proposed rule, we used the claims data
to calculate an average cost per visit by
dividing the total estimated costs
($788,547,531) by the total number of
daily visits (5,223,512).
Average cost per daily visit =
$788,547,531/5,223,512 = $150.96
We also examined how the average
cost per visit would differ under current
policy, which allows separate payment
for subsequent illness or injury, mental
health services, DSMT/MNT or IPPE
when they occur on the same day as an
otherwise billable visit. While the total
estimated cost was the same
($788,547,531), the total number of
visits in the denominator (5,245,961)
did not combine multiple visits on the
same day of service into 1 daily visit.
Average cost per visit = $788,547,531/
5,245,961 = $150.32
We also derived an average cost per
visit from the cost reports by dividing
the total estimated Medicare costs
(excluding vaccines) reported
($832,387,663) by the total number of
Medicare visits reported (5,374,217).
Unlike the previous calculations based
on claims data, the variables derived
from the cost reports summarize total
costs and visits by cost reporting entity
and could not be trimmed of individual
visits with outlier values. Also, we note
that the total number of Medicare visits
reported on the cost reports reflects
current policy which allows for
multiple visits on the same day of
service, and we could not calculate an
average cost per daily visit using only
cost report data.
Average cost per visit from cost report
data = $832,387,663/5,374,217 =
$154.89
Consistent with our proposal to
remove the exception to the single
encounter payment per day, we propose
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to use the average cost per daily visit of
$150.96, as calculated based on adjusted
claims data as the PPS rate prior to any
risk adjustment. We note that the
alternative calculations yield an average
cost per visit that differs from $150.96
by less than 3 percent. We also note that
these calculations were derived based
on the cost report and claims data
available during our development of
this proposed rule and are subject to
change in the final rule based on more
current data.
We propose to adjust the FQHC PPS
rate for geographic differences. This
adjustment will be made to the cost of
inputs by applying an adaptation of the
GPCIs used to adjust payment under the
PFS. Established in 1848(e) of the Act,
GPCIs adjust payments for geographic
variation in the costs of providing
services and consist of three component
GPCIs: the physician work GPCI, the
practice expense GPCI, and the
malpractice insurance GPCI.
Because FQHCs furnish services that
are analogous to those furnished by
physicians in outpatient clinic settings,
we believe it would be consistent to
apply geographic adjustments similar to
those applied to services furnished
under the PFS. We calculated a
geographic adjustment factor (GAF) for
each encounter based on the delivery
site’s locality using the proposed CY
2014 work and practice expense GPCIs
and the proposed cost share weights for
the CY 2014 GPCI update, as published
in the CY 2014 PFS proposed rule (July
19, 2013 (78 FR 43282)).
For modeling geographic adjustments
for this FQHC PPS proposed rule, we
did not use the proposed CY 2015 work
and practice expense GPCIs that also
were published in the CY 2014 PFS
proposed rule. We note that the FQHC
PPS GAFs are subject to change in the
final FQHC PPS rule based on more
current data, including the finalized
PFS GPCI and cost share weight values.
We excluded the PFS malpractice
GPCI from the calculation of the GAF as
FQHCs that receive section 330 grant
funds are eligible to apply for medical
malpractice coverage under FSHCAA of
1992 and FSHCAA of 1995. Without the
cost share weight for the malpractice
GPCI, the sum of the proposed PFS
work and PE cost share weights
(0.50866 and 0.44839, respectively) is
less than one. In calculating the FQHC
GAFs, prior to applying the proposed
work and PE cost share weights to the
GPCIs, we scaled these proposed cost
share weights so they would total 100
percent while still retaining weights
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58395
relative to each other (0.53149 and
0.46851, respectively).
We calculated each locality’s GAF as
follows:
Geographic adjustment factor =
(0.53149 × Work GPCI) + (0.46851 ×
PE GPCI)
We included the GAF adjustment
when modeling all other potential
adjustments. The GAF will be applied
based on where the services are
furnished and may vary among FQHCs
that are part of the same organization.
The list of proposed GAFs by locality is
in Addendum A of this proposed rule
and is also available as a downloadable
file at https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
FQHCPPS/.
3. New Patient or Initial Medicare Visit
Based on an analysis of claims data,
we found that the estimated cost per
encounter was approximately 33
percent higher when a FQHC furnished
care to a patient that was new to the
FQHC or to a beneficiary receiving a
comprehensive initial Medicare visit
(that is, an IPPE or an initial AWV). We
propose to adjust the encounter rate to
reflect the 33 percent increase in costs
when FQHCs furnish care to new
patients or when they furnish a
comprehensive initial Medicare visit,
which could account for the greater
intensity and resource use associated
with these types of services. Our
proposed risk adjustment factor is
1.3333 (as discussed further in section
V. of this proposed rule).
4. Other Adjustment Factors Considered
We considered multiple other
adjustments such as demographics (age
and sex), clinical conditions, duration of
the encounter, etc. However, we found
many of these other adjustments to have
limited impact on costs or to be too
complex and largely unnecessary for the
FQHC PPS.
We modeled whether there were
differences in resource use for mental
health visits and preventive care visits
when compared to medical care visits.
We found that mental health encounters
had approximately 1 percent lower
estimated costs per visit relative to
medical care visits, and we did not
consider this a sufficient basis for
proposing a payment adjustment. We
found that preventive care encounters
had approximately 18 percent higher
estimated costs per visit. This difference
in resource use declines to an 8 percent
higher estimated cost per visit after
adjusting for the GAF and the proposed
1.3333 risk adjustment factor for a
patient that is new to the FQHC or for
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a beneficiary receiving a comprehensive
initial Medicare visit (that is, an IPPE or
an initial AWV), indicating that a
significant amount of preventive care
visits were IPPEs or initial AWVs. We
are not proposing a payment reduction
for preventive care encounters and we
note that a significant amount of the
more costly preventive care encounters
would otherwise be recognized and paid
for with the proposed 1.3333 risk
adjustment factor for a beneficiary
receiving a comprehensive initial
Medicare visit. We note that an 8
percent adjustment would increase
payment for preventive visits, and we
welcome comments on whether an
adjustment for preventive care
encounters would be appropriate,
noting that there would be redistributive
effect which would result in a decrease
in the payment rate for other visits.
We considered patient age and sex as
potential adjustment factors as these
demographic characteristics have the
advantage of being objectively defined.
However, both of these characteristics
had a limited association with estimated
costs, which did not support the use of
these demographic characteristics as
potential adjustment factors.
We tested for an association between
commonly reported clinical conditions
and the estimated cost per visit. A
number of clinical conditions were
found to be associated with
approximately 5 to 10 percent higher
costs per visit, but we are concerned
that claims might not include all
potentially relevant secondary
diagnoses. In addition, we would need
to consider how to minimize the
complexity of such an adjustment with
a limited number of clinically
meaningful groupings.
We considered the duration of
encounters (in minutes) as a potential
adjustment factor. Many of the
evaluation and management (E/M)
codes commonly seen on FQHC claims
are associated with average or typical
times, and there was a strong
association between these associated
times and the estimated cost per
encounter. However, these minutes are
guidelines that reflect the face-to-face
time between the FQHC practitioner and
the beneficiary for that E/M service, and
they would not indicate the total
duration of the FQHC encounter.
Moreover, many of the codes used to
describe the face-to-face visit that
qualifies an encounter, such as a
subsequent annual wellness visit, are
not associated with average or typical
times.
We considered adjusting payment
based on the types of services furnished
during a FQHC encounter. Our analysis
of FQHC claims data indicates that
information regarding ancillary services
provided by FQHCs appears to be
limited. As a result, there is a risk that
adjustments for the types of services
being provided would be based on
incomplete information and result in
payments under the PPS that do not
accurately reflect the cost of providing
those services.
5. Report on PPS Design and Models
We contracted with Arbor Research
for Collaborative Health to assist us in
designing a PPS for FQHCs. Arbor
Research modeled options for
calculating payment rates and
adjustments under a PPS based on data
from Medicare FQHC cost reports and
Medicare FQHC claims. A report
detailing the options modeled in the
development of the PPS will be
available at https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/FQHCPPS/.
D. Base Rate Calculation
We calculated a base rate for the
FQHC PPS by adjusting the average cost
per visit to account for the proposed
adjustment factors. We calculated an
average payment multiplier using the
average GAF (0.9944) multiplied by the
average risk adjustment for non-new
patient/initial visits (1.0), as weighted
by the percent of encounters that
represented non new patient/initial
visits (0.9722), and we added this to the
average GAF (0.9944) multiplied by the
average risk adjustment for new patient/
initial visits (1.3333), as weighted by the
percent of encounters that represented
new patient/initial visits (0.0278):
Average payment multiplier =
0.9721(1.00)(0.9944) +
0.0279(1.3333)(0.9944) = 1.0036
We calculated a base rate amount by
multiplying the reciprocal of the average
payment multiplier by the average cost
per visit. Using the average cost per
daily visit:
Base rate per daily visit = $150.96 ×
(1/1.0036) = $150.42
The base rate per daily visit of
$150.42 reflects costs through June 30,
2012, and does not include an
adjustment for price inflation. As the
FQHC PPS is to be implemented
beginning October 1, 2014, we propose
to update the base rate to account for the
price inflation through September 30,
2014. We propose to use the MEI as
finalized in the CY 2011 PFS final rule
(75 FR 73262 through 73270). The MEI
is an index reflecting the weightedaverage annual price change for various
inputs involved in furnishing
physicians’ services. The MEI is a fixedweight input price index, with an
adjustment for the change in economywide, private nonfarm business
multifactor productivity.
We propose to inflate the base rate by
approximately 1.8 percent, reflecting the
growth in the MEI from July 1, 2012
through September 30, 2014. We also
propose to use a forecasted MEI update
of 1.7 percent for the 15-month period
of October 1, 2014, through December
31, 2015, to calculate the first year’s
base payment amount under the PPS.
The 15-month update factor is based on
the 2013Q2 forecast of the 2006-based
MEI, the most recent forecast available
at the time of this proposed rule. The
adjusted base payment that reflects the
MEI historical updates and forecasted
updates to the MEI is $155.90. This
payment rate incorporates a combined
MEI update factor of 1.0364 that trends
dollars forward from July 1, 2012
through December 31, 2015. We also
propose if more recent data became
available (for example, a more recent
estimate of the FY 2006-based MEI), we
would use such data, if appropriate, to
determine the 15-month FQHC PPS
update factor for the final rule.
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TABLE 1—BASE RATE PER DAILY VISIT
Total estimated
costs
Daily encounters
Average payment
multiplier
Average cost per
daily visit
Estimated base
rate without
adjustment for
price inflation
MEI update factor
MEI-adjusted base
payment rate
$788,547,531
5,223,512
1.0036
$150.96
$150.42
1.0364
$155.90
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MEI-adjusted base payment rate =
$150.96 × (1/1.0036) × 1.0364 =
$155.90
Thus, we propose a base payment rate
of $155.90 per beneficiary per day for
the proposed FQHC PPS. We note that
this base rate is subject to change in the
final rule based on more current data.
(See the Impact Analysis in section VII
of this proposed rule for comparisons of
the PPS rates to payments under the
AIR.)
Payments to FQHCs would be
calculated as follows:
Base payment rate × GAF = PPS
payment
In calculating the payment, the
proposed base payment rate is $155.90,
and the GAF would be based on the
locality of the delivery site. (See section
II.C. of this proposed rule for a
discussion of the GAF and the
Addendum to this proposed rule for the
list of proposed GAFs.)
If the patient is new to the FQHC, or
the FQHC is furnishing an initial
comprehensive Medicare visit, the
payment would be calculated as
follows:
Base payment rate × GAF × 1.3333 =
PPS payment
In calculating the payment, 1.3333
represents the risk adjustment factor
applied to the PPS payment when
FQHCs furnish care to new patients or
when they furnish a comprehensive
initial Medicare visit. (See section II.C.
of this proposed rule for a discussion of
the risk adjustment for new patients or
initial comprehensive Medicare visits.)
E. Implementation
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1. Transition Period and Annual
Adjustment
Section 1834(o)(2) of the Act requires
implementation of the FQHC PPS for
FQHCs with cost reporting periods
beginning on or after October 1, 2014.
Cost reporting periods are typically 12
months, and do not usually exceed 13
months. Therefore, we expect that all
FQHCs would be transitioned to the PPS
by the end of 2015, or 15 months after
the October 1, 2014 implementation
date.
FQHCs would transition into the PPS
based on their cost reporting periods.
We note that a change in cost reporting
periods that is made primarily to
maximize reimbursement would not be
acceptable under established cost
reporting policy (see 42 CFR 413.24(f)(3)
and the Provider Reimbursement
Manual Part I, section 2414, and Part II,
section 102.3). The claims processing
system will maintain the current system
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and the PPS until all FQHCs have
transitioned to the PPS.
We propose to transition the PPS to a
calendar year update for all FQHCs,
beginning January 1, 2016, because
many of the PFS files we are proposing
to use are updated on a calendar year
basis. Section 1834(o)(2)(B)(ii)(I) of the
Act requires us to adjust the FQHC PPS
rate by the percentage increase in the
MEI for the first year after
implementation. However, while
transitioning the PPS to a calendar year,
we propose to defer the first MEI
statutory adjustment to the PPS rate
from October 1, 2015, to December 31,
2015 (we note that our proposed base
payment rate incorporates a forecasted
percentage increase in the MEI through
December 31, 2015).
2. Medicare Claims Payment
Claims processing systems would
need to be revised through program
instruction to accommodate the new
rate and associated adjustments.
Medicare currently pays 80 percent of
the AIR for all FQHC claims, except for
mental health services that are subject to
the mental health payment limit.
Section 1833(a)(1)(z) of the Act requires
that Medicare payment under the FQHC
PPS should be 80 percent of the lesser
of the provider’s charge or the PPS rate.
We are considering revisions to the
claims processing system that would
reject claims in which the qualifying
visit describes a service that is outside
of the FQHC benefit, such as inpatient
hospital E/M services or group sessions
of DSMT and MNT. We are considering
revisions that would reject line items for
technical components such as x-rays,
laboratory tests, and durable medical
equipment which will not be paid as
part of the FQHC PPS and would be
billed separately to Medicare Part B. We
also are considering revisions that
would allow for the informational
reporting of influenza and
pneumococcal vaccines and their
administration, while excluding the line
item charges, as these items would
continue to be paid through the cost
report.
3. Beneficiary Coinsurance
Section 1833(a)(1)(Z) of the Act
requires that FQHCs be paid up to 80
percent of their reasonable costs by
Medicare after subtracting beneficiary
coinsurance. Under the current
reasonable cost payment system,
beneficiary coinsurance for FQHC
services is assessed based on the
FQHC’s charge, which can be more than
coinsurance based on the AIR, which is
based on costs. An analysis of a sample
of FQHC claims data for dates of service
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58397
between January 1, 2011 through June
30, 2012 indicated that beneficiary
coinsurance based on 20 percent of the
FQHCs’ charges was approximately $23
million higher, or 18 percent more, than
if coinsurance had been assessed based
on 20 percent of the lesser of the
FQHC’s charge or the applicable allinclusive rate.
Section 1833(a)(1)(Z) of the Act
requires that Medicare payment under
the FQHC PPS should be 80 percent of
the lesser of the actual charge or the PPS
rate. The statute makes no specific
provision to revise the coinsurance. We
propose that coinsurance would be 20
percent of the lesser of the FQHC’s
charge or the PPS rate. We believe that
the proposal to change the method to
determine coinsurance is consistent
with the statutory change to the FQHC
Medicare payment and is consistent
with statutory language in section
1866(a)(2)(A) and 1833(a)(3)(A) of the
Act and elsewhere that addresses
coinsurance amounts and Medicare cost
principles. If finalized, total payment to
the FQHC, including both Medicare and
beneficiary liability, would not exceed
the FQHC’s charge or the PPS rate.
4. Waiving Coinsurance for Preventive
Services
Effective January 1, 2011, Medicare
waives beneficiary coinsurance for
eligible preventive services furnished by
a FQHC. Medicare requires detailed
HCPCS coding on FQHC claims to
ensure that coinsurance is not applied
to the line item charges for these
preventive services.
For FQHC claims that include a mix
of preventive and non-preventive
services, we propose that Medicare
contractors compare payment based on
the FQHC’s charge to payments based
on the PPS encounter rate and pay the
lesser amount. However, the current
approach to waiving coinsurance for
preventive services, which relies solely
on FQHC reported charges, would be
insufficient under the FQHC PPS. As
Medicare payment under the FQHC PPS
is required to be 80 percent of the lesser
of the FQHCs charge or the PPS rate, we
also need to determine the coinsurance
waiver for payments based on the PPS
rate.
We considered using the proportion
of the FQHC’s line item charges for
preventive services to total claim
charges to determine the proportion of
the FQHC PPS rate that would not be
subject to coinsurance. This approach
would preserve the encounter-based rate
while basing the coinsurance reduction
on each FQHC’s relative assessment of
resources for preventive services.
However, the charge structure among
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FQHCs varies, and beneficiary liability
for the same mix of FQHC services
could differ significantly based on the
differences in charge structures.
Where preventive services are coded
on a claim, we propose to use payments
under the PFS to determine the
proportional amount of coinsurance that
should be waived for payments based
on the PPS encounter rate. While
physician-administered Part B drugs
and routine venipuncture will be paid
under the FQHC PPS rate, we note that
the Medicare Part B rates for these items
are not included in the PFS payment
files. Therefore, when determining this
proportionality of payments, we would
also consider PFS payment limits for
Part B drugs, as listed in the Medicare
Part B Drug Pricing File, and the
national payment amount for routine
venipuncture (HCPCS 36415). Although
FQHCs might list HCPCS for which we
do not publish a payment rate in these
files, a review of 2011 claims data
indicated that the vast majority of line
items with HCPCS representing services
that will be paid under the FQHC PPS
were priced in these sources. As such,
we believe that referencing only the
payment rates listed in these sources
would be both sufficient and
appropriate for determining the amount
of coinsurance to waive for preventive
services provided in FQHCs, without
changing the total payment (Medicare
and coinsurance). Since Medicare
payment under the FQHC PPS is
required to be 80 percent of the lesser
of the FQHC’s charges or the PPS rate,
we would continue to use FQHCreported charges to determine the
amount of coinsurance that should be
waived for payments based on the
FQHC’s charge. Total payment to the
FQHC, including both Medicare and
beneficiary liability, would not exceed
the FQHC’s charge or the PPS rate.
Our proposed approach for waiving
coinsurance for preventive services
preserves an encounter-based rate, and
the calculation is similar to the current
coinsurance calculation based on
charges. However, this calculation is
fairly complex for the claims processing
systems. It may also be difficult for
providers to replicate, and FQHCs might
not know how much coinsurance would
be assessed before the MAC issues the
remittance advice.
As an alternative approach, we
considered unbundling all services
when a FQHC claim includes a mix of
preventive and non-preventive services,
and we would exclude these types of
claims from calculation of the FQHC
base encounter rate. We would use
payments under the Medicare PFS to
pay separately for every service listed
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on the claim. While this approach is
inconsistent with an all-inclusive
payment, it would simplify waiving
coinsurance for preventive services and
pay preventive services comparably to
PFS settings. However, the vast majority
of FQHC claims list only one HCPCS,
and unbundling all services introduces
coding complexity that might underpay
FQHCs for an encounter if they do not
code all furnished ancillary services. In
addition, payment for preventive
services under the PFS will be less, in
many cases, than the PPS encounter
rate.
Instead of unbundling all services
when a FQHC claim includes a mix of
preventive and nonpreventive services,
we considered the use of PFS payment
rates to pay separately for preventive
services billed on the FQHC claim,
while paying for the non-preventive
services under the FQHC PPS rate.
However, this would be problematic
when the preventive services represent
the service that would qualify the claim
as a FQHC encounter (for example,
IPPE, AWV, MNT). Under current
payment policy, the remaining ancillary
services would not be eligible for an
encounter payment without an
additional, qualifying visit on the same
claim.
We also considered using the dollar
value of the coinsurance that would be
waived under the PFS to reduce the
FQHC encounter-based coinsurance
amount when preventive services
appear on the claim. However, this
could lead to anomalous results, such as
negative coinsurance if the preventive
service(s) would have been paid more
under the PFS than the FQHC PPS rate,
and the amount of coinsurance waived
under the PFS would exceed 20 percent
of the FQHC PPS rate. We also were
concerned that the reduction in
coinsurance would seem insufficient if
the payment rate for the preventive
service(s) was very low under the PFS.
We believe that using the
proportionality of PFS payments to
determine the coinsurance waiver
would facilitate the waiving of
coinsurance while preserving the allinclusive nature of the encounter-based
rate with the least billing complexity.
Therefore, we propose that where
preventive services are coded on a
claim, we would use payments under
the PFS to determine the proportional
amount of coinsurance that should be
waived for payments based on the PPS
encounter rate. We invite public
comment on how this proposal would
impact FQHCs’ administrative
procedures and billing practices.
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5. Cost Reporting
Under section 1815(a) of the Act,
providers participating in the Medicare
program are required to submit financial
and statistical information to achieve
settlement of costs relating to health
care services rendered to Medicare
beneficiaries. This information is
required for determining Medicare
payment for FQHC services under 42
CFR 405, Subpart X.
The Medicare cost reporting forms
show the costs incurred and the total
number of visits for FQHC services
during the cost reporting period. Using
this information, the MAC determines
the total payment amount due for
covered services furnished to Medicare
beneficiaries. The MAC compares the
total payment due with the total
payments made for services furnished
during the reporting period. If the total
payment due exceeds the total payments
made, the difference is made up by a
lump sum payment. If the total payment
due is less than the total payments
made, the overpayment is collected.
Under the FQHC PPS, Medicare
payment for FQHC services will be
made based on a predetermined
national rate. For services included in
the FQHC PPS rate, Medicare cost
reports would not be used to reconcile
Medicare payments with FQHC costs.
However, the statute does not exempt
FQHCs from submitting cost reports. In
addition, Medicare payments for the
reasonable costs of the influenza and
pneumococcal vaccines and their
administration, allowable graduate
medical education costs, and bad debts
would continue to be determined and
paid through the cost report. We are also
considering revisions to the cost
reporting forms and instructions that
would provide us with information that
would improve the quality of our cost
estimates, such as the reporting of a
FQHC’s overall and Medicare specific
CCR. We are also considering the types
of cost data that would facilitate the
potential development of a FQHC
market basket that could be used in base
payment updates after the second year
of the PPS. We also are exploring
whether we have audit resources to
include FQHCs in the pool of
institutional providers that are subject
to periodic cost report audits.
6. Medicare Advantage Organizations
Section 10501(i)(3)(C) of the
Affordable Care Act added section
1833(a)(3)(B)(i)(II) to the Act to require
that FQHCs that contract with MA
organizations be paid at least the same
amount they would have received for
the same service under the FQHC PPS.
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This provision ensures FQHCs are paid
at least the Medicare amount for FQHC
services, whether such amount is set by
section 1833(a)(3) of the Act or section
1834(o) of the Act. Consistent with
current policy, if the MA organization
contract rate is lower than the amount
Medicare would otherwise pay for
FQHC services, FQHCs that contract
with MA organizations would receive a
wrap-around payment from Medicare to
cover the difference. If the MA
organization contract rate is higher than
the amount Medicare would otherwise
pay for FQHC services, there is no
additional payment from Medicare. We
propose to revise § 405.2469 to reflect
this provision.
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III. Additional Proposed Changes
Regarding FQHCs and RHCs
A. Rural Health Clinic Contracting
Due to the difficulty in recruiting and
retaining physicians in rural areas,
RHCs have had the option of hiring
physicians either as RHC employees or
as contractors. However, in order to
promote stability and continuity of care,
the Rural Health Clinic Services Act of
1977 required RHCs to employ a
physician assistant or nurse practitioner
(section 1861(aa)(2)(iii) of the Act). We
have interpreted the term ‘‘employ’’ to
mean that the employer issues a W–2
form to the employee. Section
405.2468(b)(1) currently states that
RHCs are not paid for services furnished
by contracted individuals other than
physicians, and § 491.8(a)(3) does not
authorize RHCs to contract with RHC
practitioners other than physicians.
In the more than 30 years since this
legislation was enacted, the health care
environment has changed dramatically,
and RHCs have requested that they be
allowed to enter into contractual
agreements with non-physician RHC
practitioners as well as physicians. To
provide RHCs with greater flexibility in
meeting their staffing requirements, we
propose to revise § 405.2468(b)(1) by
removing the parenthetical ‘‘RHCs are
not paid for services furnished by
contracted individuals other than
physicians,’’ and revising § 491.8(a)(3)
to allow non-physicians to furnish
services under contract in RHCs, when
at least one NP or PA is employed.
The ability to contract with NPs, PAs,
CNMs, CP, and CSWs would provide
RHCs with additional flexibility with
respect to recruiting and retaining nonphysician practitioners. Practitioners
should be employed or contracted to the
RHC in a manner that enhances
continuity and quality of care.
RHCs would still be required, under
section 1861(aa)(2)(iii) of the Act, to
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employ a PA or NP. However, as long
as there is at least one PA or NP
employed at all times (subject to the
waiver provision for existing RHCs set
forth at section 1861(aa)(7) of the Act),
an RHC would be free to enter into
contracts with other PAs, NPs, CNM,
CPs or CSWs.
B. Technical and Conforming Changes
In addition to proposing to codify the
statutory requirements for the FQHC
PPS in this proposed rule and proposing
to allow RHCs to contract with nonphysician practitioners, we are
proposing edits to correct terminology,
clarify policy, delete irrelevant code,
and make conforming changes for
existing mandates and the new PPS.
Some of these changes include the
following:
• Removing the terms ‘‘fiscal
intermediary and carriers’’ and
replacing them with ‘‘Medicare
Administrative Contractor’’ or ‘‘MAC’’.
Section 911 of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003 established
the MACs to administer the work that
was done by fiscal intermediaries and
carriers in administering Medicare
programs.
• Removing the payment limitations
for treatment of mental psychoneurotic
or personality disorders. This payment
limitation is being phased out and will
no longer be in effect beginning January
1, 2014.
• Updating the regulations to reflect
section 410 of the Medicare
Modernization Act of 2003 to exclude
RHC and FQHC services furnished by
physicians and certain other specified
types of nonphysician practitioners
from consolidated billing under section
1888(e)(2)(A)(ii) of the Act and allows
such services to be separately billable
under Part B when furnished to a SNF
resident of a skilled nursing facility
(SNF) during a covered Part A stay (see
the July 30, 2004 final rule (69 FR 45818
through 45819). This statutory provision
was effective with services furnished on
or after January 1, 2005 and was
previously implemented through
program instruction (CMS Pub. 100–04,
Medicare Claims Processing Manual,
chapter 6, § 20.1.1).
IV. Clinical Laboratory Improvement
Amendments of 1988 (CLIA)—
Enforcement Actions for Proficiency
Testing Referral
A. Background
On October 31, 1988, Congress
enacted the Clinical Laboratory
Improvement Amendments of 1988
(CLIA), Pub. L. 100–578. The purpose of
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CLIA is to ensure the accuracy and
reliability of laboratory testing for all
Americans. Under this authority, which
was codified at 42 U.S.C. 263a, the
Secretary issued regulations
implementing CLIA on February 28,
1992 at 42 CFR part 493 (57 FR 7002).
The regulations specify the standards
and specific conditions that must be met
to achieve and maintain CLIA
certification. CLIA certification is
required for all laboratories, including
but not limited to those that participate
in Medicare and Medicaid, which test
human specimens for the purpose of
providing information for the diagnosis,
prevention, or treatment of any disease
or impairment, or the assessment of
health, of human beings.
The regulations require laboratories
conducting moderate or highcomplexity testing to enroll in an HHSapproved proficiency testing (PT)
program that covers all of the specialties
and subspecialties for which the
laboratory is certified and all analyses
listed in Subpart I of the CLIA
regulations. As of June 2013, there were
239,922 CLIA certified laboratories. Of
these laboratories, 35,035 are required to
enroll in an HHS-approved PT program
and are subject to all PT regulations.
Congress emphasized the importance
of PT when it drafted the CLIA
legislation. For example, in discussing
their motivation in enacting CLIA, the
Committee on Energy and Commerce
noted that it ‘‘focused particularly on
proficiency testing because it is
considered one of the best measures of
laboratory performance’’ and that
proficiency testing ‘‘is arguably the most
important measure, since it reviews
actual test results rather than merely
gauging the potential for good results.’’
(See H.R. Rep. No. 100–899, at 15
(1988).) The Committee surmised that,
left to their own devices, some
laboratories would be inclined to treat
PT samples differently than their patient
specimens, as they would know that the
laboratory would be judged based on its
performance in analyzing those
samples. For example, such laboratories
might be expected to perform repeated
tests on the PT sample, use more highly
qualified personnel than are routinely
used for such testing, or send the
samples out to another laboratory for
analysis. As such practices would
undermine the purpose of PT, the
Committee noted that the CLIA statute
was drafted to bar laboratories from
such practices, and to impose
significant penalties on those who elect
to violate those bars (H.R. Rep. No. 100–
899, at 16 and 24 (1988)).
PT is a valuable tool the laboratory
can use to verify the accuracy and
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reliability of its testing. During PT, an
HHS-approved PT program sends
samples to be tested by a laboratory on
a scheduled basis. After testing the PT
samples, the laboratory reports its
results back to the PT program for
scoring. Review and analysis of PT
reports by the laboratory director will
alert the director to areas of testing that
are not performing as expected and may
also indicate subtle shifts or trends that,
over time, could affect patient results.
As there is no on-site, external proctor
for PT testing in a laboratory, the testing
relies in large part on an honor system.
The PT program places heavy reliance
on each laboratory and laboratory
director to self-police their analysis of
PT samples to ensure that the testing is
performed in accordance with the CLIA
requirements. For each PT event,
laboratories are required to attest that
PT samples are tested in the same
manner as patient specimens are tested.
PT samples are to be assessed by
integrating them into the laboratory’s
routine patient workload, and the
testing itself is to be conducted by the
personnel who routinely perform such
testing, using the laboratory’s routine
methods. The laboratory is barred from
engaging in interlaboratory
communication pertaining to results
prior to the PT program’s event cut-off
date and must not send the PT samples
or any portion of the PT samples to
another laboratory for testing, even if it
would normally send a patient
specimen to another laboratory for
testing.
Any laboratory that intentionally
refers its PT samples to another
laboratory for analysis risks having its
certification revoked for at least 1 year,
in which case, any owner or operator of
the laboratory risks being prohibited
from owning or operating another
laboratory for 2 years (42 CFR
493.1840(a)(8), (b)). The phrase
‘‘intentionally referred’’ has not been
defined by the statute or regulations, but
we have consistently interpreted this
phrase from the onset of the program to
mean general intent, as in intention to
act. Whether or not acts are authorized
or even known by the laboratory’s
management, a laboratory is responsible
for the acts of its employees. Among
other things, laboratories need to have
procedures in place and train employees
on those procedures to prevent staff
from forwarding PT samples to other
laboratories even in instances in which
they would normally forward a patient
specimen for testing.
In the February 7, 2013 Federal
Register (78 FR 9216), we published a
proposed rule titled Part II—Regulatory
Provisions to Promote Program
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Efficiency, Transparency and Burden
Reduction (hereafter referred to as the
Burden Reduction proposed rule) to
propose reforms to the Medicare and
CLIA regulations that we had identified
as unnecessary, obsolete, or excessively
burdensome. In that rule, we proposed
changes to the CLIA PT regulations to
establish policies under which certain
PT referrals by laboratories would
generally not be subject to revocation of
their CLIA certificate or a 2 year
prohibition on laboratory ownership or
operation. To do this, we proposed a
narrow exception in our longstanding
interpretation of what constitutes an
‘‘intentional’’ PT referral.
While that proposed rule was under
development but before its publication,
Congress enacted the ‘‘Taking Essential
Steps for Testing Act of 2012’’ (Pub. L.
112–202, the ‘‘TEST Act’’) on December
4, 2012. The TEST Act amended section
353 of the PHS Act to provide the
Secretary with discretion as to which
sanctions she would apply to cases of
intentional PT referral.
In the Burden Reduction proposed
rule (78 FR 9216), we stated that we
would address the TEST Act in future
rulemaking, except that to comply with
the TEST Act and begin to align the
CLIA regulations with the amended
CLIA statute, we proposed to revise the
second sentence of § 493.801(b)(4) to
state that a laboratory may (as opposed
to ‘‘must’’) have its CLIA certification
revoked when CMS determines PT
samples were intentionally referred to
another laboratory.
The regulatory changes that we are
now proposing would add the
remaining policies and regulatory
changes needed to fully implement the
TEST Act.
B. Proposed Changes
As noted earlier, the TEST Act
provided the Secretary with the
discretion to substitute intermediate
sanctions in lieu of the 2 year
prohibition on the owner and operator
when a CLIA certificate is revoked due
to intentional PT referral, and to
consider imposing alternative sanctions
in lieu of revocation in such cases as
well. The TEST Act provides the
Secretary with the opportunity to frame
policies that will achieve a better
correlation between the nature and
extent of intentional PT referrals at a
given laboratory, and the scope and type
of sanctions or corrective actions that
are imposed on that laboratory and its
owners and operators, as well as any
consequences to other laboratories
owned or operated by those owners and
operators.
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We are proposing to divide the
sanctions for PT referral into three
categories based on severity and extent
of the referrals. The first category is for
the most serious, egregious violations,
encompassing cases of repeat PT referral
or cases where a laboratory reports
another laboratory’s test results as its
own. In such cases, we do not believe
that alternative sanctions would be
appropriate. Therefore, we are
proposing to revoke the CLIA certificate
for at least 1 year in instances in which
a laboratory has a repeat proficiency
testing referral, ban the owner and
operator from owning or operating a
CLIA-certified laboratory for at least 1
year, and may also impose a civil
monetary penalty (CMP). In keeping
with the February 7, 2013 proposed rule
(78 FR 9216), we propose to define, at
§ 493.2, ‘‘a repeat proficiency testing
referral’’ as ‘‘a second instance in which
a proficiency testing sample, or a
portion of a sample, is referred, for any
reason, to another laboratory for
analysis prior to the laboratory’s
proficiency testing program event cutoff date within the period of time
encompassing the two prior survey
cycles (including initial certification,
recertification, or the equivalent for
laboratories surveyed by an approved
accreditation organization).’’ We believe
that a repeat PT referral warrants
revocation of a laboratory’s CLIA
certificate for at least 1 year because
such laboratories have already been
given opportunity to review their
policies, correct their deficiencies and
adhere to regulations, and adherence to
the laboratory’s established policy, and
ensure effective training of their
personnel. As there is no on-site,
external proctor for PT testing in a
laboratory, the testing relies in large part
on an honor system. Therefore, when a
PT referral has previously occurred
prior to the event cut-off date within the
two prior survey cycles, we do not
believe that laboratories should be given
additional opportunities to ensure that
they are meeting the CLIA PT
requirements and believe that
revocation of the CLIA certificate should
consequently occur. We also propose, in
the first category, that the CLIA
certificate be revoked, and the owner
and operator banned from owning or
operating a CLIA-certified laboratory for
at least 1 year, in cases where the PT
sample was referred to another
laboratory, the referring laboratory
received the results from the other
laboratory, and the referring laboratory
reported to the PT program the other
laboratory’s results on or before the
event cut-off date. We note that PT
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programs place heavy reliance on each
laboratory and laboratory director to
self-police their analysis of PT samples
to ensure that the testing is performed
in accordance with the CLIA
requirements. PT performance and
scores must reflect an individual
laboratory’s performance, and as such,
reporting results from another
laboratory is deceptive to the public. We
believe these two scenarios are the most
egregious forms of PT referral and merit
the most severe sanctions.
For example, a laboratory may have
two distinct sites, Laboratory A and
Laboratory B, that operate under
different CLIA numbers, where
Laboratory A has received PT samples
to be tested as part of their enrollment
in PT as required by the CLIA
regulations. If Laboratory A were to refer
PT samples to Laboratory B, receive test
results back at Laboratory A from
Laboratory B prior to the event cutoff
date, and report to the PT program those
results obtained from Laboratory B, the
scores for the PT event would not reflect
the performance of Laboratory A, but
rather the performance of Laboratory B.
Since the PT scores would actually be
reflective of the accuracy and reliability
at Laboratory B rather than A, the
purpose of the proficiency testing would
be undermined. Further, as stated in the
CLIA regulations at § 493.801(4)(ii), the
laboratory must make PT results
available to the public. In this scenario,
any member of the public who sought
to use the reported PT scores to select
a high-quality laboratory would be
deceived by the scores for the results
submitted to the PT program, as they
would expect that they were provided
information about the performance of
Laboratory B when that would not be
the case.
In cases of PT referral where the CLIA
certificate is revoked, the TEST Act
provides the Secretary with discretion
to ban the owner and operator from
owning or operating a CLIA-certified
laboratory for less than 2 years. Prior to
the TEST Act, revocation of a CLIA
certificate for PT violation always
triggered a 2-year ban on the owner and
operator. We are also proposing that the
laboratory owner and operator would be
banned from owning or operating a
CLIA-certified laboratory for at least 1
year for any violation within the first
category involving the revocation of a
CLIA certificate.
We believe that a second category of
sanctions should be applied to certain
PT referral situations in which the CLIA
certificate would be suspended or
limited (rather than revoked), in
combination with alternative sanctions.
We propose to use this approach in
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those instances in which a laboratory
refers PT samples to a laboratory that
operates under a different CLIA number
before the PT event close date and,
while the laboratory reports its own
results to the PT program, it receives
results from the second laboratory prior
to the event close date. Such a referral
situation would allow the referring
laboratory an opportunity to confirm,
check, or change its results prior to
reporting its results to the PT program.
If, upon investigation, surveyors
determine that the referral does not
constitute a repeat PT referral, we
propose to suspend or limit the CLIA
certificate for less than 1 year rather
than revoke the CLIA certificate, and
propose that we also impose alternative
sanctions (as an alternative to
revocation of the CLIA certificate).
Further, an alternative sanction would
always include required training of staff.
A suspension of the CLIA certificate
means that no testing of human
specimens for health care purposes may
be performed by that laboratory during
the period of suspension. In such cases,
the owner or operator typically
contracts out for laboratory services, or
contracts with another operator to
operate the laboratory under the
contracted laboratory’s CLIA certificate.
In contrast to revocation of the CLIA
certificate and its accompanying ban on
the owner and operator, suspension
usually applies only to the individual
laboratory in question rather than all
laboratories that are under the control of
the owner or operator.
A limitation of the CLIA certificate
means that the laboratory is not
permitted to perform testing or to bill
Medicare or Medicaid for laboratory
work in the specialty or subspecialty
that has been limited, but may continue
to conduct all other testing under its
own CLIA certificate.
In determining whether to suspend or
limit the CLIA certificate, we propose to
apply the criteria of § 493.1804(d). For
example, we would examine the extent
of the PT referral practice as well as its
duration. We propose that if surveyors
determine that in the prior two survey
cycles there were prior PT referrals that
occurred but were not cited by CMS,
then the CLIA certificate would always
be suspended rather than just limited.
The duration of the suspension would
reflect the number of samples referred,
the period of time the referrals had been
occurring, the extent of the practice, and
other criteria specified at § 493.1804(d).
Further, for cases in the second
category we propose that when the
certificate is suspended or limited,
alternative sanctions would be applied
in addition to the principal sanctions of
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suspension or limitation. We propose
that, at a minimum, the alternative
sanctions would include a CMP to be
determined using the criteria set forth in
§ 493.1834, as well as a directed plan of
correction. Additionally, if the CLIA
certificate is suspended, we propose to
also impose state on-site monitoring of
the laboratory.
We believe that a third category of
sanctions should be applied to those PT
referral scenarios in which the referring
laboratory does not receive test results
prior to the event cut-off date from
another laboratory as a result of the PT
referral. We propose that in such
scenarios, at a minimum, the laboratory
will always be required to pay a CMP
as calculated according to § 493.1834, as
well as comply with a directed plan of
correction. A directed plan of correction
would always include training of staff.
For example, a laboratory may place
PT samples in an area where other
patient specimens are picked up by
courier to take to a reference laboratory.
The reference laboratory courier may
take the PT samples along with the
patients’ specimens. The laboratory
personnel notice that the PT samples are
missing and contact the reference
laboratory to inquire if they have
received the PT samples along with the
patients’ specimens. The reference
laboratory is instructed to discard the
PT samples and not test them since they
were picked up in error. In this case, the
‘‘referring’’ laboratory realized the error,
contacted the receiving laboratory, and
did not receive results back for any of
the PT samples. In this scenario, we
propose to impose only alternative
sanctions. We welcome comments about
other scenarios in which you believe
lesser sanctions may also be
appropriate.
In determining whether to impose
alternative sanctions, we propose to rely
on the existing considerations at
§ 493.1804(c) and (d), § 493.1806(c),
§ 493.1807(b), § 493.1809 and, in the
case of civil money penalties,
§ 493.1834(d). These current regulations
have proven effective as enforcement
measures over time for CLIA
noncompliance for all circumstances
other than PT referral. We therefore
believe these same criteria will be
effective in the imposition of alternative
sanctions for PT referral cases.
In summary, we propose to amend
§ 493.1840 by revising paragraph (b) to
specify three categories for the
imposition of sanctions for PT referrals.
We believe these provisions, as
amended, would provide the necessary
detail to fairly and uniformly apply the
discretion granted to the Secretary
under the TEST Act, without being so
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specific as to defeat the intent to
provide appropriate flexibility when
taking punitive or remedial action in the
context of a PT referral finding.
We also propose to make three
conforming changes to the CLIA
regulations at the authority citation for
Part 493 and at § 493.1 and
§ 493.1800(a)(2) to include references to
the Public Health Service Act as
amended by the TEST Act.
We invite the public to comment on
our proposed categorization of potential
PT referral situations, the criteria we
propose for assessing the scope and
severity of any violation, and the types
of sanctions that correspond to each
category.
V. Other Required Information
A. Requests for Data From the Public
sroberts on DSK5SPTVN1PROD with PROPOSALS
Commenters can gain access to
summarized FQHC data on an expedited
basis by downloading the files listed in
this section, which are available on the
Internet without charge. For detailed
claims data, requestors would follow the
current research request process which
can be found on the Research Data
Assistance Center (ResDAC) Web site at
https://www.resdac.org/.
1. FQHC Summary Data. This file
contains data summarized by CCN,
which can be used to model the
proposed methodology and calculate
projected payments and impacts under
the proposed PPS. The data file is
available at https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/FQHCPPS/.
2. FQHC Proposed GAFs. This file
contains the listed of proposed GAFs by
locality, as published in Addendum A
of this proposed rule. The data file is
available at https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/FQHCPPS/.
3. HCRIS Cost Report Data. The data
included in this file was reported on
Form CMS–222–92. The dataset
includes only the most current version
of each cost report filed with CMS and
includes cost reports with fiscal year
ending dates on or after September 30,
2009. HCRIS updates this file on a
quarterly basis. The data file is available
at https://www.cms.gov/ResearchStatistics-Data-and-Systems/Files-forOrder/CostReports/HealthClinic.html.
B. Collection of Information
Requirements
Under the Paperwork Reduction Act
of 1995, we are required to provide 60day notice in the Federal Register and
solicit public comment before a
collection of information requirement is
submitted to the Office of Management
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and Budget (OMB) for review and
approval. In order to fairly evaluate
whether an information collection
should be approved by OMB, section
3506(c)(2)(A) of the Paperwork
Reduction Act of 1995 requires that we
solicit comment on the following issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of our agency.
• The accuracy of our estimate of the
information collection burden.
• The quality, utility, and clarity of
the information to be collected.
• Recommendations to minimize the
information collection burden on the
affected public, including automated
collection techniques.
We are soliciting public comment on
the information collection requirements
(ICRs) regarding the proposed FQHC
rates and adjustments in § 405.2470.
Section II. of this proposed rule
discusses the data that are used in
computing the FQHS PPS rates and
adjustments. As discussed, the data are
derived from the RHC/FQHC cost report
form CMS–222–92, and claims form
UB–04 CMS 1450 (per CMS Pub. 100–
04, Medicare Claims Processing Manual,
Chapter 1). The reporting requirements
for FQHCs are in§ 405.2470 of the
Medicare regulations. We note that,
while the preamble does not contain
any new ICRs, there is currently an
OMB approved information collection
request associated with the RHC/FQHC
cost report. The OMB control number is
0938–0107, with an expiration date of
August 31, 2014.
If you comment on this information
collection and recordkeeping
requirement, please do either of the
following:
1. Submit your comments
electronically as specified in the
ADDRESSES section of this proposed rule;
or
2. Submit your comments to the
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Attention: CMS Desk Officer,
[CMS–1443–P] Fax: (202) 395–6974; or
Email: OIRA_submission@omb.eop.gov.
VI. Response to Comments
Because of the large number of public
comments we normally receive on
Federal Register documents, we are not
able to acknowledge or respond to them
individually. We will consider all
comments we receive by the date and
time specified in the DATES section of
this preamble, and, when we proceed
with a subsequent document, we will
respond to the comments in the
preamble to that document.
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VII. Regulatory Impact Analysis
A. Statement of Need
This proposed rule is necessary to
establish a methodology and payment
rates for a PPS for FQHC services under
Medicare Part B beginning on October 1,
2014, in compliance with the statutory
requirements of section 10501(i)(3)(A) of
the Affordable Care Act. This proposed
rule also is necessary to make—(1)
contracting changes for RHCs; (2)
conforming changes to other policies
related to FQHCs and RHCs; (3) changes
to enforcement actions for improper
proficiency testing referrals.
B. Overall Impact
We have examined the impacts of this
rule as required by Executive Order
12866 on Regulatory Planning and
Review (September 30, 1993), Executive
Order 13563 on Improving Regulation
and Regulatory Review (January 18,
2011), the Regulatory Flexibility Act
(RFA) (September 19, 1980, Pub. L. 96–
354), section 1102(b) of the Social
Security Act, section 202 of the
Unfunded Mandates Reform Act of 1995
(March 22, 1995; Pub. L. 104–4),
Executive Order 13132 on Federalism
(August 4, 1999) and the Congressional
Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Section 3(f) of Executive Order
12866 defines a ‘‘significant regulatory
action’’ as an action that is likely to
result in a rule: (having an annual effect
on the economy of $100 million or more
in any 1 year, or adversely and
materially affecting a sector of the
economy, productivity, competition,
jobs, the environment, public health or
safety, or state, local or tribal
governments or communities (also
referred to as ‘‘economically
significant’’); (2) creating a serious
inconsistency or otherwise interfering
with an action taken or planned by
another agency; (3) materially altering
the budgetary impacts of entitlement
grants, user fees, or loan programs or the
rights and obligations of recipients
thereof; or (4) raising novel legal or
policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
A regulatory impact analysis (RIA)
must be prepared for major rules with
economically significant effects ($100
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million or more in any 1 year). This
proposed rule is an economically
significant rule because we estimate that
the FQHC PPS will increase payments
to FQHCs by more than $100 million in
1 year. We believe that this regulation
would not have a significant financial
impact on RHCs. We estimate that this
rulemaking is ‘‘economically
significant’’ as measured by the $100
million threshold, and hence also a
major rule under the Congressional
Review Act. Accordingly, we have
prepared a RIA that, to the best of our
ability, presents the costs and benefits of
the rulemaking.
The RFA requires agencies to analyze
options for regulatory relief of small
businesses. For purposes of the RFA,
small entities include small businesses,
nonprofit organizations, and
government jurisdictions. All RHCs and
FQHCs are considered to be small
entities. The great majority of hospitals
and most other health care providers
and suppliers are small entities, either
by being nonprofit organizations or by
meeting the SBA definition of a small
business (having revenues of less than
$7.0 million to $35.5 million in any 1
year). The provisions in this proposed
rule have an average of 30 percent
increase in Medicare PPS payment to
FQHCs and no financial impact on
RHCs. Individuals and states are not
included in the definition of a small
entity.
In addition, section 1102(b) of the Act
requires us to prepare a regulatory
impact analysis if a rule may have a
significant impact on the operations of
a substantial number of small rural
hospitals. This analysis must conform to
the provisions of section 603 of the
RFA. For purposes of section 1102(b) of
the Act, we define a small rural hospital
as a hospital that is located outside of
a metropolitan statistical area and has
fewer than 100 beds. As its measure of
significant economic impact on a
substantial number of small entities,
HHS uses a change in revenue of more
than 3 to 5 percent. We are not
preparing an analysis for section 1102(b)
of the Act, because we have determined
that this proposed rule would not have
a significant impact on the operations of
a substantial number of small rural
hospitals.
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates
require spending in any 1 year of $100
million in 1995 dollars, updated
annually for inflation. In 2013, that is
approximately $141 million. This
proposed rule does not include any
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mandates that would impose spending
costs on state, local, or tribal
governments in the aggregate, or by the
private sector, that would exceed the
threshold of $141 million.
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
compliance costs on state and local
governments, preempts state law, or
otherwise has Federalism implications.
This proposed rule would not have a
substantial effect on state and local
governments, preempt state law, or
otherwise have Federalism implications.
This proposed regulation is subject to
the Congressional Review Act
provisions of the Small Business
Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and has been
transmitted to the Congress and the
Comptroller General for review.
C. Limitations of Our Analysis
Our quantitative analysis presents the
projected effects of our proposed policy
changes, as well as statutory changes
effective on FQHCs for cost reporting
periods beginning on or after October 1,
2014. We estimated the effects of
individual proposed policy changes by
estimating payments per visit while
holding all other payment policies
constant. We use the best data available,
but, generally, we do not attempt to
make adjustments for future changes in
such variables as the number of visits or
the prevalence of new patients or
comprehensive initial Medicare visits
furnished to Medicare beneficiaries. To
the extent that there are changes in the
volume and mix of services furnished
by FQHCs, the actual impact on total
Medicare revenues will be different
from those shown in Table 2 (Impact of
the PPS on Payments to FQHCs).
D. Anticipated Effects of the FQHC PPS
1. Effects on FQHCs
As required by section 1834(o)(2)(B)(i)
of the Act, initial payments (Medicare
and coinsurance) under the FQHC PPS
must equal 100 percent of the estimated
amount of reasonable costs, as
determined without the application of
the current system’s UPLs or
productivity standards that can reduce a
FQHC’s per visit rate. As discussed in
sections I and II. of this proposed rule,
we propose to pay FQHCs a single
encounter-based rate per beneficiary per
day, adjusting for geographic differences
in the cost of inputs by applying an
adaptation of the GPCI used to adjust
payment under the PFS, and further
adjusting the encounter-based rate when
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58403
a FQHC furnishes care to a patient that
is new to the FQHC or to a beneficiary
receiving a comprehensive initial
Medicare visit (that is, an IPPE an initial
AWV).
Based on comparisons of the
proposed PPS rate to the AIRs (as listed
on the FQHC cost reports), the proposed
FQHC PPS is estimated to have an
overall impact of increasing total
Medicare payments to FQHCs by
approximately 30 percent. The FQHC
PPS is effective for cost reports
beginning on or after October 1, 2014.
This impact is fully implemented when
all FQHCs are paid under the FQHC PPS
and reflects the additional payment rate
update based on the MEI for all of 2015
(fiscal year through the end of the
calendar year). (See section II.E. of this
proposed rule for a discussion of the use
of the MEI update to calculate the first
year’s base payment amount under the
FQHC PPS.)
Table 2 shows the impact on cost
reporting entities and their associated
delivery sites of the fully implemented
proposed FQHC PPS payments
compared to current payments to
FQHCs. The analysis is based on cost
reports from freestanding FQHCs with
cost reporting periods ending between
June 30, 2011, and June 30, 2012. A
FQHC with multiple sites has the option
of filing a consolidated cost report, and
this sample reflects 1,141 cost reporting
entities that represent 3,509 delivery
sites. The following is an explanation of
the information represented in Table 2:
• Column A (Number of costreporting entities): This column shows
the number of cost-reporting entities for
each impact category. Urban/rural status
and census division were determined
based on the geographic location of the
cost reporting entity. Categories for
Medicare volume were defined from
cost report data, based on tertiles for the
percent of total visits that were
identified as Medicare visits. Categories
for total volume were defined from cost
report data, based on tertiles for the total
number of visits for each cost reporting
entity.
• Column B (Number of delivery
sites): This column shows the number of
delivery sites associated with the cost
reporting entities in each impact
category. (Note that delivery sites that
are part of a consolidated cost reporting
entity might not fall into the same
impact category if considered
individually. For example, a cost
reporting entity could include delivery
sites in multiple census division, and
delivery sites were categorized based on
the geographic location of the cost
reporting entity).
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• Column C (Number of Medicare
visits): This column shows the number
of Medicare visits in the final data set
that were used to model payments
under the FQHC PPS.
• Column D (Effect of statutorily
required changes): This column shows
the estimated fully implemented
combined impact on payments to
FQHCs of changes to the payment
structure that are required by statute.
Removing both the UPL and the
productivity screen is estimated to
increase total Medicare payments to
FQHCs by about 28 percent. The
combined impact in column D also
reflects the FQHC PPS requirement to
calculate payment based on the costs of
all FQHCs, rather than on an individual
FQHC’s costs. We note that the impacts
for column D through H reflect the
growth in the MEI from July 1, 2012
through September 30, 2014, prior to the
application of the forecasted MEI update
for the 15-month period of October 1,
2014 through December 31, 2015.
• Columns E through H (Effects of the
Proposed Adjustments to the Average
Cost per Visit): These columns show the
estimated fully implemented impacts on
Medicare payments to FQHCs due to the
proposed policy changes. In developing
the Medicare FQHC PPS, section
10501(i)(3)(A) of the Affordable Care
Act requires CMS to take into account
the type, intensity, and duration of
FQHC services, and allows other
adjustments, such as geographic
adjustments. As discussed in section
II.C of this proposed rule, the cost report
data are insufficient for modeling these
types of adjustments, and we propose to
use the HCPCS codes in the FQHC
claims data to support the development
of the FQHC PPS rate and adjustments
and for making payment under the PPS.
As demonstrated in columns E–H, the
overall effect of these various
adjustments is budget neutral.
• Column E (Effect of daily visit (per
diem) rate): This column shows the
estimated fully implemented impact on
payments to FQHCs of the proposal to
pay a single encounter-based rate per
beneficiary per day, which eliminates
the current exceptions that pay for more
than one visit per beneficiary per day.
As it is uncommon for FQHCs to bill
more than one visit per day for the same
beneficiary (less than 0.5 percent of
visits), this adjustment would have
minimal effect on most FQHCs.
• Column F (Effect of new patient/
initial visit adjustment): This column
shows the estimated fully implemented
impact on payments to FQHCs of the
proposal to adjust the encounter-based
rate by 1.3333 when a FQHC furnished
care to a patient that was new to the
FQHC or to a beneficiary receiving a
comprehensive initial Medicare visit. As
new patients and initial Medicare visits
accounted for approximately 3 percent
of all FQHC visits, this adjustment
would have limited reduction on the
base encounter rate, after application of
budget neutrality, and a limited
redistribution effect among FQHCs.
• Column G (Effect of the GAF): This
column shows the estimated fully
implemented impact on payments to
FQHCs of the proposal to adjust
payments for geographic differences in
costs by applying an adaptation of the
GPCIs used to adjust payment for
physician work and practice expense
under the PFS.
• Column H (Combined effect of all
PPS adjustments): This column shows
the estimated fully implemented impact
on payments to FQHCs of the proposed
adjustments in columns E through G.
Both the individual and combined
effects of these adjustments on overall
Medicare payment to FQHCs would be
zero percent as the effects of these
adjustments would be redistributive and
would not change Medicare payments
in the aggregate.
• Column I (Combined effect of all
policy changes and MEI adjustment):
This column shows the estimated fully
implemented impact on payments to
FQHCs of removing the UPL and
productivity screen in Column D, the
adjustments to the PPS rates in the
preceding columns, and the application
of the forecasted MEI update for the 15month period of October 1, 2014
through December 31, 2015.
TABLE 2—IMPACT OF THE PPS ON PAYMENTS TO FQHCS
Number of
delivery
sites
Number of
Medicare
visits
Effect of
statutorily
required
changes
(percent)
Effect of
daily visit
(per diem)
rate
(percent)
Effect of
new patient/
initial visit
adjustment
(percent)
Effect of
geographic
adjustment
factor
(GAF)
(percent)
Combined
effect of all
PPS
adjustments
(percent)
Combined
effect of all
policy
changes
and MEI
adjustment
(percent)
(A)
sroberts on DSK5SPTVN1PROD with PROPOSALS
Number of
cost-reporting
entities
(B)
(C)
(D)
(E)
(F)
(G)
(H)
(I)
All FQHCs ...............................
Urban/rural Status:
Urban ...............................
Rural .................................
Mixed rural-urban .............
Medicare Volume:
Low (<6.9% of total visits)
Medium (6.9%–13.2% of
total visits) ....................
High (>13.2% of total visits) .................................
Total Volume:
Low (<17,340 total visits)
Medium (17,340–42,711
total visits) ....................
High (>42,711 total visits)
Census Division:
New England ....................
Middle Atlantic ..................
East North Central ...........
West North Central ..........
South Atlantic ...................
East South Central ...........
West South Central ..........
Mountain ..........................
Pacific ...............................
US Territories ...................
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1,141
3,509
5,245,961
28.0
0.0
0.0
0.0
0.0
30.2
647
348
146
1,756
820
933
2,518,395
1,385,116
1,342,450
21.8
39.3
29.6
¥0.2
0.2
0.2
0.0
¥0.9
0.0
3.1
¥3.1
¥2.7
3.0
¥3.0
¥2.5
27.6
37.4
28.5
380
1,039
851,771
22.6
¥0.1
0.2
3.3
3.4
28.9
381
1,235
1,751,498
25.5
¥0.1
0.1
0.0
0.5
28.2
380
1,237
2,642,692
31.7
0.1
¥0.2
¥1.3
¥1.4
32.0
380
502
426,346
31.8
0.0
0.1
¥0.1
0.0
34.1
381
380
903
2,123
1,253,817
3,565,798
29.6
27.1
0.0
0.0
0.1
¥0.1
¥1.6
0.6
¥1.5
0.5
29.8
29.9
92
108
143
78
187
83
107
87
252
4
236
314
460
201
688
317
287
311
690
5
657,794
457,798
603,034
248,891
1,049,755
374,386
337,375
368,666
1,145,897
2,365
25.7
23.1
29.2
29.2
31.0
36.1
29.4
29.2
24.8
36.7
¥0.4
0.1
¥0.2
0.0
0.2
0.1
0.1
¥0.1
0.1
0.4
¥0.2
0.0
0.1
0.1
0.0
0.0
0.2
0.3
¥0.1
1.1
1.8
3.1
¥2.7
¥5.1
¥3.0
¥6.8
¥5.3
¥2.1
7.5
¥0.5
1.2
3.2
¥2.7
¥5.1
¥2.9
¥6.7
¥5.0
¥1.9
7.5
1.0
29.3
29.1
27.7
24.6
29.3
29.2
25.0
28.9
36.4
41.2
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2. Effects on RHCs
While we expect that removing the
restriction on contracting will result in
cost savings for RHCs that employ an
NP or PA and will no longer need to
conduct employment searches to meet
their additional staffing needs, the
financial impact on RHCs is expected be
small and cannot be quantified.
There is no Medicare impact on RHCs
as a result of the implementation of the
FQHC PPS.
3. Effects on Other Providers and
Suppliers
There would be no financial impact
on other providers or suppliers as a
result of the implementation of the
FQHC PPS.
4. Effects on the Medicare and Medicaid
Programs
We estimate that annual Medicare
spending for FQHCs during the first 5
years of implementation would increase
as follows:
TABLE 3—ESTIMATED INCREASE IN ANNUAL MEDICARE PAYMENTS TO
FQHCS
Calendar year
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2014
2015
2016
2017
2018
Estimated increase in
payments
($ in millions)
..........................
..........................
..........................
..........................
..........................
33
204
226
236
248
We intend for estimated aggregate
payments under the proposed FQHC
PPS to equal 100 percent of the
estimated amount of reasonable costs, as
determined without the application of
the current system’s UPLs or
productivity standards. We note that the
estimated increase in payments for CY
2014 is significantly smaller than for
subsequent years, primarily due to the
implementation date of October 1, 2014,
which will affect payments for only 3
months of CY 2014. In addition, an
analysis of 2010 cost reporting data
indicates that approximately 6 percent
of FQHC cost reporting entities had cost
reporting periods that began between
October 1 and December 31, which
indicates that we would expect a small
percentage of cost reporting entities to
be paid under the FQHC PPS between
October 1, 2014 and December 31, 2014.
After the first year of implementation,
the PPS payment rates must be
increased by the percentage increase in
the MEI. After the second year of
implementation, PPS rates shall be
increased by the percentage increase in
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a market basket of FQHC goods and
services as established through
regulations, or, if not available, the MEI.
While we will consider the merits of
estimating a FQHC market basket for use
in base payment updates after the
second year of the PPS, payment
estimates were updated annually by the
MEI for purposes of this analysis.
There is no financial impact on the
Medicaid program as a result of the
implementation of the Medicare FQHC
PPS.
5. Effects on Medicare Beneficiaries
FQHC PPS: As discussed in section
II.E. of this proposed rule, we propose
that coinsurance under the FQHC PPS
would be 20 percent of the lesser of the
FQHC’s charge or the PPS rate. Under
the current reasonable cost payment
system, beneficiary coinsurance for
FQHC services is assessed based on the
FQHC’s charge, which can be more than
coinsurance based on the AIR. An
analysis of a sample of FQHC claims
data for dates of service between
January 1, 2011 through June 30, 2012
indicated that beneficiary coinsurance
based on 20 percent of the FQHC’s
charges was approximately $23 million
higher, or 18 percent more, than if
coinsurance had been assessed based on
20 percent of the lesser of the FQHC’s
charge or the applicable all-inclusive
rate.
Based on comparisons of the
proposed PPS rate to the AIRs, the
proposed FQHC PPS is estimated to
have an overall impact of increasing
total Medicare payments to FQHCs by
approximately 30 percent. This overall
30 percent increase translates to a 30
percent increase to beneficiary
coinsurance if it were currently assessed
based on the FQHC’s AIR and if, under
the PPS, it would always be assessed
based on the PPS rate. Because the
charge structure among FQHCs varies,
and beneficiary liability for the same
mix of FQHC services could differ
significantly based on the differences in
charge structures, we have insufficient
data to estimate the change to
beneficiary coinsurance due to the
FQHC PPS.
E. Effects of Other Policy Changes
1. Effects of Policy Changes for FQHC’s
and RHC’s
a. Effects of RHC Contracting Changes
In section III.A. of this proposed rule
we discuss our proposal to remove the
restrictions on RHCs contracting with
nonphysician practitioners when the
statutory requirement to employ an NP
or a PA is met would provide RHCs
with greater flexibility in meeting their
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58405
staffing requirements. The ability to
contract with NPs, PAs, CNMs, CP, and
CSWs would provide RHCs with
additional flexibility with respect to
recruiting and retaining non-physician
practitioners, which may result in
increasing access to care in rural areas.
There is no cost to the Federal
government and we cannot estimate a
cost savings for RHCs.
b. Effects of the FQHC and RHC
Conforming Changes
In section III.B. of this proposed rule,
we present our proposals regarding
clarifying, technical, conforming
changes to the FQHC and RHC
regulations that are necessary for
implementation of the FQHC PPS. We
believe that are no costs associated with
these changes.
2. Effects of CLIA Changes for
Enforcement Actions for Proficiency
Testing Referral
As discussed in section IV. of this
proposed rule, we would make a
number of clarifications and changes
pertaining to the regulations governing
adverse actions for PT referral under
CLIA to ensure conformance between
the TEST Act and our regulations. The
TEST Act provides the Secretary with
the discretion to apply alternative
sanctions in lieu of potential principal
sanctions in cases of intentional PT
referral. Alternative sanctions may
include any combination of civil money
penalties, directed plan of correction
(such as required remedial training of
staff), temporary suspension of
Medicare or Medicaid payments, or
state onsite monitoring. From 2007
through 2011 there were 41 cases of
cited, intentional PT referral. Of these
41 cases (averaging 8 per year), we
estimate that 28 (or 6 per year on
average) may have fit the terms of this
rule to have alternative sanctions
applied. Based on discussions with the
most recently affected laboratories that
were cited for PT violations, we
estimate that the average cost of the
sanctions applicable under current
regulations is approximately $578,400
per laboratory. The largest single type of
cost is the expense to the laboratory or
hospital to contract out for management
of the laboratory, and to pay laboratory
director fees, due to the 2-year ban that
prohibits the owner and operator from
owning or operating a CLIA-certified
laboratory in accordance with
revocation of the CLIA certificate. We
have not included legal expenses in this
cost estimate, as it is not possible to
estimate the extent to which laboratories
may still appeal the imposition of the
alternative sanctions in this proposed
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rule. If the expense of alternative
sanctions averaged $150,000 per
laboratory, we estimate the annual fiscal
savings of the changes to average $2.6
million ($578,400 minus $150,000 for 6
laboratories). While the total savings
may not be large, the savings to the
individual laboratory or hospital that is
affected can be significant. However, we
note that the $2.6 million estimate may
overstate or understate the provision’s
savings to laboratories. For example, if
under current regulations the prior
management is fired instead of being
reassigned to other duties for the 2-year
period, some of the costs of paying for
the new management’s salaries, benefits
and training may be able to be drawn
from funding that had previously been
earmarked to pay those expenses for
their predecessors. That is, the costs
associated with the new employee could
be offset by the savings gained when the
former employee is terminated. Any
such offset will result in lower savings
than is estimated earlier. However, there
are also unknowns that may result in
larger savings than estimated earlier. For
example, we have no data on whether
terminated management historically
received severance packages. If they did,
those savings would have to be added
to the savings we noted earlier. Such
changes in severance payments would
represent transfer effects of the
proposed rule, rather than net social
costs or benefits. In general, it is only to
the extent that new laboratory directors
put forth more effort than temporarilybanned laboratory directors (due, for
example, to the need to familiarize
themselves with laboratories they have
not previously operated) or that support
staff put forth more effort to make the
new management arrangements than
they would addressing alternative
sanctions that society’s resources would
be freed for other uses by the proposed
provision; thus, a comprehensive
estimate of laboratory savings would
represent some combination of transfers
and net social benefits. While we
recognize these potential inaccuracies in
our estimates, we lack data to account
for these considerations.
F. Alternatives Considered
This proposed rule contains a range of
policies, including some provisions
related to specific statutory provisions.
The preceding sections of this proposed
rule provide descriptions of the
statutory provisions that are addressed,
identifies those policies when discretion
has been exercised, presents rationale
for our final policies and, where
relevant, alternatives that were
considered.
G. Accounting Statement and Table
As required by OMB Circular A–4
(available at https://
www.whitehouse.gov/omb/circulars_
a004_a-4/), we have prepared an
accounting statement table showing the
classification of the impacts associated
with implementation of this proposed
rule.
TABLE 4—ACCOUNTING STATEMENT—CLASSIFICATION OF PROPOSED ESTIMATED EXPENDITURES UNDER THE FQHC PPS
Units
Category
Estimates
Transfers:
Federal Annualized Monetized Transfers (in millions) .............................
From Whom to Whom ..............................................................................
H. Conclusion
The previous analysis, together with
the remainder of this preamble,
provides an initial Regulatory
Flexibility Analysis. The previous
analysis, together with the remainder of
this preamble, provides a Regulatory
Impact Analysis.
In accordance with the provisions of
Executive Order 12866, this regulation
was reviewed by the Office of
Management and Budget.
List of Subjects
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42 CFR Part 405
Administrative practice and
procedure, Health facilities, Health
professions, Kidney diseases, Medical
devices, Medicare reporting and
recordkeeping requirements, Rural areas
and X-rays.
42 CFR Part 491
Grant programs—health, Health
facilities, Medicaid, Medicare,
Reporting and recordkeeping
requirements, Rural areas.
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183
187
PART 405—FEDERAL HEALTH
INSURANCE FOR THE AGED AND
DISABLED
1. The authority for citation for part
405 continues to read as follows:
■
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
2. Section 405.2400 is revised to read
as follows:
■
Basis.
Subpart X is based on the provisions
of the following sections of the Act:
Section 1833—Amounts of payment for
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2014
2014
Discount rate
(percent)
7
3
Period
covered
2014–2018
2014–2018
Federal Government to FQHCs that receive payments under
Medicare.
42 CFR Part 493
Administrative practice and
procedure, Grant programs—health,
Health facilities, Laboratories, Medicaid,
Medicare, Penalties, Reporting and
recordkeeping requirements.
For the reasons set forth in the
preamble, the Centers for Medicare &
Medicaid Services proposes to amend
42 CFR parts 405, 491, and 493 as set
forth below:
§ 405.2400
Year
dollar
Sfmt 4702
supplementary medical insurance
services. Section 1861(aa)—Rural health
clinic services and Federally qualified
health center services covered by the
Medicare program. Section1834(o)—
Federally qualified health center
prospective payment system beginning
October 1, 2014.
■ 3. In § 405.2401, paragraph (b) is
amended as follows:
■ A. Removing the definition of ‘‘Act’’.
■ B. Revising the definition of
‘‘Allowable costs’’.
■ C. Removing the definition of
‘‘Carrier’’.
■ D. Adding the definitions of ‘‘Certified
nurse midwife (CNM),’’ ‘‘Clinical
psychologist (CP)’’, and ‘‘Clinical social
worker (CSW)’’.
■ E. Revising the definitions of
‘‘Coinsurance’’ and ‘‘Deductible’’.
■ F. Adding the definition of
‘‘Employee’’ and ‘‘HRSA.
■ G. Revising paragraphs (1) through (3)
of the definition of ‘‘Federally qualified
health center’’.
■ H. Removing the definition of
‘‘Intermittent nursing care’’.
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I. Adding the definition of ‘‘Medicare
Administrative Contractor (MAC)’’.
■ J. Removing the definitions of ‘‘Nursemidwife’’, ‘‘Nurse practitioner and
physician assistant’’, and Part-time
nursing care’’.
■ K. Adding the definitions of
‘‘Physician assistant (PA)’’ and
‘‘Prospective payment system (PPS)’’.
■ L. Revising the definitions of
‘‘Reporting period’’ and ‘‘Rural health
clinic’’.
■ M. In the definition of ‘‘Visiting nurse
services,’’ removing the phrase
‘‘registered nurse’’ and adding in its
place the phrase ‘‘registered
professional nurse’’.
The revisions and additions read as
follows:
■
§ 405.2401
Scope and definitions.
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*
*
*
*
*
(b) * * *
Allowable costs means costs that are
incurred by a RHC or FQHC that is
authorized to bill based on reasonable
costs and are reasonable in amount and
proper and necessary for the efficient
delivery of RHC and FQHC services.
*
*
*
*
*
Certified nurse midwife (CNM) means
an individual who meets the applicable
education, training experience and other
requirements of § 410.77(a) of this
chapter.
Clinical psychologist (CP) means an
individual who meet the applicable
education, training experience and other
requirements of § 410.71(d) of this
chapter.
Clinical social worker (CSW) means
an individual who meet the applicable
education, training experience and other
requirements of § 410.73(a) of this
chapter.
*
*
*
*
*
Coinsurance means that portion of the
RHC’s charge for covered services or
that portion of the FQHC’s charge or
PPS rate for covered services for which
the beneficiary is liable (in addition to
the deductible, where applicable).
*
*
*
*
*
Deductible means the amount
incurred by the beneficiary during a
calendar year as specified in § 410.160
and § 410.161 of this chapter.
Employee means any individual who,
under the common law rules that apply
in determining the employer-employee
relationship (as applied for purposes of
section 3121(d)(2) of the Internal
Revenue Code of 1986), is considered to
be employed by, or an employee of, an
entity. (Application of these common
law rules is discussed in 20 CFR
404.1007 and 26 CFR 31.3121(d)–1(c).)
Federally qualified health center
(FQHC) * * *
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(1) Is receiving a grant under section
330 of the Public Health Service (PHS)
Act, or is receiving funding from such
a grant under a contract with a recipient
of such a grant and meets the
requirements to receive a grant under
section 330 of the PHS Act;
(2) Is determined by the HRSA to
meet the requirements for receiving
such a grant;
(3) Was treated by CMS, for purposes
of part B, as a comprehensive federally
funded health center as of January 1,
1990; or
*
*
*
*
*
HRSA means the Health Resources
and Services Administration.
*
*
*
*
*
Medicare Administrative Contractor
(MAC) means an organization that has a
contract with the Secretary to
administer the benefits covered by this
subpart.
Nurse practitioner (NP) means
individuals who meet the applicable
education, training experience and other
requirements of § 410.75(b) of this
chapter.
*
*
*
*
*
Physician assistant (PA) means an
individual who meet the applicable
education, training experience and other
requirements of § 410.74(c) of this
chapter.
Prospective payment system (PPS)
means a method of payment in which
Medicare payment is made based on a
predetermined, fixed amount.
Reporting period generally means a
period of 12 consecutive months
specified by the MAC as the period for
which a RHC or FQHC must report
required costs and utilization
information. The first and last reporting
periods may be less than 12 months.
Rural health clinic means a facility
that has—
(1) Been determined by the Secretary
to meet the requirements of section
1861(aa)(2) of the Act and part 491 of
this chapter concerning RHC services
and conditions for approval; and
(2) Filed an agreement with CMS that
meets the requirements in § 405.2402 to
provide RHC services under Medicare.
*
*
*
*
*
■ 4. Section 405.2402 is amended as
follows:
■ A. Revising the section heading.
■ B. Revising paragraphs (b)
introductory text and (c) introductory
text.
■ C. Revising paragraph (d).
■ D. Removing paragraph (e).
■ E. Redesignating paragraph (f) as
paragraph (e).
■ F. Revising newly redesignated
paragraph (e).
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58407
The revisions read as follows:
§ 405.2402 Rural health clinic basic
requirements.
*
*
*
*
*
(b) Acceptance of the clinic as
qualified to furnish RHC services. If the
Secretary, after reviewing the survey
agency or accrediting organization
recommendation, as applicable, and
other evidence relating to the
qualifications of the clinic, determines
that the clinic meets the requirements of
this subpart and of part 491 of this
chapter, the clinic is provided with—
*
*
*
*
*
(c) Filing of agreement by the clinic.
If the clinic wishes to participate in the
program, it must—
*
*
*
*
*
(d) Acceptance by the Secretary. If the
Secretary accepts the agreement filed by
the clinic, the Secretary returns to the
clinic one copy of the agreement with a
notice of acceptance specifying the
effective date.
(e) Appeal rights. If CMS declines to
enter into an agreement or if CMS
terminates an agreement, the clinic is
entitled to a hearing in accordance with
§ 498.3(b)(5) and (6) of this chapter.
■ 5. Section 405.2403 is amended as
follows:
■ A. Revising the section heading.
■ B. Amending paragraphs (a)
introductory text and (a)(2) by removing
the term ‘‘rural health clinic’’ and by
adding in its place the term ‘‘RHC’’.
■ C. Amending paragraph (a)(3)(ii)(B) by
removing the term ‘‘rural health
clinic’s’’ and adding in its place the
term ‘‘RHC’s’’.
■ D. Amending paragraphs (a)(1), (a)(2)
introductory text, (a)(3)(i), and (a)(4)(i)
and (ii) by removing the term ‘‘clinic’’
and adding in its place the term ‘‘RHC’’.
The revision reads as follows:
§ 405.2403 Rural health clinic content and
terms of the agreement with the Secretary.
*
*
*
*
*
6. Section 405.2404 is amended as
follows:
■ A. Revising the section heading.
■ B. Amending paragraphs (a)
introductory text, (b)(1) introductory
text, (b)(2), (b)(3), (c), (e) introductory
text, by removing the term ‘‘rural health
clinic’’ each time it appears and by
adding in its place the term ‘‘RHC’’.
■ C. Amending paragraph (a)(1),
(a)(2)(i), (a)(2)(ii)(A), (a)(3), and (d)(1) by
removing the term ‘‘clinic’’ each time it
appears and adding in its place the term
‘‘RHC’’.
■ D. Amending paragraph (a)(2)(i) by
removing the term ‘‘clinic’s’’ and adding
in its place the term ‘‘RHC’s’’.
■ E. In paragraph (a)(2)(ii) introductory
text, removing the phrase ‘‘if he
■
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The revisions and addition read as
follows:
determines’’ and adding place ‘‘if the
Secretary determines’’.
■ F. In paragraph (a)(3), removing the
phrase ‘‘that shall be deemed’’ and
adding in its place the phrase ‘‘The
Secretary deems it’’.
■ G. In paragraph (b)(2), removing the
phrase ‘‘The Secretary will give’’ and
adding in its place the phrase ‘‘The
Secretary gives’’.
The revisions read as follows:
§ 405.2411
§ 405.2404 Termination of rural health
clinic agreements.
*
*
*
§ 405.2410
*
*
[Amended]
7. Section 405.2410 is amended as
follows:
■ A. In paragraph (a)(1), removing the
term ‘‘rural health clinic’’ and adding in
its place the term ‘‘RHC’’.
■ B. In paragraph (a)(2), removing the
term ‘‘Federally qualified health center’’
and adding in its place the term
‘‘FQHC’’.
■ C. Revising paragraph (b).
The revision reads as follows:
■
§ 405.2410 Application of Part B
deductible and coinsurance.
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*
*
*
*
*
(b) Application of coinsurance. The
beneficiary’s responsibility is based on
either of the following:
(1) For RHCs and FQHCs that are not
being paid in accordance with section
1834(o) of the Act —
(i) A coinsurance amount that does
not exceed 20 percent of the RHC’s or
FQHC’s reasonable customary charge for
the covered service; and
(ii)(A) For any one item or service
furnished by the RHC, a deductible and
coinsurance liability that does not
exceed twenty percent of a reasonable
customary charge by the RHC for that
particular item or service; or
(ii) For any one item or service
furnished by a FQHC, a coinsurance
liability that does not exceed 20 percent
of a reasonable customary charge by the
FQHC for that particular item or service.
(2) For FQHCs authorized to bill
under the PPS, a coinsurance amount
which is 20 percent of the lesser of—
(i) The FQHC’s charge; or
(ii) The PPS rate for the covered
service.
■ 8. Section 405.2411 is amended as
follows:
■ A. Revising paragraph (a) introductory
text.
■ B. In paragraphs (a)(1) through (a)(3),
removing ‘‘;’’ and adding in its place
‘‘.’’.
■ C. Revising paragraphs (a)(4) and (5).
■ D. Adding a new paragraph (a)(6).
■ E. Revising paragraph (b).
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Scope of benefits.
(a) The following RHC services are
reimbursable under this subpart:
*
*
*
*
*
(4) Services and supplies furnished as
incident to a nurse practitioner,
physician assistant, certified nurse
midwife, clinical psychologist, or
clinical social worker service.
(5) Visiting nurse services when
provided in accordance with 1861(aa)(1)
of the Act and § 405.2416.
(6) Clinical psychologists and clinical
social worker services as specified in
§ 405.2450.
(b) Rural health clinic services are—
(1) Covered when furnished in a RHC
setting or other outpatient setting,
including a patient’s place of residence;
(2) Covered when furnished during a
Part A stay in a skilled nursing facility
only when provided by a physician,
nurse practitioner, physician assistant,
certified nurse midwife or clinical
psychologist employed or under
contract with the RHC at the time the
services are furnished; and
(3) Not covered in a hospital as
defined in section 1861(e) of the Act; or
critical access hospital as defined in
1861(mm)(1) of the Act).
■ 9. Section 405.2412 is revised to read
as follows:
§ 405.2412
Physicians’ services.
Physicians’ services are professional
services that are furnished by either of
the following:
(a) By a physician at the RHC or
FQHC.
(b) Away from the RHC or FQHC by
a physician whose agreement with the
RHC or FQHC provides that he or she
will be paid by the RHC or FQHC for
such services and certification and cost
reporting requirements are met.
§ 405.2413
[Amended]
10. Section 405.2413 is amended as
follows:
■ A. Amending paragraphs (a)(2) and
(a)(5) by removing the term ‘‘clinic’s’’
and by adding in its place the term
‘‘RHC’s’’.
■ B. Amending paragraph (a)(5) by
removing the term ‘‘clinic’’ and by
adding in its place the term ‘‘RHC’’.
■ 11. Section 405.2414 is amended as
follows:
■ A. Revising paragraphs (a)
introductory text and (a)(1).
■ B. In paragraphs (a)(2) and (3),
removing ‘‘;’’ and adding in its place
‘‘.’’.
■ C. Revising paragraph (a)(4).
■
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D. In paragraph (a)(5), removing the
phrase ‘‘They would’’ and adding in its
place the phrase ‘‘The services would’’.
■ E. In paragraph (c), removing the
phrase ‘‘physician assistants, nurse
midwives or specialized nurse
practitioners’’ and adding in its place
the phrase ‘‘physician assistants or
certified nurse midwives’’.
The revisions read as follows:
■
§ 405.2414 Nurse practitioner, physician
assistant, and certified nurse midwife
services.
(a) Professional services are payable
under this subpart if the services meet
all of the following:
(1) Furnished by a nurse practitioner,
physician assistant, or certified nurse
midwife who is employed by, or
receives compensation from, the RHC or
FQHC.
*
*
*
*
*
(4) The services are of a type which
the nurse practitioner, physician
assistant, or certified nurse midwife
who furnished the service is legally
permitted to perform by the State in
which the service is rendered.
■ 12. Section 405.2415 is revised to read
as follows:
§ 405.2415 Services and supplies incident
to nurse practitioner, physician assistant,
certified nurse midwife, clinical
psychologist, or clinical social worker
services.
(a) Services and supplies incident to
a nurse practitioner, physician assistant,
certified nurse midwife, clinical
psychologist, or clinical social worker
service are payable under this subpart if
the service or supply is all of the
following:
(1) Of a type commonly furnished in
physicians’ offices.
(2) Of a type commonly rendered
either without charge or included in the
RHC’s bill.
(3) Furnished as an incidental,
although integral part of professional
services furnished by a nurse
practitioner, physician assistant,
certified nurse midwife, clinical
psychologist, or clinical social worker.
(4) Furnished under the direct,
personal supervision of a physician,
nurse practitioner, physician assistant,
certified nurse midwife, clinical
psychologist, or clinical social worker.
(5) In the case of a service, furnished
by a member of the RHC’s health care
staff who is an employee of the RHC.
(b) The direct personal supervision
requirement is met in the case of any of
the following persons only if the person
is permitted to supervise these services
under the written policies governing the
RHC:
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(1) Nurse practitioner.
(2) Physician assistant.
(3) Certified nurse midwife.
(4) Clinical psychologist.
(5) Clinical social worker.
(c) Only drugs and biologicals which
cannot be self-administered are
included within the scope of this
benefit.
■ 13. Section 405.2416 is amended as
follows:
■ A. Revising paragraphs (a)
introductory text and (a)(1).
■ B. In paragraph (a)(2), removing the
semicolon and adding a period in its
place.
■ C. Revising paragraphs (a)(3) and (4).
■ D. Revising paragraphs (b)
introductory text and (b)(1).
The revisions read as follows:
§ 405.2416
Visiting nurse services.
(a) Visiting nurse services are covered
if the services meet all of the following:
(1) The RHC or FQHC is located in an
area in which the Secretary has
determined that there is a shortage of
home health agencies.
*
*
*
*
*
(3) The services are furnished by a
registered professional nurse or licensed
practical nurse that is employed by, or
receives compensation for the services
from the RHC or FQHC.
(4) The services are furnished under
a written plan of treatment that is both
of the following:
(i)(A) Established and reviewed at
least every 60 days by a supervising
physician of the RHC or FQHC; or
(B) Established by a nurse
practitioner, physician assistant, or
certified nurse midwife and reviewed at
least every 60 days by a supervising
physician.
(ii) Signed by the supervising
physician, nurse practitioner, physician
assistant or certified nurse midwife of
the RHC or FQHC.
(b) The nursing care covered by this
section includes the following:
(1) Services that must be performed
by a registered professional nurse or
licensed practical nurse if the safety of
the patient is to be assured and the
medically desired results achieved.
*
*
*
*
*
§ 405.2417
[Amended]
14. Section 405.2417 is amended as
follows:
■ A. In the introductory text, removing
the phrase ‘‘rural health clinic’’ and
adding in its place ‘‘RHC or FQHC’’.
■ B. In paragraph (a), removing the
phrase ‘‘rural health clinic’’ and adding
in its place ‘‘RHC or FQHC’’.
■ C. In paragraph (b), removing ‘‘; or’’
and adding in its place ‘‘.’’.
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■
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15. Section 405.2430 is amended as
follows:
■ A. Revising paragraphs (a)(1)
introductory text and (a)(1)(i) and (ii).
■ B. In paragraph (a)(4), removing the
phrase ‘‘Federally qualified health
center’’ and adding in its place the term
‘‘FQHC’’.
■ C. Revising paragraph (b).
■ D. Removing paragraph (c).
■ E. Redesignating paragraph (d) as
paragraph (c).
The revisions read as follows:
The revisions read as follows:
■
§ 405.2430
Basic requirements.
(a) * * *
(1) In response to a request from an
entity that wishes to participate in the
Medicare program, CMS enters into an
agreement with an entity when all of the
following occur:
(i) HRSA approves the entity as
meeting the requirements of section 330
of the PHS Act.
(ii) The entity assures CMS that it
meets the requirements specified in this
subpart and part 491, as described in
§ 405.2434(a).
*
*
*
*
*
(b) Prior HRSA FQHC determination.
An entity applying to become a FQHC
must do the following:
(1) Be determined by HRSA as
meeting the applicable requirements of
the PHS Act, as specified in
§ 405.2401(b).
(2) Receive approval by HRSA as a
FQHC under section 330 of the PHS Act
(42 U.S.C. 254b).
*
*
*
*
*
■ 16. Section 405.2434 is amended as
follows:
■ A. In the introductory text, removing
the phrase ‘‘Federally qualified health
center’’ and adding in its place the term
‘‘FQHC’’.
■ B. In paragraph (a)(1), removing the
phrase ‘‘Federally qualified health
center’’ and adding in its place the term
‘‘FQHC’’ each time it appears.
■ C. In paragraph (a)(2), removing the
term ‘‘Centers’’ and adding in its place
the term ‘‘FQHCs’’.
■ D. Revising paragraphs (b) and (c)(1).
■ E. In paragraph (c)(3), removing the
phrase ‘‘Federally qualified health
center’’ and adding in its place the term
‘‘FQHC’’ each time it appears.
■ F. Revising paragraph (c)(4).
■ G. In paragraphs (d)(1), (d)(3)
introductory text, and (e)(1) through (3)
by removing the phrase ‘‘Federally
qualified health center’’ and adding in
its place the term ‘‘FQHC’’.
■ H. In paragraphs (d)(3)(ii) and (e)(2) by
removing the phrase ‘‘Federally
qualified health center’s’’ and adding in
its place the term ‘‘FQHC’s’’ .
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58409
§ 405.2434 Content and terms of the
agreement.
*
*
*
*
*
(b) Effective date of agreement. The
effective date of the agreement is
determined in accordance with the
provisions of § 489.13.
(c) * * *
(1) For non-FQHC services that are
billed to Part B, the beneficiary is
responsible for payment of a
coinsurance amount which is 20 percent
of the amount of Part B payment made
to the center for the covered services.
*
*
*
*
*
(4) The FQHC may charge the
beneficiary for items and services that
are not FQHC services. If the item or
service is covered under Medicare Part
B, the FQHC may not charge the
beneficiary more than 20 percent of the
Part B payment amount.
*
*
*
*
*
§ 405.2436
[Amended]
17. Section 405.2436 is amended as
follows:
■ A. In paragraphs (a) introductory text,
(a)(2), (b)(1)(i), (b)(3), (c)(1) introductory
text, (c)(2), (c)(3), and (d) by removing
the phrase ‘‘Federally qualified health
center’’ each time it appears and adding
in its place the term ‘‘FQHC’’.
■ B. In paragraphs (b)(1) introductory
text, (b)(1)(ii), (b)(2) introductory text,
and (d) by removing the phrase
‘‘Federally qualified health center’s’’
and adding in its place the term
‘‘FQHC’s’’.
■ 18. Section 405.2440 is amended by
revising the introductory text to read as
follows.
■
§ 405.2440 Conditions for reinstatement
after termination by CMS.
When CMS has terminated an
agreement with a FQHC, CMS does not
enter into another agreement with the
FQHC to participate in the Medicare
program unless CMS—
*
*
*
*
*
§ 405.2442
[Amended]
19. Section 405.2442 is amended as
follows:
■ A. In paragraph (a) introductory text
by removing the phrase ‘‘Federally
qualified health center’’ and adding in
its place the term ‘‘FQHC’’.
■ B. In paragraph (b) by removing the
phrase ‘‘Federally qualified health
center’s’’ and adding in its place the
term ‘‘FQHC’s’’.
■
§ 405.2444
[Amended]
20. Section 405.2444 is amended as
follows:
■
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A. In paragraph (c), removing the
phrase ‘‘Federally qualified health
center’’ and adding in its place the term
‘‘FQHC’’ each time it appears.
■ B. In paragraphs (a)(2) and (c) by
removing the term ‘‘center’’ each time it
appears, and by adding in its place the
term ‘‘FQHC’’ .
■ 21. Section 405.2446 is amended as
follows:
■ A. Revising paragraphs (a), (b)(2), (3),
(4), and (6).
■ B. Removing paragraph (b)(8).
■ C. Redesignating paragraphs (b)(9) and
(10) as (b)(8) and (9), respectively.
■ D. In paragraphs (c) and (d), removing
the phrase ‘‘Federally quality health
center’’ and adding in its place the term
‘‘FQHC’’.
The revisions read as follows:
■
sroberts on DSK5SPTVN1PROD with PROPOSALS
§ 405.2446
Scope of services.
(a) For purposes of this section, the
terms rural health clinic and RHC when
they appear in the cross references in
paragraph (b) of this section also mean
Federally qualified health centers and
FQHCs.
(b) * * *
(2) Services and supplies furnished as
incident to a physician’s professional
service, as specified in § 405.2413.
(3) Nurse practitioner, physician
assistant or certified nurse midwife
services as specified in § 405.2414.
(4) Services and supplies furnished as
incident to a nurse practitioner,
physician assistant, or certified nurse
midwife service, as specified in
§ 405.2415.
*
*
*
*
*
(6) Services and supplies furnished as
incident to a clinical psychologist or
clinical social worker service, as
specified in § 405.2452.
*
*
*
*
*
■ 22. Section 405.2448 is amended as
follows:
■ A. Revising paragraphs (a)
introductory text and (a)(1) through (3).
■ B. In paragraph (b) introductory text,
removing the phrase ‘‘Federally quality
health centers’’ and adding in its place
the term ‘‘FQHCs’’.
■ C. In paragraph (d), removing the
phrase ‘‘a Federally qualified health
center service, but may be provided at
a Federally qualified health center if the
center’’ and adding in its place the
phrase ‘‘FQHC service, but may be
provided at a FQHC if the FQHC’’.
The revisions read as follows:
§ 405.2448
Preventive primary services.
(a) Preventive primary services are
those health services:
(1) A FQHC is required to provide as
preventive primary health services
under section 330 of the PHS Act.
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(2) Furnished by or under the direct
supervision of a physician, nurse
practitioner, physician assistant,
certified nurse midwife, clinical
psychologist or clinical social worker.
(3) In the case of a service, furnished
by a member of the FQHC’s health care
staff who is an employee of the FQHC
or by a physician under arrangements
with the FQHC.
*
*
*
*
*
§ 405.2449
[Amended]
23. Section 405.2449 is amended as
follows:
■ A. In the introductory text, removing
the phrase ‘‘Federally qualified health
center’’ and adding in its place the term
‘‘FQHC’’.
■ B. In paragraph (b), removing ‘‘; and’’
and adding in its place ‘‘.’’.
■
§ 405.2452
[Amended]
24. Section 405.2452 is amended as
follows:
■ A. In paragraph (a)(2), by removing
the phrase ‘‘Federally quality health
center’s’’ and adding in its place the
term ‘‘FQHC’s’’.
■ B. In paragraph (b), by removing the
phrase ‘‘Federally quality health center’’
and adding in its place the term
‘‘FQHC’’.
■ C. In paragraph (a)(5), removing the
term ‘‘center’’ and adding in its place
the term ‘‘FQHC’’.
■ 25. Section 405.2460 is revised to read
as follows:
■
§ 405.2460 Applicability of general
payment exclusions.
The payment conditions, limitations,
and exclusions set out in subpart C of
this part, part 410 and part 411 of this
chapter are applicable to payment for
services provided by RHCs and FQHCs,
except that preventive primary services,
as defined in § 405.2448, are statutorily
authorized in FQHCs and not excluded
by the provisions of section 1862(a) of
the Act.
■ 26. Section 405.2462 is revised to read
as follows:
§ 405.2462
services.
Payment for RHC and FQHC
(a) Payment to provider-based RHCs
and FQHCs that are authorized to bill
under the reasonable cost system. A
RHC or FQHC that is authorized to bill
under the reasonable cost system is paid
in accordance with parts 405 and 413 of
this subchapter, as applicable, if the
RHC or FQHC is—
(1) An integral and subordinate part of
a hospital, skilled nursing facility or
home health agency participating in
Medicare (that is, a provider of
services); and
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(2) Operated with other departments
of the provider under common
licensure, governance and professional
supervision.
(b) Payment to independent RHCs and
freestanding FQHCs that are authorized
to bill under the reasonable cost system.
(1) RHCs and FQHCs that are authorized
to bill under the reasonable cost system
are paid on the basis of an all-inclusive
rate for each beneficiary visit for
covered services. This rate is
determined by the MAC, in accordance
with this subpart and general
instructions issued by CMS.
(2) The amount payable by the MAC
for a visit is determined in accordance
with paragraphs (e)(1) and (2) of this
section.
(c) Payment to FQHCs that are
authorized to bill under the prospective
payment system. A FQHC that is
authorized to bill under the prospective
payment system is paid a single, per
diem rate based on the prospectively set
rate for each beneficiary visit for
covered services. This rate is adjusted
for the following:
(1) Geographic differences in cost
based on the Geographic Practice Cost
Indices (GPCIs) in accordance with
1848(e) of the Act and 42 CFR 414.2 and
414.26 and used to adjust payment
under the physician fee schedule,
limited to only the work and practice
expense GPCIs.
(2) Furnishing of care to a new patient
with respect to the FQHC, including all
sites that are part of the FQHC, or to a
beneficiary receiving a comprehensive
initial Medicare visit (that is an initial
preventive physical examination or an
initial annual wellness visit). A new
patient is one that has not been seen in
the FQHC’s organization within the
previous 3 years.
(d) For FQHC visits, Medicare pays 80
percent of the all-inclusive rate for
FQHCs that are authorized to bill under
the reasonable cost system, and 80
percent of the lesser of the FQHC’s
charge or the PPS encounter rate for
FQHCs authorized to bill under the PPS.
No deductible is applicable to FQHC
services.
(e) For RHCs visits, payment is made
in accordance with one of the following:
(1) If the deductible has been fully
met by the beneficiary prior to the RHC,
Medicare pays 80 percent of the allinclusive rate.
(2) If the deductible has not been fully
met by the beneficiary before the visit,
and the amount of the RHC’s reasonable
customary charge for the services that is
applied to the deductible is less than the
all-inclusive rate, the amount applied to
the deductible is subtracted from the all-
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inclusive rate and 80 percent of the
remainder, if any, is paid to the RHC.
(3) If the deductible has not been fully
met by the beneficiary before the visit,
and the amount of the RHC’s reasonable
customary charge for the services that is
applied to the deductible is equal to or
exceeds the all-inclusive rate, no
payment is made to the RHC.
(f) To receive payment, the FQHC or
RHC must do all of the following:
(1) Furnish services in accordance
with the requirements of subpart X of
part 405 of this chapter and subpart A
of part 491 of this chapter.
(2) File a request for payment on the
form and manner prescribed by CMS.
27. Section 405.2463 is revised to read
as follows:
sroberts on DSK5SPTVN1PROD with PROPOSALS
§ 405.2463
What constitutes a visit.
(a) Visit. (1) General. (i) For RHCs, a
visit is a face-to-face encounter between
a RHC patient and one of the following:
(A) Physician.
(B) Physician assistant.
(C) Nurse practitioner.
(D) Certified nurse midwife.
(E) Visiting registered professional or
licensed practical nurse.
(G) Clinical psychologist.
(H) Clinical social worker.
(I) Qualified transitional care
management service.
(ii) For FQHCs, a visit is either of the
following:
(A) A face-to-face encounter as
described in paragraph (a)(1)(i) of this
section.
(B) A face-to-face encounter between
a patient and one of the following:
(1) A qualified provider of medical
nutrition therapy services as defined in
part 410 subpart G of this chapter.
(2) A qualified provider of outpatient
diabetes self-management training
services as defined in part 410 subpart
H of this chapter.
(2) Medical visit. (i) A medical visit is
a face-to-face encounter between a RHC
or FQHC patient and one of the
following:
(A) Physician.
(B) Physician assistant.
(C) Nurse practitioner.
(D) Certified nurse midwife.
(E) Visiting registered professional or
licensed practical nurse.
(i) A medical visit for FQHCs may
also include a—
(A) Medical nutrition therapy visit; or
(B) Diabetes outpatient selfmanagement training visit.
(3) Mental health visit. A mental
health visit is a face-to-face encounter
between a RHC or FQHC patient and
one of the following:
(i) Clinical psychologist.
(ii) Clinical social worker.
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(iii) Other RHC or FQHC practitioner
for mental health services.
(b) Encounters and Payment for RHCs
and FQHCs that are not being paid
under section 1834(o) of the Act. (1) For
RHCs and FQHCs that are authorized to
bill under the reasonable cost system,
encounters with more than one health
professional and multiple encounters
with the same health professional that
take place on the same day and at a
single location constitute a single visit,
except when one of the following
conditions exist:
(i) The patient, subsequent to the first
visit, suffers an illness or injury that
requires additional diagnosis or
treatment on the same day.
(ii) The patient has a medical visit
and a mental health visit on the same
day.
(iii) The patient has an initial
preventive physical exam visit and a
separate medical or mental health visit
on the same day.
(2) For RHCs and FQHCs that are
authorized to bill under the reasonable
cost system. Medicare pays RHCs and
FQHCs that are not being paid under
section 1834(o) of the Act for more than
1 visit per day when the conditions in
paragraph (b) of this section are met.
■ 28. Section 405.2464 is revised to read
as follows:
§ 405.2464
Payment rate.
(a) Determination of the payment rate
for RHCs and FQHCs that are
authorized to bill on the basis of
reasonable cost. (1) An all-inclusive rate
is determined by the MAC at the
beginning of the cost reporting period.
(2) The rate is determined by dividing
the estimated total allowable costs by
estimated total visits for RHC or FQHC
services.
(3) The rate determination is subject
to any tests of reasonableness that may
be established in accordance with this
subpart.
(4) The MAC, during each reporting
period, periodically reviews the rate to
assure that payments approximate
actual allowable costs and visits and
adjusts the rate if:
(i) There is a significant change in the
utilization of services;
(ii) Actual allowable costs vary
materially from allowable costs; or
(iii) Other circumstances arise which
warrant an adjustment.
(5) The RHC or FQHC may request the
MAC to review the rate to determine
whether adjustment is required.
(b) Determination of the payment rate
for FQHCs billing under the prospective
payment system. (1) An encounterbased rate is calculated by CMS by
dividing total FQHC costs by total
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FQHC encounters to establish an
average cost per encounter.
(2) The exceptions in § 405.2463(b) do
not apply.
(3) The encounter-based rate is
adjusted—
(i) For geographic differences in the
cost of inputs according to
§ 405.2462(c)(1).
(ii) When the FQHC furnishes services
to a new patient, as defined in
§ 405.2462(b)(3)(ii).
(iii) When a beneficiary receives a
comprehensive initial Medicare visit
(that is, an initial preventive physical
examination or an initial annual
wellness visit).
■ 29. Section 405.2466 is amended as
follows:
■ A. By revising paragraph (a) and the
paragraph (b) heading.
■ B. In paragraph (b)(1) introductory
text by removing the term
‘‘intermediary’’ each time it appears and
by adding in its place the term ‘‘MAC’’.
■ C. In paragraphs (b)(1)(i), and (b)(1)(ii)
by removing the term ‘‘rural health
clinic’’ each time it appears and by
adding in its place the term ‘‘RHC’’.
■ D. Revising paragraph (b)(1)(iii).
■ E. In paragraph (b)(1)(iv) by removing
the term ‘‘rural health clinics’’ and by
adding in its place the term ‘‘RHCs’’.
■ F. In paragraphs (b)(1)(i), and (b)(1)(ii)
by removing the term ‘‘Federally
qualified health center’’ and by adding
in its place the term ‘‘FQHC’’.
■ G. In paragraphs (b)(1) introductory
text, (b)(2), (c)(1), and (c)(2) by removing
the word ‘‘clinic’’ each time it appears
and by adding in its place the term
‘‘RHC’’.
■ H. In paragraphs (b)(1) introductory
text, (b)(2), (c)(1), (c)(2), and (d)(2) by
removing the word ‘‘center’’ each time
it appears and by adding in its place the
term ‘‘FQHC’’.
■ I. Revising paragraphs (c) introductory
text, and (d)(1).
■ J. In paragraph (d)(2) by removing the
term ‘‘intermediary’’ each time it
appears and by adding in its place the
term ‘‘MAC’’.
The revisions read as follows:
§ 405.2466
Annual reconciliation.
(a) General. Payments made to RHCs
or FQHCs that are authorized to bill
under the reasonable cost system during
a reporting period are subject to annual
reconciliation to assure that those
payments do not exceed or fall short of
the allowable costs attributable to
covered services furnished to Medicare
beneficiaries during that period.
(b) Calculation of reconciliation for
RHCs or FQHCs that are authorized to
bill under the reasonable cost system.
(1) * * *
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(iii) The total payment due the RHC
is 80 percent of the amount calculated
by subtracting the amount of deductible
incurred by beneficiaries that is
attributable to RHC services from the
cost of these services. FQHC services are
not subject to a deductible and the
payment computation for FQHCs does
not include a reduction related to the
deductible.
*
*
*
*
*
(c) Notice of program reimbursement.
The MAC notifies the RHC or FQHC that
is authorized to bill under the
reasonable costs system:
*
*
*
*
*
(d) * * *
(1) Underpayments. If the total
reimbursement due the RHC or FQHC
that is authorized to bill under the
reasonable cost system exceeds the
payments made for the reporting period,
the MAC makes a lump-sum payment to
the RHC or FQHC to bring total
payments into agreement with total
reimbursement due the RHC or FQHC.
*
*
*
*
*
■ 30. Add § 405.2467 to read as follows:
sroberts on DSK5SPTVN1PROD with PROPOSALS
§ 405.2467
PPS.
Requirements of the FQHC
(a) Cost reporting. For cost reporting
periods beginning on or after October 1,
2014, FQHCs are paid on a PPS basis
that does all of the following:
(1) Includes a process for
appropriately describing the services
furnished by FQHCs.
(2) Establishes payment rates for
specific payment codes based on such
appropriate descriptions of services.
(3) Takes into account the type,
intensity and duration of services
furnished by FQHCs.
(4) May include adjustments (such as
geographic adjustments) determined by
the Secretary.
(b) HCPCS coding. FQHCs are
required to submit HCPCS codes in
reporting services furnished.
(c) Initial payments. (1) Beginning
October 1, 2014, for the first fifteen
months of the PPS, the estimated
aggregate amount of PPS rates is equal
to 100 percent of the estimated amount
of reasonable costs that would have
occurred for that period if the PPS had
not been implemented.
(2) Payment amount is calculated
prior to any FQHC payments based on
the reasonable cost system.
(d) Payments in subsequent years. (1)
Beginning January 1, 2016, PPS
payment rates will be increased by the
percentage increase in the Medicare
economic index.
(2) Beginning January 1, 2017, PPS
rates will be increased by the percentage
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increase in a market basket of FQHC
goods and services as established
through regulations, or, if not available,
the Medicare economic index.
■ 31. Section 405.2468 is amended:
■ A. In paragraph (a) by removing the
word ‘‘intermediary’’, and by adding in
its place the word ‘‘MAC’’.
■ B. In paragraphs (b) introductory text
and (c) by removing the term ‘‘rural
health clinic’’ and by adding in its place
the term ‘‘RHC’’.
■ C. In paragraph (b) introductory text
by removing the term ‘‘Federally
qualified health center’’ and by adding
in its place the term ‘‘FQHC’’.
■ D. In paragraphs (b)(4), (b)(5),
(d)(2)(iv), and (d)(2)(v) by removing the
word ‘‘clinic’’ each time it appears and
by adding in its place the term ‘‘RHC’’.
■ E. In paragraphs (b)(4), (b)(5),
(d)(2)(iv), (d)(2)(v) by removing the
word ‘‘center’’ each time it appears and
by adding in its place the term ‘‘FQHC’’.
■ F. Revising paragraphs (b)(1), (c), and
(d)(1).
The revisions read as follows:
§ 405.2468
Allowable costs.
*
*
*
*
*
(b) * * *
(1) Compensation for the services of a
physician, physician assistant, nurse
practitioner, certified nurse-midwife,
visiting registered professional or
licensed practical nurse, clinical
psychologist, and clinical social worker
who owns, is employed by, or furnishes
services under contract to a FQHC or
RHC.
*
*
*
*
*
(c) Tests of reasonableness of cost and
utilization. Tests of reasonableness
authorized by sections 1833(a) and
1861(v)(1)(A) of the Act may be
established by CMS or the MAC with
respect to direct or indirect overall
costs, costs of specific items and
services, or costs of groups of items and
services. For RHCs and FQHCs that are
authorized to bill under the reasonable
cost system, these tests include, but are
not limited to, screening guidelines and
payment limits.
(d) Screening guidelines. (1) Costs in
excess of amounts established by the
guidelines are not included unless the
RHC or FQHC that is authorized to bill
under the reasonable cost system
provides reasonable justification
satisfactory to the MAC.
*
*
*
*
*
■ 32. Section 405.2469 is revised by to
read as follows:
§ 405.2469 Federally qualified health
centers (FQHCs) supplemental payments.
(a) Eligibility for supplemental
payments. FQHCs under contract
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(directly or indirectly) with MA
organizations are eligible for
supplemental payments for FQHC
services furnished to enrollees in MA
plans offered by the MA organization to
cover the difference, if any, between
their payments from the MA plan and
what they would receive either:
(1) Under the reasonable cost payment
system if the FQHC is authorized to bill
under the reasonable cost payment
system, or
(2) The PPS rate if the FQHC is
authorized to bill under the PPS.
(b) Calculation of supplemental
payment. The supplemental payment
for FQHC covered services provided to
Medicare patients enrolled in MA plans
is based on the difference between—
(1) Payments received by the FQHC
from the MA plan as determined on a
per visit basis and the FQHCs allinclusive cost-based per visit rate as set
forth in this subpart, less any amount
the FQHC may charge as described in
section 1857(e)(3)(B) of the Act, or.
(2) Payments received by the FQHC
from the MA plan as determined on a
per visit basis and the FQHC PPS rate
as set forth in this subpart, less any
amount the FQHC may charge as
described in section 1857(e)(3)(B) of the
Act.
(c) Financial incentives. Any financial
incentives provided to FQHCs under
their MA contracts, such as risk pool
payments, bonuses, or withholds, are
prohibited from being included in the
calculation of supplemental payments
due to the FQHC.
(d) Per visit supplemental payment. A
supplemental payment required under
this section is made to the FQHC when
a covered face-to-face encounter occurs
between a MA enrollee and a
practitioner as set forth in § 405.2463.
§ 405.2470
[Amended]
33. Section 405.2470 is amended by:
A. In paragraphs (a)(1), (b)(1), and
(c)(3) through (5) by removing the word
‘‘intermediary’’, and by adding in its
place the word ‘‘MAC’’.
■ B. In paragraphs (b)(2), by removing
the word ‘‘intermediary’s’’ and adding
in its place the word ‘‘MAC’s’’.
■ C. In paragraphs (a) introductory text,
(c)(1), and (c)(2)(i) and (ii) by removing
the term ‘‘rural health clinic’’ and by
adding in its place the term ‘‘RHC’’.
■ D. In paragraphs (a) introductory text,
(c)(1), and (c)(2)(i) and (ii) by removing
the term ‘‘Federally qualified health
center’’ and by adding in its place the
term ‘‘FQHC’’.
■ E. In paragraphs (b)(1) and (2), (c)(1),
(c)(2) introductory text, and (c)(3)
through (6) by removing the word
‘‘clinic’’ and by adding in its place the
term ‘‘RHC’’.
■
■
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Federal Register / Vol. 78, No. 184 / Monday, September 23, 2013 / Proposed Rules
F. In paragraphs (b)(1) and (2), (c)(1),
(c)(2) introductory text, and (c)(3)
through (6) by removing the word
‘‘center’’ each time it appears and by the
term ‘‘FQHC’’.
■ 34. Section 405.2472 is amended by
revising paragraph (a) to read as follows:
■
§ 405.2472
Beneficiary appeals.
*
*
*
*
*
(a) The beneficiary is dissatisfied with
a MAC’s determination denying a
request for payment made on his or her
behalf by a RHC or FQHC;
*
*
*
*
*
PART 491—CERTIFICATION OF
CERTAIN HEALTH FACILITIES
35. The authority citation for part 491
continues to read as follows:
■
Authority: Sec. 1102 of the Social Security
Act (42 U.S.C. 1302); and sec. 353 of the
Public Health Service Act (42 U.S.C. 263a).
36. Section 491.8 is amended by
revising paragraph (a)(3).
■
§ 491.8
Staffing and staff responsibilities.
(a) * * *
(3) The physician assistant, nurse
practitioner, nurse-midwife, clinical
social worker or clinical psychologist
member of the staff may be the owner
or an employee of the clinic or center,
or may furnish services under contract
to the clinic or center. In the case of a
clinic, at least one physician assistants
or nurse practitioner must be an
employee of the clinic.
*
*
*
*
*
PART 493—LABORATORY
REQUIREMENTS
37. The authority citation for Part 493
is revised to read as follows:
■
Authority: Sec. 353 of the Public Health
Service Act, secs. 1102, 1861(e), the sentence
following sections 1861(s)(11) through
1861(s)(16) of the Social Security Act (42
U.S.C. 263a, 1302, 1395x(e), the sentence
following 1395x(s)(11) through 1395x(s)(16)),
and the Public Law 112–202 amendments to
42 U.S.C 263a.
38. Section 493.1 is amended by
revising the second sentence to read as
follows:
■
sroberts on DSK5SPTVN1PROD with PROPOSALS
§ 493.1
Basis and scope.
* * * It implements sections 1861 (e)
and (j), the sentence following section
1861(s)(13), and 1902(a)(9) of the Social
Security Act, and section 353 of the
Public Health Service Act, as amended
by section 2 of the Taking Essential
Steps for Testing Act of 2012. * * *
■ 39. Section 493.2 is revised by adding
the definition of ‘‘Repeat proficiency
testing referral’’ in alphabetical order to
read as follows:
VerDate Mar<15>2010
20:37 Sep 20, 2013
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§ 493.2
Definitions.
*
*
*
*
*
Repeat proficiency testing referral
means a second instance in which a
proficiency testing sample, or a portion
of a sample, is referred, for any reason,
to another laboratory for analysis prior
to the laboratory’s proficiency testing
program event cut-off date within the
period of time encompassing the two
prior survey cycles (including initial
certification, recertification, or the
equivalent for laboratories surveyed by
an approved accreditation
organizations).
*
*
*
*
*
■ 40. Section 493.1800 is amended by
revising paragraph (a)(2) introductory
text to read as follows:
§ 493.1800
Basis and scope.
(a) * * *
(2) The Clinical Laboratories
Improvement Act of 1967 (section 353
of the Public Health Service Act) as
amended by CLIA 1988, as amended by
section 2 of the Taking Essential Steps
for Testing Act of 2012.
*
*
*
*
*
■ 41. Section 493.1840 is amended by
revising paragraph (b) to read as follows:
§ 493.1840 Suspension, limitation, or
revocation of any type of CLIA certificate.
*
*
*
*
*
(b) Adverse action based on improper
referrals in proficiency testing. If CMS
determines that a laboratory has
intentionally referred its proficiency
testing samples to another laboratory for
analysis, CMS does one of the following:
(1) Revokes the laboratory’s CLIA
certificate for at least 1 year, prohibits
the owner and operator from owning or
operating a CLIA-certified laboratory for
at least 1 year, and may also impose a
civil money penalty in accordance with
§ 493.1834(d), if CMS determines that—
(i) A proficiency testing referral is a
repeat proficiency testing referral as
defined at § 493.2; or
(ii) On or before the proficiency
testing event close date, a laboratory
reported proficiency testing results
obtained from another laboratory to the
proficiency testing program.
(2) Suspends or limits the CLIA
certificate for less than 1 year based on
the criteria in § 493.1804(d), and also
impose alternate sanctions as
appropriate, in accordance with
§§ 493.1804(c) and (d), 493.1806(c),
493.1807(b), 493.1809 and, in the case
of civil money penalties, § 493.1834(d),
when CMS determines that paragraph
(b)(1)(i) or (ii) of this section does not
apply but that the laboratory obtained
test results for the proficiency testing
samples from another laboratory on or
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58413
before the proficiency testing event
close date. Among other possibilities,
alternative sanctions will always
include a civil money penalty and a
directed plan of correction that includes
required training of staff.
(3) Imposes alternate sanctions in
accordance with §§ 493.1804(c) and (d),
493.1806(c), 493.1807(b), 493.1809 and,
in the case of civil money penalties,
§ 493.1834(d), when CMS determines
that paragraph (b)(1) or (2) of this
section do not apply, and a PT referral
has occurred, but no test results are
received prior to the event close date by
the referring laboratory from the
laboratory that received the referral.
Among other possibilities, alternative
sanctions will always include a civil
money penalty and a directed plan of
correction that includes required
training of staff.
*
*
*
*
*
(Catalog of Federal Domestic Assistance
Program No. 93.773, Medicare—Hospital
Insurance; and Program No. 93.774, Medicare
Supplementary Medical Insurance Program)
Dated: September 5, 2013.
Marilyn Tavenner,
Administrator, Centers for Medicare &
Medicaid Services.
Approved: September 10, 2013.
Kathleen Sebelius,
Secretary, Department of Health and Human
Services.
Note: The following Addendum will not
appear in the Code of Federal Regulations.
Addendum: Proposed Geographic
Adjustment Factors (GAFs) for the
FQHC PPS
As described in section II.C.2. of this
proposed rule, the proposed GAFs for the
FQHC PPS are based on the proposed CY
2014 work and practice expense GPCIs and
the proposed cost share weights for the CY
2014 GPCI update, as published in the CY
2014 PFS proposed rule. These GAFs are
subject to change in the final FQHC PPS rule
based on more current data, including the
finalized PFS GPCI and cost share weight
values.
Locality name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Alabama ......................................
Alaska .........................................
Arizona ........................................
Arkansas .....................................
Anaheim/Santa Ana, CA .............
Los Angeles, CA .........................
Marin/Napa/Solano, CA ..............
Oakland/Berkeley, CA .................
San Francisco, CA ......................
San Mateo, CA .........................
Santa Clara, CA ........................
Ventura, CA ..............................
Rest of California ......................
Colorado ....................................
Connecticut ...............................
E:\FR\FM\23SEP2.SGM
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GAF
0.933
1.306
0.984
0.919
1.122
1.095
1.154
1.152
1.215
1.209
1.203
1.104
1.053
1.002
1.066
58414
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Locality name
sroberts on DSK5SPTVN1PROD with PROPOSALS
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
GAF
DC + MD/VA Suburbs ..............
Delaware ...................................
Fort Lauderdale, FL ..................
Miami, FL ..................................
Rest of Florida ..........................
Atlanta, GA ................................
Rest of Georgia .........................
Hawaii/Guam .............................
Idaho .........................................
Chicago, IL ................................
East St. Louis, IL ......................
Suburban Chicago, IL ...............
Rest of Illinois ...........................
Indiana ......................................
Iowa ...........................................
Kansas ......................................
Kentucky ...................................
New Orleans, LA .......................
Rest of Louisiana ......................
Southern Maine .........................
Rest of Maine ............................
Baltimore/Surr. Cntys, MD ........
Rest of Maryland .......................
Metropolitan Boston ..................
Rest of Massachusetts .............
Detroit, MI .................................
Rest of Michigan .......................
Minnesota ..................................
Mississippi .................................
Metropolitan Kansas City, MO ..
Metropolitan St Louis, MO ........
VerDate Mar<15>2010
20:37 Sep 20, 2013
1.120
1.024
1.013
1.016
0.973
1.005
0.940
1.075
0.935
1.032
0.962
1.040
0.944
0.947
0.929
0.933
0.925
0.983
0.929
0.998
0.940
1.058
1.023
1.081
1.037
1.009
0.957
1.005
0.916
0.968
0.974
Jkt 229001
Locality name
GAF
47 Rest of Missouri ........................
48 Montana ....................................
49 Nebraska ...................................
50 Nevada ......................................
51 New Hampshire ........................
52 Northern NJ ...............................
53 Rest of New Jersey ..................
54 New Mexico ..............................
55 Manhattan, NY ..........................
56 NYC Suburbs/Long I., NY .........
57 Poughkpsie/N NYC Suburbs,
NY .................................................
58 Queens, NY ..............................
59 Rest of New York ......................
60 North Carolina ...........................
61 North Dakota .............................
62 Ohio ...........................................
63 Oklahoma ..................................
64 Portland, OR .............................
65 Rest of Oregon .........................
66 Metropolitan Philadelphia, PA ...
67 Rest of Pennsylvania ................
68 Puerto Rico ...............................
69 Rhode Island .............................
70 South Carolina ..........................
71 South Dakota ............................
72 Tennessee ................................
73 Austin, TX .................................
74 Beaumont, TX ...........................
75 Brazoria, TX ..............................
76 Dallas, TX .................................
PO 00000
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0.905
0.974
0.938
1.026
1.021
1.108
1.070
0.954
1.107
1.123
1.038
1.122
0.965
0.953
0.982
0.959
0.913
1.024
0.975
1.043
0.957
0.808
1.035
0.945
0.974
0.936
1.001
0.941
1.002
1.013
Locality name
77
78
79
80
81
82
83
84
85
86
87
88
89
Fort Worth, TX ..........................
Galveston, TX ...........................
Houston, TX ..............................
Rest of Texas ............................
Utah ...........................................
Vermont .....................................
Virginia ......................................
Virgin Islands ............................
Seattle (King Cnty), WA ............
Rest of Washington ..................
West Virginia .............................
Wisconsin ..................................
Wyoming ...................................
GAF
0.995
1.009
1.009
0.952
0.945
0.991
0.986
1.000
1.083
1.003
0.901
0.972
0.989
[FR Doc. 2013–22821 Filed 9–18–13; 2:00 pm]
BILLING CODE 4120–01–P
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Agencies
[Federal Register Volume 78, Number 184 (Monday, September 23, 2013)]
[Proposed Rules]
[Pages 58385-58414]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-22821]
[[Page 58385]]
Vol. 78
Monday,
No. 184
September 23, 2013
Part II
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 491, and 493
-----------------------------------------------------------------------
Medicare Program; Prospective Payment System for Federally Qualified
Health Centers; Changes to Contracting Policies for Rural Health
Clinics; and Changes to Clinical Laboratory Improvement Amendments of
1988 Enforcement Actions for Proficiency Testing Referral; Proposed
Rule
Federal Register / Vol. 78 , No. 184 / Monday, September 23, 2013 /
Proposed Rules
[[Page 58386]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 491, and 493
[CMS-1443-P]
RIN 0938-AR62
Medicare Program; Prospective Payment System for Federally
Qualified Health Centers; Changes to Contracting Policies for Rural
Health Clinics; and Changes to Clinical Laboratory Improvement
Amendments of 1988 Enforcement Actions for Proficiency Testing Referral
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would establish methodology and payment
rates for a prospective payment system (PPS) for federally qualified
health center (FQHC) services under Medicare Part B beginning on
October 1, 2014, in compliance with the statutory requirement of the
Affordable Care Act. This proposed rule would also establish a policy
which would allow rural health clinics (RHCs) to contract with
nonphysician practitioners when statutory requirements for employment
of nurse practitioners and physician assistants are met, and make other
technical and conforming changes to the RHC and FQHC regulations.
Finally, this proposed rule would make changes to the Clinical
Laboratory Improvement Amendments (CLIA) regulations regarding
enforcement actions for proficiency testing referral.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on November 18,
2013.
ADDRESSES: In commenting, please refer to file code CMS-1443-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1443-P, P.O. Box 8013,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1443-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. Alternatively, you may deliver (by hand or
courier) your written comments ONLY to the following addresses prior to
the close of the comment period:
a. For delivery in Washington, DC--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, Room 445-G, Hubert
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC
20201.
(Because access to the interior of the Hubert H. Humphrey Building
is not readily available to persons without Federal government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 7500 Security
Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
call telephone number (410) 786-7195 in advance to schedule your
arrival with one of our staff members.
Comments erroneously mailed to the addresses indicated as
appropriate for hand or courier delivery may be delayed and received
after the comment period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Corinne Axelrod, (410) 786-5620 for
FQHCs and RHCs.
Melissa Singer, (410) 786-0365 for CLIA Enforcement Actions for
Proficiency Testing Referral.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
Acronyms
AIR All-Inclusive Rate
APM Alternative Payment Methodology
CCN CMS Certification Number
CCR Cost-To-Charge Ratio
CFR Code of Federal Regulations
CLIA Clinical Laboratory Improvement Amendments of 1988
CMP Civil Money Penalty
CMS Centers for Medicare & Medicaid Services
CNM Certified Nurse Midwife
CP Clinical Psychologist
CSW Clinical Social Worker
CY Calendar Year
DSMT Diabetes Self-Management Training
E/M Evaluation and Management
FQHC Federally Qualified Health Center
FSHCAA Federally Supported Health Centers Assistance Act
GAF Geographic Adjustment Factor
GAO Government Accountability Office
GPCI Geographic Practice Cost Index
HCPCS Healthcare Common Procedure Coding System
HCRIS Healthcare Cost Report Information System
HBV Hepatitis B Vaccines
HRSA Health Resources and Services Administration
IDR Integrated Data Repository
IPPE Initial Preventive Physical Exam
MA Medicare Advantage
MAC Medicare Administrative Contractor
MCO Managed Care Organization
MEI Medicare Economic Index
MIPPA Medicare Improvements for Patients and Providers Act
MNT Medical Nutrition Therapy
MUA Medically Underserved Area
MUP Medically Underserved Population
NP Nurse Practitioner
OBRA Omnibus Budget Reconciliation Act
PA Physician Assistant
PHS Public Health Service
PFS Physician Fee Schedule
PPS Prospective Payment System
PT Proficiency testing
ResDAC Research Data Assistance Center
RIA Regulatory Impact Analysis
RHC Rural Health Clinic
SNF Skilled Nursing Facility
UDS Uniform Data System
USPSTF U.S. Preventive Services Task Force
UPL Upper Payment Limit
[[Page 58387]]
Table of Contents
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
2. Summary of Major Provisions
a. Basis for Payment Under the FQHC PPS
b. Addressing Payment for Multiple Visits on the Same Day
c. Beneficiary Coinsurance
d. Waiving Coinsurance for Preventive Services
e. Transition Period and Annual Adjustment
f. Other FQHC and RHC Provisions
g. CLIA Enforcement Actions for Proficiency Testing Referral
3. Summary of Cost and Benefits
B. Overview and Background
1. FQHC Description and General Information
2. Medicare's FQHC Coverage and Payment Benefit
3. Legislation Pertaining to Medicare and Medicaid Payments for
FQHC Services
4. Medicare's Current Cost-Based Reimbursement Methodology
5. Summary of Requirements Under the Affordable Care Act for the
FQHC PPS and Other Provisions Pertaining to FQHCs
6. Approach to the FQHC PPS
II. Establishment of the Federally Qualified Health Center
Prospective Payment System (FQHC PPS)
A. Design and Data Sources for the FQHC PPS
1. Overview of the PPS Design
2. Medicare FQHC Cost Reports
3. Medicare FQHC Claims
4. Linking Cost Reports and Claims To Compute the Average Cost
per Visit
B. Policy Considerations for Developing the FQHC PPS Rates and
Adjustments
1. Multiple Visits on the Same Day
2. Preventive Laboratory and Technical Components of Other
Preventive Services
3. Vaccine Costs
C. Risk Adjustments
1. Alternative Calculations for Average Cost per Visit
2. Geographic Adjustment Factor
3. New Patient or Initial Medicare Visit
4. Other Adjustment Factors Considered
5. Report on PPS Design and Models
D. Base Rate Calculation
E. Implementation
1. Transition Period and Annual Adjustment
2. Medicare Claims Payment
3. Beneficiary Coinsurance
4. Waiving Coinsurance for Preventive Services
5. Cost Reporting
6. Medicare Advantage Organizations
III. Additional Proposed Changes Regarding FQHCs and RHCs
A Rural Health Clinic Contracting
B. Technical and Conforming Changes
IV. Clinical Laboratory Improvement Amendments of 1988 (CLIA)--
Enforcement Actions for Proficiency Testing Referral
A. Background
B. Proposed Changes
V. Other Required Information
A. Requests for Data From the Public
B. Collection of Information Requirements
VI. Response to Comments
VII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Limitations of Our Analysis
D. Anticipated Effects of FQHCs PPS
1. Effects on FQHCs
2. Effects on RHCs
3. Effects on Other Providers and Suppliers
4. Effects on Medicare and Medicaid Programs
5. Effects on Medicare Beneficiaries
E. Effects of Other Policy Changes
1. Effects of Policy Changes for FQHCs and RHCs
2. Effects of CLIA Changes for Enforcement Actions for
Proficiency Testing Referral
F. Alternatives Considered
G. Accounting Table and Statement
H. Conclusions
Regulations Text
ADDENDUM--Proposed FQHC PPS Geographic Adjustment Factors (GAFs)
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
The Affordable Care Act (Pub. L. 111-148) added section 1834(o) of
the Social Security Act (the Act) to establish a new system of payment
for the costs of federally qualified health center (FQHC) services
under Medicare Part B (Supplemental Medical Insurance) based on
prospectively set rates. According to section 1834(o)(2)(A) of the Act,
the FQHC prospective payment system (PPS) is to be effective beginning
on October 1, 2014. The primary purpose of this rule is to propose a
methodology and payment rates for the new FQHC PPS.
This rule also proposes to allow RHCs to contract with non-
physician practitioners, consistent with statutory requirements that
require at least one nurse practitioner (NP) or physician assistant
(PA) be employed by the RHC.
The ``Taking Essential Steps for Testing Act of 2012'' (TEST Act)
(Pub. L. 112-202) was enacted on December 4, 2012. The TEST Act amended
section 353 of the Public Health Service Act (PHS Act) to provide the
Secretary with discretion as to which sanctions may be applied to cases
of intentional PT referral. The purpose of this proposal is to amend
the CLIA regulations to be in alignment with the statutory change and
to propose the regulatory changes needed to fully implement the TEST
Act.
2. Summary of the Major Provisions
a. Basis for Payment Under the FQHC PPS
Under the PPS, we are proposing 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 would be calculated based on an average cost per
visit (that is, total FQHC cost divided by total FQHC encounters) using
Medicare cost report and claims data. We believe an encounter-based
payment rate for the FQHC PPS will both provide appropriate payment
while remaining administratively simple. An encounter-based payment
rate is consistent with our commitment to greater bundling of services,
and gives FQHCs the flexibility to implement efficiencies to reduce
over-utilization of services. FQHCs are accustomed to billing for a
single encounter and being paid through an all-inclusive rate (AIR). An
encounter-based payment is also similar to Medicaid payment systems,
and Medicaid is the predominant payer for FQHCs.
We are also proposing a few simple adjustments to the encounter-
based payment rate. We are proposing to adjust the encounter-based rate
for geographic differences in the cost of inputs by applying an
adaptation of the geographic practice cost indices (GPCI) used to
adjust payment under the Physician Fee Schedule (PFS). Also, we are
proposing to adjust the encounter-based rate when a FQHC furnishes care
to a patient that is new to the FQHC or to a beneficiary receiving a
comprehensive initial Medicare visit (that is, an initial preventive
physical examination (IPPE) or an initial annual wellness visit (AWV)).
We believe this adjustment would account for the greater intensity and
resource use associated with these types of services. For additional
information on the design of the FQHC PPS and risk adjustment, see
section II. of this proposed rule.
b. Addressing Payment for Multiple Visits on the Same Day
Under the current reasonable cost based payment methodology, FQHCs
are paid an AIR for all services furnished on the same day to the same
beneficiary, with the following exceptions: (1) The FQHC can bill for
an additional visit on the same day when an illness or injury occurs
subsequent to the initial visit; and (2) the FQHC can bill for
additional visits when mental health, diabetes self-management/medical
nutrition therapy (DSMT/MNT), or the IPPE are furnished on the same day
as the medical visit. However, there are no statutory requirements that
we pay separately for these services, and an analysis of FQHC claims
data submitted in 2011 and 2012
[[Page 58388]]
indicates that less than 0.5 percent of all billed visits were for more
than 1 visit per day for the same beneficiary.
We understand that there may be many possible reasons why the rate
of billing for more than one visit per day has been low, and that there
are many ways that FQHCs are providing integrated, patient-centered
health care services. Since the option to bill for more than one visit
per day is rarely utilized by FQHCs and continuation of the exception
to the single, all-inclusive payment per day requires additional
complexity to the PPS, we are proposing to eliminate these exceptions
for payment for multiple visits on the same day and limit FQHCs to 1
encounter payment per day. We believe this approach is consistent with
an all-inclusive methodology and reasonable cost principles, and would
not significantly impact FQHC reimbursement. However, we are interested
in comments that address whether there are factors that we have not
considered, particularly in regards to mental health services, and we
would reconsider this approach if information is presented that this
may impact on beneficiaries' access to services or the integration of
services in underserved communities. For additional information on
billing for multiple visits on the same day, see section B of this
proposed rule.
c. Beneficiary Coinsurance
Under the current reasonable cost system, beneficiary coinsurance
for FQHC services is assessed based on the FQHC's charge, which can
result in the coinsurance amount being higher than what it would be if
it was based on the AIR, which is derived from costs. Section
1833(a)(1)(Z) of the Act requires that Medicare payment under the FQHC
PPS shall be 80 percent of the lesser of the actual charge or the PPS
rate, and we are proposing that coinsurance would be 20 percent of the
lesser of the actual charge or the PPS rate. While the statute makes no
specific provision to revise the methodology for determining
coinsurance amounts under the new PPS, we believe that this is
consistent with statutory language in sections 1866(a)(2)(A) and
1833(a)(3)(A) of the Act and elsewhere that addresses coinsurance
amounts and Medicare cost principles.
d. Waiving Coinsurance for Preventive Services
Effective January 1, 2011, Medicare waives beneficiary coinsurance
for eligible preventive services furnished by a FQHC. Medicare requires
detailed Healthcare Common Procedure Coding System (HCPCS) coding on
FQHC claims to ensure that coinsurance is not applied to the line item
charges for these preventive services.
For FQHC claims that include a mix of preventive and non-preventive
services, we are proposing to use physician office payments under the
Medicare PFS to determine the proportional amount of coinsurance that
should be waived for payments based on the PPS encounter rate, and we
would continue to use provider-reported charges to determine the amount
of coinsurance that should be waived for payments based on the
provider's charge. Total payment to the FQHC, including both Medicare
and beneficiary liability, would not exceed the provider's charge or
the PPS rate.
e. Transition Period and Annual Adjustment
The statute requires implementation of the FQHC PPS for FQHCs with
cost reporting periods beginning on or after October 1, 2014. FQHCs
would transition into the PPS based on their cost reporting periods.
The claims processing system would maintain the current system and the
PPS until all FQHCs have transitioned to the PPS. We are proposing to
transition the PPS to a calendar year update for all FQHCs, beginning
January 1, 2016, to be consistent with many of the PFS files that are
updated on a calendar year basis. The statute also requires us to
adjust the FQHC PPS by the MEI in the first year after implementation,
and either the MEI or a FQHC market basket in subsequent years.
f. Other FQHC/RHC Provisions
In addition to proposing to codify the statutory requirements for
the FQHC PPS in this proposed rule, we are proposing to allow RHCs to
contract with non-physician practitioners, consistent with statutory
requirements that require at least one nurse practitioner (NP) or
physician assistant (PA) be employed by the RHC. The ability to
contract with NPs, PAs, certified nurse midwives (CNMs), clinical
psychologists (CPs), and clinical social workers (CSWs) would provide
RHCs with additional flexibility with respect to recruiting and
retaining non-physician practitioners.
We are also proposing edits to correct terminology, clarify policy,
delete irrelevant code, and make other conforming changes for existing
mandates and the new PPS.
g. CLIA Enforcement Actions for Proficiency Testing Referral
The ``Taking Essential Steps for Testing Act of 2012'' (Pub. L.
112-202) amended section 353 of the Public Health Service Act to
provide the Secretary with discretion as to which sanctions may be
applied to cases of intentional PT referral in lieu of the automatic
revocation of the CLIA certificate and the subsequent ban preventing
the owner and operator from owning or operating a CLIA certified
laboratory for 2 years. Based on this discretion, we would amend the
CLIA regulations by adding three categories of sanctions for PT
referral based on the severity and extent of the violation.
3. Summary of Cost and Benefits
a. For the FQHC PPS
As required by section 1834(o)(2)(B)(i) of the Act, initial
payments (Medicare and coinsurance) under the FQHC PPS must equal 100
percent of the estimated amount of reasonable costs, as determined
without the application of the current system's UPL or productivity
standards that can reduce a FQHC's per visit rate. The proposed FQHC
PPS is estimated to have an overall impact of increasing total Medicare
payments to FQHCs by approximately 30 percent. The annualized cost to
the federal government associated with the proposed FQHC PPS is
estimated to be between $183 million and $186 million, based on 5 year
discounted flows using 3 percent and 7 percent factors.
b. For Other FQHC and RHC Changes
The ability to contract with NPs, PAs, CNMs, CP, and CSWs would
provide RHCs with additional flexibility with respect to recruiting and
retaining non-physician practitioners, which may result in increasing
access to care in rural areas. There is no cost to the Federal
government and we are unable to estimate a cost savings for RHCs. In
addition, we believe that there are no costs associated with the
technical and conforming regulatory changes that would be made in
conjunction with the establishment of the FQHC PPS.
c. CLIA Enforcement Actions for Proficiency Testing Referral Changes
Over a 4-year span, we estimate that an average of 6 cases per year
may have fit the terms of described in this proposed rule to have
alternative sanctions applied. We believe that the largest single type
of cost is the expense to the laboratory or hospital to contract out
for management of the laboratory, and to pay laboratory director fees,
due
[[Page 58389]]
to the 2-year ban that prohibits the owner and operator from owning or
operating a CLIA-certified laboratory in accordance with revocation of
the CLIA certificate. Estimating the expense of alternative sanctions
at $150,000 per laboratory, the annual fiscal savings of the proposed
changes for affected laboratories would be approximately $2.6 million
($578,400--$150,000 for 6 laboratories). We note that there are a
number of factors (known and unknown) that could impact this estimate.
We also note that the total savings may not be large, but the savings
to the individual laboratory or hospital that would be affected may be
significant. However, we note that the $2.6 million estimated savings
to laboratories may overstate or understate the provision's net
benefits. While we recognize that there are several potential
inaccuracies in our estimates, we lack data to account for these
considerations.
B. Overview and Background
1. FQHC Description and General Information
FQHCs are facilities that provide services that are typically
furnished in an outpatient clinic setting. They are currently paid an
AIR per visit for qualified primary and preventive health services
furnished to Medicare beneficiaries.
The statutory requirements that FQHCs must meet to qualify for the
Medicare benefit are in section 1861(aa)(4) of the Act. Based on these
provisions, the following three types of organizations that are
eligible to enroll in Medicare as FQHCs:
Health Center Program grantees: Organizations receiving
grants under section 330 of the PHS Act (42 U.S.C. 254b).
Health Center Program ``look-alikes'': Organizations that
have been identified by the Health Resources and Services
Administration (HRSA) as meeting the requirements to receive a grant
under section 330 of the PHS Act, but which do not receive section 330
grant funding.
Outpatient health programs/facilities operated by a tribe
or tribal organization (under the Indian Self-Determination Act) or by
an urban Indian organization (under Title V of the Indian Health Care
Improvement Act).
Section 330 Health Centers are the predominant type of FQHC.
Originally known as Neighborhood Health Centers, they have evolved over
the last 45 years to become an integral component of the Nation's
health care safety net system, with more than 1,100 centers operating
approximately 8,900 delivery sites that serve more than 21 million
people each year from medically underserved communities. They include
community health centers (section 330(e) of the PHS Act), migrant
health centers (section 330(g) of the PHS Act), health care for the
homeless (section 330(h) of the PHS Act), and public housing primary
care (section 330(i) of the PHS Act).
FQHCs may be either not-for-profit or public organizations. The
main purpose of the FQHC program is to enhance the provision of primary
care services in underserved urban, rural and tribal communities. FQHCs
that are not operated by a tribe or tribal organization are required to
be located in or treat people from a Federally-designated medically
underserved area (MUA) or medically underserved population (MUP) and to
comply with all the requirements of section 330 of the PHS Act. Some of
these section 330 requirements include offering a sliding fee scale to
persons with incomes below 200 percent of the federal poverty level,
and being governed by a board of directors of whom a majority of the
members receive their care at the FQHC. According to HRSA's Uniform
Data System (UDS),\1\ approximately 8 percent of FQHC patients were
Medicare beneficiaries, 41 percent were Medicaid recipients, and 36
percent were uninsured in 2012. The remainder was privately insured or
had other public insurance. Medicare and Medicaid accounted for
approximately 9 percent and 47 percent of their total billing,
respectively.
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\1\ The UDS collects and tracks data such as patient
demographics, services provided, staffing, clinical indicators,
utilization rates, costs, and revenues from section 330 health
centers and health center look-alikes.
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Congress has authorized several programs to assist FQHCs in
increasing access to care for underserved and special populations. Many
FQHCs receive section 330 grant funds to offset the costs of
uncompensated care and provide other services. All FQHCs are eligible
to participate in the 340B Drug Pricing Program for pharmaceutical
products. FQHCs that receive section 330 grant funds also are eligible
to apply for medical malpractice coverage under Federally Supported
Health Centers Assistance Act (FSHCAA) of 1992 (Pub. L. 102-501) and
FSHCAA of 1995 (Pub. L. 104-73 amending section 224 of the PHS Act) and
may be eligible for Federal loan guarantees for capital improvements
when funds for this purpose are appropriated. Title VIII of the
American Recovery and Reinvestment Act (Pub. L. 111-5) appropriated $2
billion for construction, equipment, health information technology, and
related improvements to existing section 330 grantees and for the
establishment of new grantees sites. The Affordable Care Act
appropriated an additional $11 billion over a 5-year period ($1.5
billion for capital improvements and $9.5 billion for support and
expansion of the 330 health centers). HRSA administers the 330 grant
program and other programs that assist FQHCs in increasing access to
primary and preventive health care in underserved communities.
2. Medicare's FQHC Coverage and Payment Benefit
The FQHC coverage and payment benefit under Medicare was added
effective October 1, 1991, when section 1861(aa) of the Act was amended
by section 4161 of the Omnibus Budget Reconciliation Act (OBRA) of 1990
(Pub. L. 101-508, enacted on November 5, 1990) and implemented in
regulations via the June 12, 1992 final rule with comment period (57 FR
24961) and the April 3, 1996 final rule (61 FR 14640). Regulations
pertaining to FQHCs are found primarily in 42 CFR Part 405, and 42 CFR
Part 491.
FQHC covered services and supplies include the following:
Physician, NP, PA, CNM, CP, and CSW services.
Services and supplies furnished incident to a physician,
NP, PA, CNM, CP, or CSW services.
FQHC covered drugs that are furnished by, a FQHC
practitioner.
Outpatient diabetes self-management training (DSMT) and
medical nutrition therapy (MNT) for beneficiaries with diabetes or
renal disease.
Statutorily-authorized preventive services.
Visiting nurse services to the homebound in an area where
CMS has determined that there is a shortage of home health agencies.
3. Legislation Pertaining to Medicare and Medicaid Payments for FQHC
Services
FQHCs currently receive cost-based reimbursement, subject to an
upper payment limit (UPL) and productivity standards, for services
furnished to Medicare beneficiaries, and PPS payment, based on their
historical cost data, for services furnished to Medicaid recipients
(section 1902(bb) of the Act). The UPL for Medicare FQHC services is
adjusted annually based on the Medicare Economic Index (MEI), as
described in 1842(i)(3) of the Act. Authority to apply productivity
standards is found in 1833(a) and 1861(v)(1)(A) of the Act. Section
151(a)
[[Page 58390]]
of the Medicare Improvements for Patients and Providers Act (MIPPA) of
2008 (Pub. L. 110-275, enacted on July 15, 2008) increased the UPL for
FQHC by $5, effective January 1, 2010. Section 151(b) of the MIPPA
required the Government Accountability Office (GAO) to study and report
on the effects and adequacy of the Medicare FQHC payment structure.
Based on a GAO analysis of 2007 Medicare cost report data, about 72
percent of FQHCs had average costs per visit that exceeded the UPL, and
the application of productivity standards reduced Medicare payment for
approximately 7 percent of FQHCs. In 2007, application of the limits
and adjustments currently in place reduced FQHCs' submitted costs of
services by approximately $73 million, about 14 percent (Medicare
Payments to Federal Qualified Health Centers, GAO-10-576R, July 30,
2010).
The Benefits Improvement and Protection Act of 2000 (Pub. L. 106-
554, enacted December 21, 2000) created section 1902(bb) of the Act
which established a PPS for Medicaid reimbursement. The law allowed
state Medicaid agencies to establish their own reimbursement
methodology for FQHCs provided that total reimbursement would not be
less than the payment under the Medicaid PPS, and that the FQHC agreed
to the alternative payment methodology (APM). For beneficiaries
enrolled in a managed care organization (MCO), the MCO pays the FQHC an
agreed upon amount, and the state Medicaid program pays the FQHC a
wraparound payment equal to the difference, if any, between the PPS
rate and the payment from the managed care organization.
The Affordable Care Act established a Medicare PPS for FQHCs.
Section 10501(i)(3)(A) of the Affordable Care Act added section 1834(o)
of the Act, requiring the Medicare FQHC PPS to be implemented starting
October 1, 2014. The new PPS for FQHCs is required to take into account
the type, intensity, and duration of services furnished by FQHCs and
may include adjustments, including geographic adjustments, determined
appropriate by the Secretary. A detailed discussion of the statutory
requirements for the Medicare FQHC PPS is discussed in section I.B. of
this proposed rule.
4. Medicare's Current Reasonable Cost-Based Reimbursement Methodology
FQHCs are paid an AIR per visit for medically-necessary
professional services that are furnished face-to-face (one practitioner
and one patient) with a FQHC practitioner (42 CFR 405.2463). Services
and supplies furnished incident to a FQHC professional service are
included in the AIR and are not billed as a separate visit. Technical
components such as x-rays, laboratory tests, and durable medical
equipment are not part of the AIR and are billed separately to Medicare
Part B.
The AIR is calculated by dividing total allowable costs by the
total number of visits. Allowable costs may include practitioner
compensation, overhead, equipment, space, supplies, personnel, and
other costs incident to the delivery of FQHC services. Cost reports are
filed in order to identify all incurred costs applicable to furnishing
covered FQHC services. Freestanding FQHCs complete Form CMS-222-92,
``Independent Rural Health Clinic and Freestanding Federally Qualified
Health Center Cost Report''. FQHCs based in a hospital complete the
Worksheet M series of Form CMS-2552-10, ``Hospital and Hospital Care
Complex Cost Report''. FQHCs based in a skilled nursing facility (SNF)
complete the Worksheet I series of Form CMS-2540-10, ``Skilled Nursing
Facility and Skilled Nursing Facility Health Care Complex Cost
Report''. FQHCs based in a home health agency complete the Worksheet RF
series of Form CMS-1728-94, ``Home Health Agency Cost Report''.
Information on these cost report forms is found in Chapters 29, 40, 41
and 32, respectively, of the ``Provider Reimbursement Manual--Part 2''
(Publication 15-2). Per 42 CFR 413.65(n), only FQHCs that were
operating as provider-based clinics prior to 1995 and either received
funds under section 330 of the PHS Act or were determined by CMS to
meet the criteria to be a look-alike clinic are eligible to be
certified as provider-based FQHCs. FQHCs that do not already have
provider-based status are no longer permitted to receive the
designation.
At the beginning of a FQHC's fiscal year, the Medicare
Administrative Contractor (MAC) calculates an interim AIR based on
actual costs and visits from the previous cost reporting period. For
new FQHCs, the interim AIR is estimated based on a percentage of the
per-visit limit. FQHCs receive payments throughout the year based on
their interim rate. After the conclusion of the fiscal year, the cost
report is reconciled and any necessary adjustments in payments are
made.
Allowable costs are subject to tests of reasonableness,
productivity standards, and an overall payment limit (42 CFR 405.2464,
405.2466, and 405.2468). The productivity standards require 4,200
visits per full-time equivalent physician and 2,100 visits per full-
time equivalent non-physician practitioner (NP, PA or CNM) on an annual
basis. If the FQHC has furnished fewer visits than required by the
productivity standards, the allowable costs would be divided by the
productivity standards numbers instead of the actual number of visits.
The payment limit varies based on whether the FQHC is located in an
urban or rural area (as defined in section 1886(d)(2)(D) of the Act).
The 2013 payment limits per visit for urban and rural FQHCs are $128.00
and $110.78, respectively. FQHCs with multiple sites may elect to file
a consolidated cost report (CMS Pub. 100-04, Medicare Claims Processing
Manual, chapter 9, Sec. 30.8), and if the FQHC has both urban and
rural sites, the MAC applies a weighted UPL based on the percentage of
urban and rural visits as the percentage of total site visits. The AIR
is equal to the FQHC's cost per visit (adjusted by the productivity
standard if appropriate) or the payment limit, whichever is less.
Medicare beneficiaries receiving services at a FQHC are not subject
to the annual Medicare deductible for FQHC-covered services (section
1833(b) of the Act). Medicare beneficiaries pay a copayment based on 20
percent of the charges (section 1866(a)(2)(A)(ii) of the Act), except
for: (1) Mental health treatment services, which are subject to the
outpatient mental health treatment limitation until January 1, 2014,
when beneficiary coinsurance is reduced to the same level as most other
Part B services; (2) FQHC-supplied influenza and pneumococcal and
Hepatitis B vaccines (HBV); and (3) effective January 1, 2011,
personalized prevention plan services and any Medicare covered
preventive service that is recommended with a grade of A or B by the
U.S. Preventive Services Task Force (USPSTF).
The administration and payment of influenza and pneumococcal
vaccines is not included in the AIR. They are paid at 100 percent of
reasonable costs through the cost report. The cost and administration
of Hepatitis B vaccine (HBV) is covered under the FQHC's AIR.
5. Summary of Requirements Under the Affordable Care Act for the FQHC
PPS and Other Provisions Pertaining to FQHCs
Section 10501(i)(3)(A) of the Affordable Care Act amended section
1834 of the Act by adding a new subsection (o), ``Development and
Implementation of Prospective Payment System''. Section 1834(o)(1)(A)
of the Act requires that the system include a process for appropriately
describing the services furnished by FQHCs. Also, the
[[Page 58391]]
system must establish payment rates based on such descriptions of
services, taking into account the type, intensity, and duration of
services furnished by FQHCs. The system may include adjustments (such
as geographic adjustments) as determined appropriate by the Secretary
of HHS.
Section 1834(o)(1)(B) of the Act specifies that, by no later than
January 1, 2011, FQHCs must begin submitting information as required by
the Secretary, including the reporting of services using HCPCS codes,
in order to develop and implement the PPS.
Section 1834(o)(2)(A) of the Act requires that the FQHC PPS must be
effective for cost reporting periods beginning on or after October 1,
2014. For such cost reporting periods, reasonable costs will no longer
be the basis for Medicare payment for services furnished to
beneficiaries at FQHCs.
Section 1834(o)(2)(B)(i) of the Act requires that the initial PPS
rates must be set so as to equal in the aggregate 100 percent of the
estimated amount of reasonable costs that would have occurred for the
year if the PPS had not been implemented. This 100 percent must be
calculated prior to application of copayments, per visit limits, or
productivity adjustments.
Section 1834(o)(2)(B)(ii) of the Act describes the methods for
determining payments in subsequent years. After the first year of
implementation, the PPS payment rates must be increased by the
percentage increase in the MEI. After the second year of
implementation, PPS rates shall be increased by the percentage increase
in a market basket of FQHC goods and services as established through
regulations, or, if not available, the MEI that is published in the
Physician Fee Schedule (PFS) final rule.
Section 10501(i)(3)(B) of the Affordable Care Act added section
1833(a)(1)(Z) to the Act to specify that Medicare payment for FQHC
services under section 1834(o) of the Act shall be 80 percent of the
lesser of the actual charge or the PPS amount determined under section
1834(o).
Section 10501(i)(3)(C) of the Affordable Care Act added section
1833(a)(3)(B)(i)(II) of the Act to require that FQHCs that contract
with Medicare Advantage (MA) organizations be paid at least the same
amount they would have received for the same service under the FQHC
PPS.
Section 10501(i)(2) of the Affordable Care Act amended the
definition of FQHC services as defined in section 1861(aa)(3)(A) of the
Act by replacing the specific references to services provided under
section 1861(qq) and (vv) of the Act (DSMT and MNT services,
respectively) with preventive services as defined in section
1861(ddd)(3) of the Act, as established by section 4014(a)(3) of the
Affordable Care Act. These changes were effective for services provided
on or after January 1, 2011. Accordingly, in the CY 2011 Medicare PFS
final rule (75 FR 73417 through 73419, November 29, 2010) we adopted
conforming regulations by adding a new Sec. 405.2449, which added the
new preventive services definition to the definition of FQHC services
effective for services provided on or after January 1, 2011 (see that
rule for a detailed discussion regarding preventive services covered
under the FQHC benefit and the requirements for waiving coinsurance for
such services).
Section 1833(b)(4) of the Act stipulates that the Medicare Part B
deductible shall not apply to FQHC services. The Affordable Care Act
made no change to this provision; therefore Medicare will continue to
waive the Part B deductible for all FQHC services in the FQHC PPS,
including preventive services added by the Affordable Care Act.
6. Approach to the FQHC PPS
To enhance our understanding of the services furnished by FQHCs and
the unique role of FQHCs in providing services to people from medically
underserved areas and populations, we worked closely with HRSA in the
development of this proposed rule. They provided valuable expertise on
the challenges facing FQHCs in increasing access to health care for
underserved populations and the importance of Medicare reimbursement to
the overall financial viability of the health centers. In addition to
providing patient population and services data from their UDS, HRSA
also enabled us to gain additional data on insurance coverage among a
subset of FQHC patients from the Community Health Applied Research
Network. We believe that the proposals in this proposed rule benefited
greatly from their assistance.
Our goal for the FQHC PPS is to create a system in accordance with
the statute whereby FQHCs are fairly reimbursed for the services they
provide to Medicare patients in the least burdensome manner possible,
so that they may continue to provide primary and preventive health
services to the communities they serve. We will continue to evaluate
our approach based on the comments we receive to this proposed rule in
the context of balancing payment requirements, regulatory burden, and
the need for appropriate accountability and oversight.
II. Establishment of the Federally Qualified Health Center Prospective
Payment System (FQHC PPS)
A. Design and Data Sources for the FQHC PPS
1. Overview of the PPS Design
In developing the new PPS for FQHCs, we considered the statutory
requirements at 1834(o)(1)(A) of the Act requiring that the new PPS
take into account the type, intensity, and duration of services
furnished by FQHCs, and allows for adjustments, including geographic
adjustments, as determined appropriate by the Secretary. We explored
several approaches to the methodology and modeled options for
calculating payment rates and adjustments under a PPS based on data
from Medicare FQHC cost reports and Medicare FQHC claims. Each option
was evaluated to determine which approach would result in the most
appropriate payment structure with the least amount of reporting
requirements and administrative burden for the FQHCs.
One approach we considered would align payment for FQHCs with
payment for services typically furnished in physician offices, making
separate payment for each coded service and adopting the relative
values from the PFS. While this approach follows established payment
policy for services furnished in an outpatient clinic setting, it
unbundles a FQHC encounter-based payment into a fee schedule structure,
which could encourage excess utilization in the long-term, and would
increase coding and billing requirements for FQHCs.
Another approach for the PPS would be to pay a single encounter-
based rate per beneficiary per day. The encounter-based rate would be
based on an average cost per visit, which would be calculated by
aggregating the data for all FQHCs and dividing their total costs by
their total visits incurred during a specified time period. An
encounter-based payment rate is consistent with the agency's commitment
to greater bundling of services, which gives FQHCs the flexibility to
implement efficiencies to reduce over-utilization of services. FQHCs
are accustomed to billing for a single visit, as they are currently
paid through an AIR that is based on a FQHC's own average cost per
visit. An encounter-based payment is also similar to Medicaid payment
systems, and Medicaid constitutes a large portion of FQHC billing
(approximately 47 percent, compared to
[[Page 58392]]
approximately 9 percent for Medicare). We believe an encounter-based
payment rate for the FQHC PPS would provide appropriate payment while
remaining administratively simple. Therefore, we propose an encounter-
based rate per beneficiary per day as the basis for payment under the
proposed FQHC PPS. Additional details regarding the encounter-based
rate setting methodology, including adjustments to the encounter-based
rate, are discussed in section II. C. of this proposed rule.
2. Medicare FQHC Cost Reports
As required by section 1834(o)(2)(B)(i) of the Act, initial
payments (Medicare and coinsurance) under the FQHC PPS must equal 100
percent of the estimated amount of reasonable costs, as determined
without the application of the current system's UPLs or productivity
standards that can reduce a FQHC's per visit rate. In order to estimate
100 percent of reasonable costs, we obtained Medicare cost report data
for free-standing FQHCs (Form CMS 222-92) from the March 31, 2013,
Healthcare Cost Report Information System (HCRIS) quarterly update. We
included in our analysis FQHC costs reports that had allowable costs
(excluding pneumococcal and influenza vaccines) and Medicare visits,
and we used one cost report for each FQHC cost reporting entity. For 69
percent of cost reporting entities, the only available cost report
covered 1 full year (with cost reporting periods ending between June
30, 2011 and June 30, 2012). For the remaining 31 percent of cost
reporting entities, there were multiple cost reports available or the
cost reporting period was not exactly 1 year. For cost reporting
entities with multiple cost reports available, we selected the most
recent cost report, unless an earlier cost report provided us with a
better match to the FQHC claims data that was used to model potential
adjustments. Because FQHCs with multiple sites can file consolidated
cost reports, we also ensured that we selected only one cost report for
each delivery site.
As required by statute, we estimated 100 percent of reasonable
costs that would have occurred for this period prior to the application
of copayments, per visit limits, or productivity adjustments (see
discussion of the baseline for the PPS in section II. D. of this
proposed rule). We also note that, under section 1833(c) of the Act,
outpatient mental health services will be paid on the same basis as
other Part B services as of January 1, 2014. As the FQHC PPS is to be
implemented for cost reporting periods beginning on or after October 1,
2014, we adjusted the cost report data to remove the application of the
outpatient mental health limitations that were in effect when these
reported services were incurred.
After eliminating the current payment limits and adjustments, we
calculated the average cost per visit for each cost reporting entity by
dividing the total estimated Medicare costs (excluding vaccines)
reported by the total number of Medicare visits reported. We found that
the mean cost per visit for all cost reporting entities was about 11
percent higher than the median cost per visit.
In developing the FQHC PPS, section 1834(o)(1)(A) of the Act allows
for adjustments determined appropriate by the Secretary. Consistent
with this authority, we excluded statistical outliers from the sample.
We identified all cost reporting entities with an average cost per
visit that was greater than three standard deviations above or below
the geometric mean of the overall average cost per visit among cost
reporting entities, and we excluded their data from our sample. In the
aggregate, after trimming the data for outliers and before adjustments
for price inflation, we estimate that eliminating current payment
limits and adjustments would increase payments to FQHCs by about 28
percent. For additional information on the impact of the FQHC PPS, see
section VII. of this proposed rule.
3. Medicare FQHC Claims
In developing the Medicare FQHC PPS, section 1834(o)(1)(A) of the
Act requires us to take into account the type, intensity, and duration
of FQHC services, and allows other adjustments, such as geographic
adjustments. Section 1834(o)(1)(B) of the Act also granted the
Secretary of HHS (the Secretary) the authority to require FQHCs to
submit such information as may be required in order to develop and
implement the Medicare FQHC PPS, including the reporting of services
using HCPCS codes. The provision requires that the Secretary impose
this data collection submission requirement no later than January 1,
2011.
Beginning with dates of service on or after January 1, 2011, when
billing Medicare, FQHCs are required to report all pertinent services
provided and list the appropriate HCPCS code for each line item along
with revenue code(s) for each FQHC visit. The additional line item(s)
and HCPCS code reporting were for informational and data gathering
purposes to inform development of the PPS rates and potential
adjustments. Other than for calculating the amount of coinsurance to
waive for preventive services for which the coinsurance is waived,
these HCPCS codes are not utilized to determine current Medicare
payment to FQHCs. We propose to use the HCPCS codes in the FQHC claims
data to support the development of the FQHC PPS rate and adjustments
and for making payment under the PPS.
In order to model potential adjustments, we obtained final action
Medicare FQHC claims (type of bill 73X and 77X) from the CMS Integrated
Data Repository (IDR) with dates of service between January 2010 and
December 2012. We excluded claims that did not list a revenue code or
HCPCS code that represented a face-to-face encounter, as these services
would not qualify for an AIR payment. We also excluded claim lines with
revenue codes that did not correspond to FQHC services or that lacked
valid HCPCS codes.
In 2011, approximately 90 percent of FQHC claims listed a single
HCPCS code that defined the overall type of encounter (for example, a
mid-level office visit (HCPCS code 99213)). We found similar reporting
trends in 2012 FQHC claims. We sought to validate the completeness of
HCPCS reporting by analyzing coding on primary care physician claims
for PFS data. When compared, the findings from the simulated PFS data
and actual FQHC data were similar in the type and distribution of the
reported encounter code (that is, the HCPCS code that represents the
visit that qualifies the FQHC encounter for an AIR payment). When
ancillary services (services that are not separately billable in a
FQHC) were billed with an office visit code, both FQHC and analogous
primary care physician office claims demonstrated a tendency to include
only one to two ancillary services in addition to the encounter code
about 35 percent of the time, and FQHCs billed only a single ancillary
service about 10 percent of the time.
We believe that the reporting trends in the FQHC claims are
consistent with the coding of analogous primary care physician office
claims, thereby suggesting that the limited number of ancillary
services listed on FQHC claims appropriately describe the services
furnished during an encounter.
4. Linking Cost Reports and Claims To Compute the Average Cost per
Visit
In order to compute the adjusted charges or ``estimated cost'' for
determining the average cost per visit, we linked claims to cost
reports by delivery site, as determined by the CMS Certification Number
(CCN) reported on the claim. Since the HCPCS code reporting requirement
on claims did not go into effect until January 1, 2011,
[[Page 58393]]
claims for earlier dates of service did not include the detail required
to model adjustments based on type, intensity, or duration of services.
Cost reports with reporting periods that began on or after January 1,
2011, accounted for 81 percent of the sample, and we linked these cost
reports to Medicare FQHC claims with service dates that matched their
respective cost reporting periods. For cost reports that were at least
1 full year in length and with a cost reporting period that began in
2010, we linked these cost reports to 2011 Medicare FQHC claims.
The linked cost report and claims data were then used to calculate
a cost-to-charge ratio (CCR) for each cost-reporting entity. To
approximate data not available on the cost report, we developed these
CCRs to convert each FQHC's charge data, as found on its claims, to
costs. We calculated an average cost per visit by dividing the total
allowable costs (excluding pneumococcal and influenza vaccinations) by
the total number of visits reported on the cost report. We calculated
an average charge per visit by dividing the total charges of all visits
for all sites under a cost-reporting entity and dividing that sum by
the total number of visits for that cost-reporting entity. We
calculated a cost-reporting entity-specific CCR by dividing the average
cost per visit (based on cost report data) by the average charge per
visit (based on claims data). We multiplied the submitted charges for
each claim by these cost-reporting entity-specific CCRs to estimate
FQHC costs per visit. We note that other Medicare payment systems
calculate CCRs based on total costs and total charges reported on
Medicare cost reports. However, this information is not currently
available on the free-standing FQHC cost report, Form CMS-222-92.
We found that the mean estimated cost per visit in the linked
claims data was about 9 percent higher than the median estimated cost
per visit. In developing the FQHC PPS, section 1834(o)(1)(A) of the Act
allows for adjustments determined appropriate by the Secretary.
Consistent with this authority, we excluded statistical outliers from
the linked claims sample. We identified visits with estimated costs
that were greater than three standard deviations above or below the
geometric mean of the overall average estimated cost per visit, and we
excluded those visits from our sample.
After trimming the linked claims data for outliers, the final data
set included 5,245,961 visits from 5,236,607 distinct claims
encompassing 6,135,830 claim lines. This included 5,223,512 daily
visits furnished to 1,244,873 beneficiaries that visited 3,509 delivery
sites under 1,141 cost-reporting entities.
B. Policy Considerations for Developing the FQHC PPS Rates and
Adjustments
In developing the FQHC PPS rates and adjustments, we considered
existing payment policies to determine potential interactions with the
implementation of the FQHC PPS. We discuss these policies and our
proposed changes below.
1. Multiple Visits on the Same Day
The current all-inclusive payment system was designed to reimburse
FQHCs for services furnished to Medicare beneficiaries at a rate that
would take into account all costs associated with the provision of
services (for example, space, supplies, practitioners, etc.) and
reflect the aggregate costs of providing services over a period of
time. In some cases, the per visit rate for a specific service is
higher than what would be paid based on the PFS, and in some cases it
is lower than what would be paid based on the PFS, but at the end of
the reporting year when the cost report is settled, the Medicare
payment is typically higher for FQHCs than if the services were billed
separately on the PFS.
The current payment system was also designed to minimize reporting
requirements, and as such, the all-inclusive payment reflects all the
services that a FQHC provides in a single day to an individual
beneficiary, regardless of the length or complexity of the visit or the
number or type of practitioners seen. This would include situations
where a FQHC patient has a medically-necessary face-to-face visit with
a FQHC practitioner, and is then seen by another FQHC practitioner,
including a specialist, for further evaluation of the same condition on
the same day, or is then seen by another FQHC practitioner (including a
specialist) for evaluation of a different condition on the same day.
Except for certain preventive services that have coinsurance
requirements waived, FQHCs have not been required to submit coding of
each service in order to determine Medicare payment.
Although the all-inclusive payment system was designed to provide
enhanced reimbursement that reflects the costs associated with a visit
in a single day by a Medicare beneficiary, an exception to the one
encounter payment per day policy was made for situations when a patient
comes into the FQHC for a medically-necessary visit, and after leaving
the FQHC, has a medical issue that was not present at the visit earlier
that day, such as an injury or unexpected onset of illness. In these
situations, the FQHC has been permitted to be paid separately for two
visits on the same day for the same beneficiary.
In response to a comment to the June 12, 1992 final rule with
comment period (57 FR 24961), in the April 3, 1996 final rule (61 FR
14640), we revised the regulations to allow separate payment for mental
health services furnished on the same day as a medical visit. The CY
2007 PFS final rule (71 FR 69665) subsequently revised the regulations
to allow FQHCs to receive separate payment for DSMT and MNT. The
ability to bill separately for Medicare's IPPE is in manuals only and
not in regulation, with the manual language noting this is a once in a
lifetime benefit. There are no statutory requirements to pay FQHCs
separately for these services when they occur on the same day as
another billable visit.
In developing the new PPS for FQHCs, we reviewed all existing
policies for FQHC payments to determine if the policies should remain
the same as under the current system, or if the policies should be
updated or in some cases revised. As part of this process, we reviewed
the existing regulations and policies that allow separate payment for
subsequent illness or injury, mental health services, DSMT/MNT, or IPPE
when they occur on the same day as an otherwise billable visit. To do
this, we examined 2011 Medicare FQHC claims data in order to determine
the frequency of FQHCs billing for more than one visit per day for a
beneficiary. We then analyzed the potential financial impact on FQHCs
and the potential impact on access to care if billing for more than 1
visit per day for these specific situations was no longer permitted. We
also considered several alternative options, such as an adjustment of
the per visit rate when multiple visits occur in the same day, or the
establishment of a separate per visit rate for subsequent visit due to
illness or injury, mental health services, DSMT/MNT, or IPPE.
An analysis of data from Medicare FQHC claims with dates of service
between January 1, 2011 and June 30, 2012, indicate that it is uncommon
for FQHCs to bill more than one visit per day for the same beneficiary
(less than 0.5 percent of all visits), even though the ability to do so
has been in place since 1992 for subsequent illness/injury, since 1996
for mental health services, and since 2007 for DSMT/MNT. Even allowing
for any underreporting in the data, it is clear that billing multiple
visits on the same day for an individual
[[Page 58394]]
is a rare event, and eliminating the ability to do so would not
significantly impact either the FQHC payment or a beneficiary's access
to care. Eliminating this ability to bill for multiple visits on the
same day would also simplify billing by removing the need for modifier
59, which signifies that the conditions being treated are totally
unrelated and services are provided at separate times of the day, and
the subsequent claims review that occurs when modifier 59 appears on a
claim.
Because the data show that multiple visits are infrequently
occurring on the same day, we determined that the level of effort
required to develop an adjustment or a separate rate for each of these
services when furnished on the same day as a medical visit would not be
justified. Therefore, we are proposing to revise Sec. 405.2463(b) to
remove the exception to the single encounter payment per day for FQHCs
paid under the proposed PPS. This policy is consistent with an all-
inclusive methodology and reasonable cost principles and would simplify
billing and payment procedures. Thus, the proposed PPS encounter rate
will also reflect a daily (per diem) rate and result in a slightly
higher payment than one calculated based on multiple encounters on the
same day.
Based on the Medicare claims data provided by FQHCs that indicates
a very low occurrence of multiple visits billed on the same day, we
believe this proposal would not significantly impact total payment or
access to care. However, we understand that there may be many possible
reasons why the rate of billing for more than one visit per day has
been low (for example. difficulty in scheduling more than one type of
visit on the same day) and that FQHCs can provide integrated, patient-
centered health care services in a variety of ways. Therefore, we are
interested in comments that address whether there are factors that we
have not considered, particularly in regards to the provision of mental
health services. We invite public comment on whether this change would
impact access to these services or the integration of services in
underserved communities. The benefits of retaining the ability to bill
for more than one visit on the same day should be considered along with
the proposed increased per diem payment rate under the PPS and the
complexity of developing a claims processing system to allow for this
exception in the new PPS.
2. Preventive Laboratory Services and Technical Components of Other
Preventive Services
The core services of the FQHC benefit are generally billed under
the professional component. The benefit categories for laboratory
services and diagnostic tests generally are not within the scope of the
FQHC benefit, as defined under section 1861(aa) of the Act. For
services that can be split into professional and technical components,
we have instructed FQHCs to bill the professional component as part of
the AIR, and separately bill the Part B MAC under different
identification for the technical portion of the service on a Part B
practitioner claim (for example, Form CMS-1500). If the FQHC operates a
laboratory, is enrolled under Medicare Part B as a supplier, and meets
all applicable Medicare requirements related to billing for laboratory
services, it may be able to bill as a supplier furnishing laboratory
services under Medicare Part B. When FQHCs separately bill these
services, they are instructed to adjust their cost reports and carve
out the cost of associated space, equipment, supplies, facility
overhead, and personnel for these services.
As part of the implementation of the FQHC benefit, we used our
regulatory authority to enumerate preventive primary services, as
defined in 42 CFR 405.2448, which may be paid for when provided by
FQHCs (57 FR 24980, June 12, 1992, as amended by 61 FR 14657, April 3,
1996). These preventive primary services include a number of laboratory
tests, such as cholesterol screening, stool testing for occult blood,
dipstick urinalysis, tuberculosis testing for high risk patients, and
thyroid function tests. The preventive services added to the FQHC
benefit pursuant to the Affordable Care Act, as defined by section
1861(ddd)(3) of the Act and codified in 42 CFR 405.2449, include
laboratory test and diagnostic services, such as screening mammography,
diabetes screening tests, and cardiovascular screening blood tests.
Professional services or professional components of primary
preventive services (as defined in Sec. 405.2448) and preventive
services (as defined in Sec. 405.2449) are billed as part of the AIR.
The preventive laboratory tests and technical components of other
preventive tests are not paid under the AIR and FQHCs are instructed to
bill separately for these services. We are not proposing a change in
billing procedures, and we do not intend to include payment for these
services under the FQHC PPS. We note this payment structure simplifies
billing procedures as laboratory tests and technical components of
diagnostic services are always billed separately to Part B and are
never included as part of the FQHC's encounter rate. (Note that both
the professional and technical components of FQHC primary preventive
services and preventive services remain covered under Part B).
An analysis of FQHC claims indicates that FQHCs are listing some
preventive laboratory tests and diagnostic services on their claims. In
2011 through 2012, less than 5 percent of Medicare FQHC claims listed
HCPCS codes related to laboratory tests or diagnostic services. For
purposes of modeling adjustments to the FQHC PPS rate, we considered
excluding these line items from the encounter charge and
proportionately reducing the cost-reporting entity's related cost
report data. However, it was not always clear whether the line item
charges for these laboratory tests or diagnostic services were included
in the total charge for the claim or were listed for informational
purposes only. As such, we chose not to adjust the claims or cost
report data based on the presence of the related HCPCS codes on the
claims. As part of the implementation of the FQHC PPS, we plan to
clarify the appropriate billing procedures through program instruction.
3. Vaccine Costs
Section 1834(o)(2)(B)(i) of the Act requires that the initial PPS
rates must be set so as to equal in the aggregate 100 percent of the
estimated amount of reasonable costs that would have occurred for the
year if the PPS had not been implemented. This 100 percent must be
calculated prior to application of copayments, per visit limits, or
productivity adjustments. We believe that this language directed us to
develop a PPS to pay for items currently affected by the UPL and the
productivity screen, which would pay for items currently included in
the calculation of reasonable costs and paid under the AIR.
The administration and payment of influenza and pneumococcal
vaccines is not included in the AIR. They are paid at 100 percent of
reasonable costs through the cost report. The cost and administration
of HBV is covered under the FQHC's AIR when furnished as part of an
otherwise qualifying encounter. We are not proposing any changes to
this payment structure. We would continue to pay for the costs of the
influenza and pneumococcal vaccines and their administration through
the cost report, and other Medicare-covered
[[Page 58395]]
vaccines as part of the encounter rate. The costs of hepatitis B
vaccine and its administration were included in the calculation of
reasonable costs used to develop the FQHC PPS rates, and we would pay
for these services under the FQHC PPS when furnished as part of an
otherwise qualifying encounter.
C. Risk Adjustments
Section 1834(o)(1)(A) of the Act provides that the FQHC PPS may
include adjustments, including geographic adjustments, that are
determined appropriate by the Secretary. We discuss our proposed
adjustments below.
1. Alternative Calculations for Average Cost per Visit
As discussed in section II. of this proposed rule, we used the
claims data to calculate an average cost per visit by dividing the
total estimated costs ($788,547,531) by the total number of daily
visits (5,223,512).
Average cost per daily visit = $788,547,531/5,223,512 = $150.96
We also examined how the average cost per visit would differ under
current policy, which allows separate payment for subsequent illness or
injury, mental health services, DSMT/MNT or IPPE when they occur on the
same day as an otherwise billable visit. While the total estimated cost
was the same ($788,547,531), the total number of visits in the
denominator (5,245,961) did not combine multiple visits on the same day
of service into 1 daily visit.
Average cost per visit = $788,547,531/5,245,961 = $150.32
We also derived an average cost per visit from the cost reports by
dividing the total estimated Medicare costs (excluding vaccines)
reported ($832,387,663) by the total number of Medicare visits reported
(5,374,217). Unlike the previous calculations based on claims data, the
variables derived from the cost reports summarize total costs and
visits by cost reporting entity and could not be trimmed of individual
visits with outlier values. Also, we note that the total number of
Medicare visits reported on the cost reports reflects current policy
which allows for multiple visits on the same day of service, and we
could not calculate an average cost per daily visit using only cost
report data.
Average cost per visit from cost report data = $832,387,663/5,374,217 =
$154.89
Consistent with our proposal to remove the exception to the single
encounter payment per day, we propose to use the average cost per daily
visit of $150.96, as calculated based on adjusted claims data as the
PPS rate prior to any risk adjustment. We note that the alternative
calculations yield an average cost per visit that differs from $150.96
by less than 3 percent. We also note that these calculations were
derived based on the cost report and claims data available during our
development of this proposed rule and are subject to change in the
final rule based on more current data.
2. Geographic Adjustment Factor
We propose to adjust the FQHC PPS rate for geographic differences.
This adjustment will be made to the cost of inputs by applying an
adaptation of the GPCIs used to adjust payment under the PFS.
Established in 1848(e) of the Act, GPCIs adjust payments for geographic
variation in the costs of providing services and consist of three
component GPCIs: the physician work GPCI, the practice expense GPCI,
and the malpractice insurance GPCI.
Because FQHCs furnish services that are analogous to those
furnished by physicians in outpatient clinic settings, we believe it
would be consistent to apply geographic adjustments similar to those
applied to services furnished under the PFS. We calculated a geographic
adjustment factor (GAF) for each encounter based on the delivery site's
locality using the proposed CY 2014 work and practice expense GPCIs and
the proposed cost share weights for the CY 2014 GPCI update, as
published in the CY 2014 PFS proposed rule (July 19, 2013 (78 FR
43282)).
For modeling geographic adjustments for this FQHC PPS proposed
rule, we did not use the proposed CY 2015 work and practice expense
GPCIs that also were published in the CY 2014 PFS proposed rule. We
note that the FQHC PPS GAFs are subject to change in the final FQHC PPS
rule based on more current data, including the finalized PFS GPCI and
cost share weight values.
We excluded the PFS malpractice GPCI from the calculation of the
GAF as FQHCs that receive section 330 grant funds are eligible to apply
for medical malpractice coverage under FSHCAA of 1992 and FSHCAA of
1995. Without the cost share weight for the malpractice GPCI, the sum
of the proposed PFS work and PE cost share weights (0.50866 and
0.44839, respectively) is less than one. In calculating the FQHC GAFs,
prior to applying the proposed work and PE cost share weights to the
GPCIs, we scaled these proposed cost share weights so they would total
100 percent while still retaining weights relative to each other
(0.53149 and 0.46851, respectively).
We calculated each locality's GAF as follows:
Geographic adjustment factor = (0.53149 x Work GPCI) + (0.46851 x PE
GPCI)
We included the GAF adjustment when modeling all other potential
adjustments. The GAF will be applied based on where the services are
furnished and may vary among FQHCs that are part of the same
organization. The list of proposed GAFs by locality is in Addendum A of
this proposed rule and is also available as a downloadable file at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FQHCPPS/.
3. New Patient or Initial Medicare Visit
Based on an analysis of claims data, we found that the estimated
cost per encounter was approximately 33 percent higher when a FQHC
furnished care to a patient that was new to the FQHC or to a
beneficiary receiving a comprehensive initial Medicare visit (that is,
an IPPE or an initial AWV). We propose to adjust the encounter rate to
reflect the 33 percent increase in costs when FQHCs furnish care to new
patients or when they furnish a comprehensive initial Medicare visit,
which could account for the greater intensity and resource use
associated with these types of services. Our proposed risk adjustment
factor is 1.3333 (as discussed further in section V. of this proposed
rule).
4. Other Adjustment Factors Considered
We considered multiple other adjustments such as demographics (age
and sex), clinical conditions, duration of the encounter, etc. However,
we found many of these other adjustments to have limited impact on
costs or to be too complex and largely unnecessary for the FQHC PPS.
We modeled whether there were differences in resource use for
mental health visits and preventive care visits when compared to
medical care visits. We found that mental health encounters had
approximately 1 percent lower estimated costs per visit relative to
medical care visits, and we did not consider this a sufficient basis
for proposing a payment adjustment. We found that preventive care
encounters had approximately 18 percent higher estimated costs per
visit. This difference in resource use declines to an 8 percent higher
estimated cost per visit after adjusting for the GAF and the proposed
1.3333 risk adjustment factor for a patient that is new to the FQHC or
for
[[Page 58396]]
a beneficiary receiving a comprehensive initial Medicare visit (that
is, an IPPE or an initial AWV), indicating that a significant amount of
preventive care visits were IPPEs or initial AWVs. We are not proposing
a payment reduction for preventive care encounters and we note that a
significant amount of the more costly preventive care encounters would
otherwise be recognized and paid for with the proposed 1.3333 risk
adjustment factor for a beneficiary receiving a comprehensive initial
Medicare visit. We note that an 8 percent adjustment would increase
payment for preventive visits, and we welcome comments on whether an
adjustment for preventive care encounters would be appropriate, noting
that there would be redistributive effect which would result in a
decrease in the payment rate for other visits.
We considered patient age and sex as potential adjustment factors
as these demographic characteristics have the advantage of being
objectively defined. However, both of these characteristics had a
limited association with estimated costs, which did not support the use
of these demographic characteristics as potential adjustment factors.
We tested for an association between commonly reported clinical
conditions and the estimated cost per visit. A number of clinical
conditions were found to be associated with approximately 5 to 10
percent higher costs per visit, but we are concerned that claims might
not include all potentially relevant secondary diagnoses. In addition,
we would need to consider how to minimize the complexity of such an
adjustment with a limited number of clinically meaningful groupings.
We considered the duration of encounters (in minutes) as a
potential adjustment factor. Many of the evaluation and management (E/
M) codes commonly seen on FQHC claims are associated with average or
typical times, and there was a strong association between these
associated times and the estimated cost per encounter. However, these
minutes are guidelines that reflect the face-to-face time between the
FQHC practitioner and the beneficiary for that E/M service, and they
would not indicate the total duration of the FQHC encounter. Moreover,
many of the codes used to describe the face-to-face visit that
qualifies an encounter, such as a subsequent annual wellness visit, are
not associated with average or typical times.
We considered adjusting payment based on the types of services
furnished during a FQHC encounter. Our analysis of FQHC claims data
indicates that information regarding ancillary services provided by
FQHCs appears to be limited. As a result, there is a risk that
adjustments for the types of services being provided would be based on
incomplete information and result in payments under the PPS that do not
accurately reflect the cost of providing those services.
5. Report on PPS Design and Models
We contracted with Arbor Research for Collaborative Health to
assist us in designing a PPS for FQHCs. Arbor Research modeled options
for calculating payment rates and adjustments under a PPS based on data
from Medicare FQHC cost reports and Medicare FQHC claims. A report
detailing the options modeled in the development of the PPS will be
available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FQHCPPS/.
D. Base Rate Calculation
We calculated a base rate for the FQHC PPS by adjusting the average
cost per visit to account for the proposed adjustment factors. We
calculated an average payment multiplier using the average GAF (0.9944)
multiplied by the average risk adjustment for non-new patient/initial
visits (1.0), as weighted by the percent of encounters that represented
non new patient/initial visits (0.9722), and we added this to the
average GAF (0.9944) multiplied by the average risk adjustment for new
patient/initial visits (1.3333), as weighted by the percent of
encounters that represented new patient/initial visits (0.0278):
Average payment multiplier = 0.9721(1.00)(0.9944) +
0.0279(1.3333)(0.9944) = 1.0036
We calculated a base rate amount by multiplying the reciprocal of
the average payment multiplier by the average cost per visit. Using the
average cost per daily visit:
Base rate per daily visit = $150.96 x (1/1.0036) = $150.42
The base rate per daily visit of $150.42 reflects costs through
June 30, 2012, and does not include an adjustment for price inflation.
As the FQHC PPS is to be implemented beginning October 1, 2014, we
propose to update the base rate to account for the price inflation
through September 30, 2014. We propose to use the MEI as finalized in
the CY 2011 PFS final rule (75 FR 73262 through 73270). The MEI is an
index reflecting the weighted-average annual price change for various
inputs involved in furnishing physicians' services. The MEI is a fixed-
weight input price index, with an adjustment for the change in economy-
wide, private nonfarm business multifactor productivity.
We propose to inflate the base rate by approximately 1.8 percent,
reflecting the growth in the MEI from July 1, 2012 through September
30, 2014. We also propose to use a forecasted MEI update of 1.7 percent
for the 15-month period of October 1, 2014, through December 31, 2015,
to calculate the first year's base payment amount under the PPS. The
15-month update factor is based on the 2013Q2 forecast of the 2006-
based MEI, the most recent forecast available at the time of this
proposed rule. The adjusted base payment that reflects the MEI
historical updates and forecasted updates to the MEI is $155.90. This
payment rate incorporates a combined MEI update factor of 1.0364 that
trends dollars forward from July 1, 2012 through December 31, 2015. We
also propose if more recent data became available (for example, a more
recent estimate of the FY 2006-based MEI), we would use such data, if
appropriate, to determine the 15-month FQHC PPS update factor for the
final rule.
Table 1--Base Rate per Daily Visit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated base rate
Total estimated Daily encounters Average payment Average cost per without adjustment MEI update factor MEI-adjusted base
costs multiplier daily visit for price inflation payment rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
$788,547,531 5,223,512 1.0036 $150.96 $150.42 1.0364 $155.90
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 58397]]
MEI-adjusted base payment rate = $150.96 x (1/1.0036) x 1.0364 =
$155.90
Thus, we propose a base payment rate of $155.90 per beneficiary per
day for the proposed FQHC PPS. We note that this base rate is subject
to change in the final rule based on more current data. (See the Impact
Analysis in section VII of this proposed rule for comparisons of the
PPS rates to payments under the AIR.)
Payments to FQHCs would be calculated as follows:
Base payment rate x GAF = PPS payment
In calculating the payment, the proposed base payment rate is
$155.90, and the GAF would be based on the locality of the delivery
site. (See section II.C. of this proposed rule for a discussion of the
GAF and the Addendum to this proposed rule for the list of proposed
GAFs.)
If the patient is new to the FQHC, or the FQHC is furnishing an
initial comprehensive Medicare visit, the payment would be calculated
as follows:
Base payment rate x GAF x 1.3333 = PPS payment
In calculating the payment, 1.3333 represents the risk adjustment
factor applied to the PPS payment when FQHCs furnish care to new
patients or when they furnish a comprehensive initial Medicare visit.
(See section II.C. of this proposed rule for a discussion of the risk
adjustment for new patients or initial comprehensive Medicare visits.)
E. Implementation
1. Transition Period and Annual Adjustment
Section 1834(o)(2) of the Act requires implementation of the FQHC
PPS for FQHCs with cost reporting periods beginning on or after October
1, 2014. Cost reporting periods are typically 12 months, and do not
usually exceed 13 months. Therefore, we expect that all FQHCs would be
transitioned to the PPS by the end of 2015, or 15 months after the
October 1, 2014 implementation date.
FQHCs would transition into the PPS based on their cost reporting
periods. We note that a change in cost reporting periods that is made
primarily to maximize reimbursement would not be acceptable under
established cost reporting policy (see 42 CFR 413.24(f)(3) and the
Provider Reimbursement Manual Part I, section 2414, and Part II,
section 102.3). The claims processing system will maintain the current
system and the PPS until all FQHCs have transitioned to the PPS.
We propose to transition the PPS to a calendar year update for all
FQHCs, beginning January 1, 2016, because many of the PFS files we are
proposing to use are updated on a calendar year basis. Section
1834(o)(2)(B)(ii)(I) of the Act requires us to adjust the FQHC PPS rate
by the percentage increase in the MEI for the first year after
implementation. However, while transitioning the PPS to a calendar
year, we propose to defer the first MEI statutory adjustment to the PPS
rate from October 1, 2015, to December 31, 2015 (we note that our
proposed base payment rate incorporates a forecasted percentage
increase in the MEI through December 31, 2015).
2. Medicare Claims Payment
Claims processing systems would need to be revised through program
instruction to accommodate the new rate and associated adjustments.
Medicare currently pays 80 percent of the AIR for all FQHC claims,
except for mental health services that are subject to the mental health
payment limit. Section 1833(a)(1)(z) of the Act requires that Medicare
payment under the FQHC PPS should be 80 percent of the lesser of the
provider's charge or the PPS rate. We are considering revisions to the
claims processing system that would reject claims in which the
qualifying visit describes a service that is outside of the FQHC
benefit, such as inpatient hospital E/M services or group sessions of
DSMT and MNT. We are considering revisions that would reject line items
for technical components such as x-rays, laboratory tests, and durable
medical equipment which will not be paid as part of the FQHC PPS and
would be billed separately to Medicare Part B. We also are considering
revisions that would allow for the informational reporting of influenza
and pneumococcal vaccines and their administration, while excluding the
line item charges, as these items would continue to be paid through the
cost report.
3. Beneficiary Coinsurance
Section 1833(a)(1)(Z) of the Act requires that FQHCs be paid up to
80 percent of their reasonable costs by Medicare after subtracting
beneficiary coinsurance. Under the current reasonable cost payment
system, beneficiary coinsurance for FQHC services is assessed based on
the FQHC's charge, which can be more than coinsurance based on the AIR,
which is based on costs. An analysis of a sample of FQHC claims data
for dates of service between January 1, 2011 through June 30, 2012
indicated that beneficiary coinsurance based on 20 percent of the
FQHCs' charges was approximately $23 million higher, or 18 percent
more, than if coinsurance had been assessed based on 20 percent of the
lesser of the FQHC's charge or the applicable all-inclusive rate.
Section 1833(a)(1)(Z) of the Act requires that Medicare payment
under the FQHC PPS should be 80 percent of the lesser of the actual
charge or the PPS rate. The statute makes no specific provision to
revise the coinsurance. We propose that coinsurance would be 20 percent
of the lesser of the FQHC's charge or the PPS rate. We believe that the
proposal to change the method to determine coinsurance is consistent
with the statutory change to the FQHC Medicare payment and is
consistent with statutory language in section 1866(a)(2)(A) and
1833(a)(3)(A) of the Act and elsewhere that addresses coinsurance
amounts and Medicare cost principles. If finalized, total payment to
the FQHC, including both Medicare and beneficiary liability, would not
exceed the FQHC's charge or the PPS rate.
4. Waiving Coinsurance for Preventive Services
Effective January 1, 2011, Medicare waives beneficiary coinsurance
for eligible preventive services furnished by a FQHC. Medicare requires
detailed HCPCS coding on FQHC claims to ensure that coinsurance is not
applied to the line item charges for these preventive services.
For FQHC claims that include a mix of preventive and non-preventive
services, we propose that Medicare contractors compare payment based on
the FQHC's charge to payments based on the PPS encounter rate and pay
the lesser amount. However, the current approach to waiving coinsurance
for preventive services, which relies solely on FQHC reported charges,
would be insufficient under the FQHC PPS. As Medicare payment under the
FQHC PPS is required to be 80 percent of the lesser of the FQHCs charge
or the PPS rate, we also need to determine the coinsurance waiver for
payments based on the PPS rate.
We considered using the proportion of the FQHC's line item charges
for preventive services to total claim charges to determine the
proportion of the FQHC PPS rate that would not be subject to
coinsurance. This approach would preserve the encounter-based rate
while basing the coinsurance reduction on each FQHC's relative
assessment of resources for preventive services. However, the charge
structure among
[[Page 58398]]
FQHCs varies, and beneficiary liability for the same mix of FQHC
services could differ significantly based on the differences in charge
structures.
Where preventive services are coded on a claim, we propose to use
payments under the PFS to determine the proportional amount of
coinsurance that should be waived for payments based on the PPS
encounter rate. While physician-administered Part B drugs and routine
venipuncture will be paid under the FQHC PPS rate, we note that the
Medicare Part B rates for these items are not included in the PFS
payment files. Therefore, when determining this proportionality of
payments, we would also consider PFS payment limits for Part B drugs,
as listed in the Medicare Part B Drug Pricing File, and the national
payment amount for routine venipuncture (HCPCS 36415). Although FQHCs
might list HCPCS for which we do not publish a payment rate in these
files, a review of 2011 claims data indicated that the vast majority of
line items with HCPCS representing services that will be paid under the
FQHC PPS were priced in these sources. As such, we believe that
referencing only the payment rates listed in these sources would be
both sufficient and appropriate for determining the amount of
coinsurance to waive for preventive services provided in FQHCs, without
changing the total payment (Medicare and coinsurance). Since Medicare
payment under the FQHC PPS is required to be 80 percent of the lesser
of the FQHC's charges or the PPS rate, we would continue to use FQHC-
reported charges to determine the amount of coinsurance that should be
waived for payments based on the FQHC's charge. Total payment to the
FQHC, including both Medicare and beneficiary liability, would not
exceed the FQHC's charge or the PPS rate.
Our proposed approach for waiving coinsurance for preventive
services preserves an encounter-based rate, and the calculation is
similar to the current coinsurance calculation based on charges.
However, this calculation is fairly complex for the claims processing
systems. It may also be difficult for providers to replicate, and FQHCs
might not know how much coinsurance would be assessed before the MAC
issues the remittance advice.
As an alternative approach, we considered unbundling all services
when a FQHC claim includes a mix of preventive and non-preventive
services, and we would exclude these types of claims from calculation
of the FQHC base encounter rate. We would use payments under the
Medicare PFS to pay separately for every service listed on the claim.
While this approach is inconsistent with an all-inclusive payment, it
would simplify waiving coinsurance for preventive services and pay
preventive services comparably to PFS settings. However, the vast
majority of FQHC claims list only one HCPCS, and unbundling all
services introduces coding complexity that might underpay FQHCs for an
encounter if they do not code all furnished ancillary services. In
addition, payment for preventive services under the PFS will be less,
in many cases, than the PPS encounter rate.
Instead of unbundling all services when a FQHC claim includes a mix
of preventive and nonpreventive services, we considered the use of PFS
payment rates to pay separately for preventive services billed on the
FQHC claim, while paying for the non-preventive services under the FQHC
PPS rate. However, this would be problematic when the preventive
services represent the service that would qualify the claim as a FQHC
encounter (for example, IPPE, AWV, MNT). Under current payment policy,
the remaining ancillary services would not be eligible for an encounter
payment without an additional, qualifying visit on the same claim.
We also considered using the dollar value of the coinsurance that
would be waived under the PFS to reduce the FQHC encounter-based
coinsurance amount when preventive services appear on the claim.
However, this could lead to anomalous results, such as negative
coinsurance if the preventive service(s) would have been paid more
under the PFS than the FQHC PPS rate, and the amount of coinsurance
waived under the PFS would exceed 20 percent of the FQHC PPS rate. We
also were concerned that the reduction in coinsurance would seem
insufficient if the payment rate for the preventive service(s) was very
low under the PFS.
We believe that using the proportionality of PFS payments to
determine the coinsurance waiver would facilitate the waiving of
coinsurance while preserving the all-inclusive nature of the encounter-
based rate with the least billing complexity. Therefore, we propose
that where preventive services are coded on a claim, we would use
payments under the PFS to determine the proportional amount of
coinsurance that should be waived for payments based on the PPS
encounter rate. We invite public comment on how this proposal would
impact FQHCs' administrative procedures and billing practices.
5. Cost Reporting
Under section 1815(a) of the Act, providers participating in the
Medicare program are required to submit financial and statistical
information to achieve settlement of costs relating to health care
services rendered to Medicare beneficiaries. This information is
required for determining Medicare payment for FQHC services under 42
CFR 405, Subpart X.
The Medicare cost reporting forms show the costs incurred and the
total number of visits for FQHC services during the cost reporting
period. Using this information, the MAC determines the total payment
amount due for covered services furnished to Medicare beneficiaries.
The MAC compares the total payment due with the total payments made for
services furnished during the reporting period. If the total payment
due exceeds the total payments made, the difference is made up by a
lump sum payment. If the total payment due is less than the total
payments made, the overpayment is collected.
Under the FQHC PPS, Medicare payment for FQHC services will be made
based on a predetermined national rate. For services included in the
FQHC PPS rate, Medicare cost reports would not be used to reconcile
Medicare payments with FQHC costs. However, the statute does not exempt
FQHCs from submitting cost reports. In addition, Medicare payments for
the reasonable costs of the influenza and pneumococcal vaccines and
their administration, allowable graduate medical education costs, and
bad debts would continue to be determined and paid through the cost
report. We are also considering revisions to the cost reporting forms
and instructions that would provide us with information that would
improve the quality of our cost estimates, such as the reporting of a
FQHC's overall and Medicare specific CCR. We are also considering the
types of cost data that would facilitate the potential development of a
FQHC market basket that could be used in base payment updates after the
second year of the PPS. We also are exploring whether we have audit
resources to include FQHCs in the pool of institutional providers that
are subject to periodic cost report audits.
6. Medicare Advantage Organizations
Section 10501(i)(3)(C) of the Affordable Care Act added section
1833(a)(3)(B)(i)(II) to the Act to require that FQHCs that contract
with MA organizations be paid at least the same amount they would have
received for the same service under the FQHC PPS.
[[Page 58399]]
This provision ensures FQHCs are paid at least the Medicare amount for
FQHC services, whether such amount is set by section 1833(a)(3) of the
Act or section 1834(o) of the Act. Consistent with current policy, if
the MA organization contract rate is lower than the amount Medicare
would otherwise pay for FQHC services, FQHCs that contract with MA
organizations would receive a wrap-around payment from Medicare to
cover the difference. If the MA organization contract rate is higher
than the amount Medicare would otherwise pay for FQHC services, there
is no additional payment from Medicare. We propose to revise Sec.
405.2469 to reflect this provision.
III. Additional Proposed Changes Regarding FQHCs and RHCs
A. Rural Health Clinic Contracting
Due to the difficulty in recruiting and retaining physicians in
rural areas, RHCs have had the option of hiring physicians either as
RHC employees or as contractors. However, in order to promote stability
and continuity of care, the Rural Health Clinic Services Act of 1977
required RHCs to employ a physician assistant or nurse practitioner
(section 1861(aa)(2)(iii) of the Act). We have interpreted the term
``employ'' to mean that the employer issues a W-2 form to the employee.
Section 405.2468(b)(1) currently states that RHCs are not paid for
services furnished by contracted individuals other than physicians, and
Sec. 491.8(a)(3) does not authorize RHCs to contract with RHC
practitioners other than physicians.
In the more than 30 years since this legislation was enacted, the
health care environment has changed dramatically, and RHCs have
requested that they be allowed to enter into contractual agreements
with non-physician RHC practitioners as well as physicians. To provide
RHCs with greater flexibility in meeting their staffing requirements,
we propose to revise Sec. 405.2468(b)(1) by removing the parenthetical
``RHCs are not paid for services furnished by contracted individuals
other than physicians,'' and revising Sec. 491.8(a)(3) to allow non-
physicians to furnish services under contract in RHCs, when at least
one NP or PA is employed.
The ability to contract with NPs, PAs, CNMs, CP, and CSWs would
provide RHCs with additional flexibility with respect to recruiting and
retaining non-physician practitioners. Practitioners should be employed
or contracted to the RHC in a manner that enhances continuity and
quality of care.
RHCs would still be required, under section 1861(aa)(2)(iii) of the
Act, to employ a PA or NP. However, as long as there is at least one PA
or NP employed at all times (subject to the waiver provision for
existing RHCs set forth at section 1861(aa)(7) of the Act), an RHC
would be free to enter into contracts with other PAs, NPs, CNM, CPs or
CSWs.
B. Technical and Conforming Changes
In addition to proposing to codify the statutory requirements for
the FQHC PPS in this proposed rule and proposing to allow RHCs to
contract with non-physician practitioners, we are proposing edits to
correct terminology, clarify policy, delete irrelevant code, and make
conforming changes for existing mandates and the new PPS. Some of these
changes include the following:
Removing the terms ``fiscal intermediary and carriers''
and replacing them with ``Medicare Administrative Contractor'' or
``MAC''. Section 911 of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 established the MACs to administer the
work that was done by fiscal intermediaries and carriers in
administering Medicare programs.
Removing the payment limitations for treatment of mental
psychoneurotic or personality disorders. This payment limitation is
being phased out and will no longer be in effect beginning January 1,
2014.
Updating the regulations to reflect section 410 of the
Medicare Modernization Act of 2003 to exclude RHC and FQHC services
furnished by physicians and certain other specified types of
nonphysician practitioners from consolidated billing under section
1888(e)(2)(A)(ii) of the Act and allows such services to be separately
billable under Part B when furnished to a SNF resident of a skilled
nursing facility (SNF) during a covered Part A stay (see the July 30,
2004 final rule (69 FR 45818 through 45819). This statutory provision
was effective with services furnished on or after January 1, 2005 and
was previously implemented through program instruction (CMS Pub. 100-
04, Medicare Claims Processing Manual, chapter 6, Sec. 20.1.1).
IV. Clinical Laboratory Improvement Amendments of 1988 (CLIA)--
Enforcement Actions for Proficiency Testing Referral
A. Background
On October 31, 1988, Congress enacted the Clinical Laboratory
Improvement Amendments of 1988 (CLIA), Pub. L. 100-578. The purpose of
CLIA is to ensure the accuracy and reliability of laboratory testing
for all Americans. Under this authority, which was codified at 42
U.S.C. 263a, the Secretary issued regulations implementing CLIA on
February 28, 1992 at 42 CFR part 493 (57 FR 7002). The regulations
specify the standards and specific conditions that must be met to
achieve and maintain CLIA certification. CLIA certification is required
for all laboratories, including but not limited to those that
participate in Medicare and Medicaid, which test human specimens for
the purpose of providing information for the diagnosis, prevention, or
treatment of any disease or impairment, or the assessment of health, of
human beings.
The regulations require laboratories conducting moderate or high-
complexity testing to enroll in an HHS-approved proficiency testing
(PT) program that covers all of the specialties and subspecialties for
which the laboratory is certified and all analyses listed in Subpart I
of the CLIA regulations. As of June 2013, there were 239,922 CLIA
certified laboratories. Of these laboratories, 35,035 are required to
enroll in an HHS-approved PT program and are subject to all PT
regulations.
Congress emphasized the importance of PT when it drafted the CLIA
legislation. For example, in discussing their motivation in enacting
CLIA, the Committee on Energy and Commerce noted that it ``focused
particularly on proficiency testing because it is considered one of the
best measures of laboratory performance'' and that proficiency testing
``is arguably the most important measure, since it reviews actual test
results rather than merely gauging the potential for good results.''
(See H.R. Rep. No. 100-899, at 15 (1988).) The Committee surmised that,
left to their own devices, some laboratories would be inclined to treat
PT samples differently than their patient specimens, as they would know
that the laboratory would be judged based on its performance in
analyzing those samples. For example, such laboratories might be
expected to perform repeated tests on the PT sample, use more highly
qualified personnel than are routinely used for such testing, or send
the samples out to another laboratory for analysis. As such practices
would undermine the purpose of PT, the Committee noted that the CLIA
statute was drafted to bar laboratories from such practices, and to
impose significant penalties on those who elect to violate those bars
(H.R. Rep. No. 100-899, at 16 and 24 (1988)).
PT is a valuable tool the laboratory can use to verify the accuracy
and
[[Page 58400]]
reliability of its testing. During PT, an HHS-approved PT program sends
samples to be tested by a laboratory on a scheduled basis. After
testing the PT samples, the laboratory reports its results back to the
PT program for scoring. Review and analysis of PT reports by the
laboratory director will alert the director to areas of testing that
are not performing as expected and may also indicate subtle shifts or
trends that, over time, could affect patient results. As there is no
on-site, external proctor for PT testing in a laboratory, the testing
relies in large part on an honor system. The PT program places heavy
reliance on each laboratory and laboratory director to self-police
their analysis of PT samples to ensure that the testing is performed in
accordance with the CLIA requirements. For each PT event, laboratories
are required to attest that PT samples are tested in the same manner as
patient specimens are tested. PT samples are to be assessed by
integrating them into the laboratory's routine patient workload, and
the testing itself is to be conducted by the personnel who routinely
perform such testing, using the laboratory's routine methods. The
laboratory is barred from engaging in interlaboratory communication
pertaining to results prior to the PT program's event cut-off date and
must not send the PT samples or any portion of the PT samples to
another laboratory for testing, even if it would normally send a
patient specimen to another laboratory for testing.
Any laboratory that intentionally refers its PT samples to another
laboratory for analysis risks having its certification revoked for at
least 1 year, in which case, any owner or operator of the laboratory
risks being prohibited from owning or operating another laboratory for
2 years (42 CFR 493.1840(a)(8), (b)). The phrase ``intentionally
referred'' has not been defined by the statute or regulations, but we
have consistently interpreted this phrase from the onset of the program
to mean general intent, as in intention to act. Whether or not acts are
authorized or even known by the laboratory's management, a laboratory
is responsible for the acts of its employees. Among other things,
laboratories need to have procedures in place and train employees on
those procedures to prevent staff from forwarding PT samples to other
laboratories even in instances in which they would normally forward a
patient specimen for testing.
In the February 7, 2013 Federal Register (78 FR 9216), we published
a proposed rule titled Part II--Regulatory Provisions to Promote
Program Efficiency, Transparency and Burden Reduction (hereafter
referred to as the Burden Reduction proposed rule) to propose reforms
to the Medicare and CLIA regulations that we had identified as
unnecessary, obsolete, or excessively burdensome. In that rule, we
proposed changes to the CLIA PT regulations to establish policies under
which certain PT referrals by laboratories would generally not be
subject to revocation of their CLIA certificate or a 2 year prohibition
on laboratory ownership or operation. To do this, we proposed a narrow
exception in our longstanding interpretation of what constitutes an
``intentional'' PT referral.
While that proposed rule was under development but before its
publication, Congress enacted the ``Taking Essential Steps for Testing
Act of 2012'' (Pub. L. 112-202, the ``TEST Act'') on December 4, 2012.
The TEST Act amended section 353 of the PHS Act to provide the
Secretary with discretion as to which sanctions she would apply to
cases of intentional PT referral.
In the Burden Reduction proposed rule (78 FR 9216), we stated that
we would address the TEST Act in future rulemaking, except that to
comply with the TEST Act and begin to align the CLIA regulations with
the amended CLIA statute, we proposed to revise the second sentence of
Sec. 493.801(b)(4) to state that a laboratory may (as opposed to
``must'') have its CLIA certification revoked when CMS determines PT
samples were intentionally referred to another laboratory.
The regulatory changes that we are now proposing would add the
remaining policies and regulatory changes needed to fully implement the
TEST Act.
B. Proposed Changes
As noted earlier, the TEST Act provided the Secretary with the
discretion to substitute intermediate sanctions in lieu of the 2 year
prohibition on the owner and operator when a CLIA certificate is
revoked due to intentional PT referral, and to consider imposing
alternative sanctions in lieu of revocation in such cases as well. The
TEST Act provides the Secretary with the opportunity to frame policies
that will achieve a better correlation between the nature and extent of
intentional PT referrals at a given laboratory, and the scope and type
of sanctions or corrective actions that are imposed on that laboratory
and its owners and operators, as well as any consequences to other
laboratories owned or operated by those owners and operators.
We are proposing to divide the sanctions for PT referral into three
categories based on severity and extent of the referrals. The first
category is for the most serious, egregious violations, encompassing
cases of repeat PT referral or cases where a laboratory reports another
laboratory's test results as its own. In such cases, we do not believe
that alternative sanctions would be appropriate. Therefore, we are
proposing to revoke the CLIA certificate for at least 1 year in
instances in which a laboratory has a repeat proficiency testing
referral, ban the owner and operator from owning or operating a CLIA-
certified laboratory for at least 1 year, and may also impose a civil
monetary penalty (CMP). In keeping with the February 7, 2013 proposed
rule (78 FR 9216), we propose to define, at Sec. 493.2, ``a repeat
proficiency testing referral'' as ``a second instance in which a
proficiency testing sample, or a portion of a sample, is referred, for
any reason, to another laboratory for analysis prior to the
laboratory's proficiency testing program event cut-off date within the
period of time encompassing the two prior survey cycles (including
initial certification, recertification, or the equivalent for
laboratories surveyed by an approved accreditation organization).'' We
believe that a repeat PT referral warrants revocation of a laboratory's
CLIA certificate for at least 1 year because such laboratories have
already been given opportunity to review their policies, correct their
deficiencies and adhere to regulations, and adherence to the
laboratory's established policy, and ensure effective training of their
personnel. As there is no on-site, external proctor for PT testing in a
laboratory, the testing relies in large part on an honor system.
Therefore, when a PT referral has previously occurred prior to the
event cut-off date within the two prior survey cycles, we do not
believe that laboratories should be given additional opportunities to
ensure that they are meeting the CLIA PT requirements and believe that
revocation of the CLIA certificate should consequently occur. We also
propose, in the first category, that the CLIA certificate be revoked,
and the owner and operator banned from owning or operating a CLIA-
certified laboratory for at least 1 year, in cases where the PT sample
was referred to another laboratory, the referring laboratory received
the results from the other laboratory, and the referring laboratory
reported to the PT program the other laboratory's results on or before
the event cut-off date. We note that PT
[[Page 58401]]
programs place heavy reliance on each laboratory and laboratory
director to self-police their analysis of PT samples to ensure that the
testing is performed in accordance with the CLIA requirements. PT
performance and scores must reflect an individual laboratory's
performance, and as such, reporting results from another laboratory is
deceptive to the public. We believe these two scenarios are the most
egregious forms of PT referral and merit the most severe sanctions.
For example, a laboratory may have two distinct sites, Laboratory A
and Laboratory B, that operate under different CLIA numbers, where
Laboratory A has received PT samples to be tested as part of their
enrollment in PT as required by the CLIA regulations. If Laboratory A
were to refer PT samples to Laboratory B, receive test results back at
Laboratory A from Laboratory B prior to the event cutoff date, and
report to the PT program those results obtained from Laboratory B, the
scores for the PT event would not reflect the performance of Laboratory
A, but rather the performance of Laboratory B. Since the PT scores
would actually be reflective of the accuracy and reliability at
Laboratory B rather than A, the purpose of the proficiency testing
would be undermined. Further, as stated in the CLIA regulations at
Sec. 493.801(4)(ii), the laboratory must make PT results available to
the public. In this scenario, any member of the public who sought to
use the reported PT scores to select a high-quality laboratory would be
deceived by the scores for the results submitted to the PT program, as
they would expect that they were provided information about the
performance of Laboratory B when that would not be the case.
In cases of PT referral where the CLIA certificate is revoked, the
TEST Act provides the Secretary with discretion to ban the owner and
operator from owning or operating a CLIA-certified laboratory for less
than 2 years. Prior to the TEST Act, revocation of a CLIA certificate
for PT violation always triggered a 2-year ban on the owner and
operator. We are also proposing that the laboratory owner and operator
would be banned from owning or operating a CLIA-certified laboratory
for at least 1 year for any violation within the first category
involving the revocation of a CLIA certificate.
We believe that a second category of sanctions should be applied to
certain PT referral situations in which the CLIA certificate would be
suspended or limited (rather than revoked), in combination with
alternative sanctions. We propose to use this approach in those
instances in which a laboratory refers PT samples to a laboratory that
operates under a different CLIA number before the PT event close date
and, while the laboratory reports its own results to the PT program, it
receives results from the second laboratory prior to the event close
date. Such a referral situation would allow the referring laboratory an
opportunity to confirm, check, or change its results prior to reporting
its results to the PT program. If, upon investigation, surveyors
determine that the referral does not constitute a repeat PT referral,
we propose to suspend or limit the CLIA certificate for less than 1
year rather than revoke the CLIA certificate, and propose that we also
impose alternative sanctions (as an alternative to revocation of the
CLIA certificate). Further, an alternative sanction would always
include required training of staff.
A suspension of the CLIA certificate means that no testing of human
specimens for health care purposes may be performed by that laboratory
during the period of suspension. In such cases, the owner or operator
typically contracts out for laboratory services, or contracts with
another operator to operate the laboratory under the contracted
laboratory's CLIA certificate. In contrast to revocation of the CLIA
certificate and its accompanying ban on the owner and operator,
suspension usually applies only to the individual laboratory in
question rather than all laboratories that are under the control of the
owner or operator.
A limitation of the CLIA certificate means that the laboratory is
not permitted to perform testing or to bill Medicare or Medicaid for
laboratory work in the specialty or subspecialty that has been limited,
but may continue to conduct all other testing under its own CLIA
certificate.
In determining whether to suspend or limit the CLIA certificate, we
propose to apply the criteria of Sec. 493.1804(d). For example, we
would examine the extent of the PT referral practice as well as its
duration. We propose that if surveyors determine that in the prior two
survey cycles there were prior PT referrals that occurred but were not
cited by CMS, then the CLIA certificate would always be suspended
rather than just limited. The duration of the suspension would reflect
the number of samples referred, the period of time the referrals had
been occurring, the extent of the practice, and other criteria
specified at Sec. 493.1804(d).
Further, for cases in the second category we propose that when the
certificate is suspended or limited, alternative sanctions would be
applied in addition to the principal sanctions of suspension or
limitation. We propose that, at a minimum, the alternative sanctions
would include a CMP to be determined using the criteria set forth in
Sec. 493.1834, as well as a directed plan of correction. Additionally,
if the CLIA certificate is suspended, we propose to also impose state
on-site monitoring of the laboratory.
We believe that a third category of sanctions should be applied to
those PT referral scenarios in which the referring laboratory does not
receive test results prior to the event cut-off date from another
laboratory as a result of the PT referral. We propose that in such
scenarios, at a minimum, the laboratory will always be required to pay
a CMP as calculated according to Sec. 493.1834, as well as comply with
a directed plan of correction. A directed plan of correction would
always include training of staff.
For example, a laboratory may place PT samples in an area where
other patient specimens are picked up by courier to take to a reference
laboratory. The reference laboratory courier may take the PT samples
along with the patients' specimens. The laboratory personnel notice
that the PT samples are missing and contact the reference laboratory to
inquire if they have received the PT samples along with the patients'
specimens. The reference laboratory is instructed to discard the PT
samples and not test them since they were picked up in error. In this
case, the ``referring'' laboratory realized the error, contacted the
receiving laboratory, and did not receive results back for any of the
PT samples. In this scenario, we propose to impose only alternative
sanctions. We welcome comments about other scenarios in which you
believe lesser sanctions may also be appropriate.
In determining whether to impose alternative sanctions, we propose
to rely on the existing considerations at Sec. 493.1804(c) and (d),
Sec. 493.1806(c), Sec. 493.1807(b), Sec. 493.1809 and, in the case
of civil money penalties, Sec. 493.1834(d). These current regulations
have proven effective as enforcement measures over time for CLIA
noncompliance for all circumstances other than PT referral. We
therefore believe these same criteria will be effective in the
imposition of alternative sanctions for PT referral cases.
In summary, we propose to amend Sec. 493.1840 by revising
paragraph (b) to specify three categories for the imposition of
sanctions for PT referrals. We believe these provisions, as amended,
would provide the necessary detail to fairly and uniformly apply the
discretion granted to the Secretary under the TEST Act, without being
so
[[Page 58402]]
specific as to defeat the intent to provide appropriate flexibility
when taking punitive or remedial action in the context of a PT referral
finding.
We also propose to make three conforming changes to the CLIA
regulations at the authority citation for Part 493 and at Sec. 493.1
and Sec. 493.1800(a)(2) to include references to the Public Health
Service Act as amended by the TEST Act.
We invite the public to comment on our proposed categorization of
potential PT referral situations, the criteria we propose for assessing
the scope and severity of any violation, and the types of sanctions
that correspond to each category.
V. Other Required Information
A. Requests for Data From the Public
Commenters can gain access to summarized FQHC data on an expedited
basis by downloading the files listed in this section, which are
available on the Internet without charge. For detailed claims data,
requestors would follow the current research request process which can
be found on the Research Data Assistance Center (ResDAC) Web site at
https://www.resdac.org/.
1. FQHC Summary Data. This file contains data summarized by CCN,
which can be used to model the proposed methodology and calculate
projected payments and impacts under the proposed PPS. The data file is
available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FQHCPPS/.
2. FQHC Proposed GAFs. This file contains the listed of proposed
GAFs by locality, as published in Addendum A of this proposed rule. The
data file is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FQHCPPS/.
3. HCRIS Cost Report Data. The data included in this file was
reported on Form CMS-222-92. The dataset includes only the most current
version of each cost report filed with CMS and includes cost reports
with fiscal year ending dates on or after September 30, 2009. HCRIS
updates this file on a quarterly basis. The data file is available at
https://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/CostReports/HealthClinic.html.
B. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on the information collection
requirements (ICRs) regarding the proposed FQHC rates and adjustments
in Sec. 405.2470.
Section II. of this proposed rule discusses the data that are used
in computing the FQHS PPS rates and adjustments. As discussed, the data
are derived from the RHC/FQHC cost report form CMS-222-92, and claims
form UB-04 CMS 1450 (per CMS Pub. 100-04, Medicare Claims Processing
Manual, Chapter 1). The reporting requirements for FQHCs are inSec.
405.2470 of the Medicare regulations. We note that, while the preamble
does not contain any new ICRs, there is currently an OMB approved
information collection request associated with the RHC/FQHC cost
report. The OMB control number is 0938-0107, with an expiration date of
August 31, 2014.
If you comment on this information collection and recordkeeping
requirement, please do either of the following:
1. Submit your comments electronically as specified in the
ADDRESSES section of this proposed rule; or
2. Submit your comments to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Attention: CMS Desk Officer,
[CMS-1443-P] Fax: (202) 395-6974; or Email: OIRA_submission@omb.eop.gov.
VI. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
VII. Regulatory Impact Analysis
A. Statement of Need
This proposed rule is necessary to establish a methodology and
payment rates for a PPS for FQHC services under Medicare Part B
beginning on October 1, 2014, in compliance with the statutory
requirements of section 10501(i)(3)(A) of the Affordable Care Act. This
proposed rule also is necessary to make--(1) contracting changes for
RHCs; (2) conforming changes to other policies related to FQHCs and
RHCs; (3) changes to enforcement actions for improper proficiency
testing referrals.
B. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999) and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with economically significant effects ($100
[[Page 58403]]
million or more in any 1 year). This proposed rule is an economically
significant rule because we estimate that the FQHC PPS will increase
payments to FQHCs by more than $100 million in 1 year. We believe that
this regulation would not have a significant financial impact on RHCs.
We estimate that this rulemaking is ``economically significant'' as
measured by the $100 million threshold, and hence also a major rule
under the Congressional Review Act. Accordingly, we have prepared a RIA
that, to the best of our ability, presents the costs and benefits of
the rulemaking.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and government
jurisdictions. All RHCs and FQHCs are considered to be small entities.
The great majority of hospitals and most other health care providers
and suppliers are small entities, either by being nonprofit
organizations or by meeting the SBA definition of a small business
(having revenues of less than $7.0 million to $35.5 million in any 1
year). The provisions in this proposed rule have an average of 30
percent increase in Medicare PPS payment to FQHCs and no financial
impact on RHCs. Individuals and states are not included in the
definition of a small entity.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. As its measure of
significant economic impact on a substantial number of small entities,
HHS uses a change in revenue of more than 3 to 5 percent. We are not
preparing an analysis for section 1102(b) of the Act, because we have
determined that this proposed rule would not have a significant impact
on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2013, that
is approximately $141 million. This proposed rule does not include any
mandates that would impose spending costs on state, local, or tribal
governments in the aggregate, or by the private sector, that would
exceed the threshold of $141 million.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct compliance costs on state
and local governments, preempts state law, or otherwise has Federalism
implications. This proposed rule would not have a substantial effect on
state and local governments, preempt state law, or otherwise have
Federalism implications.
This proposed regulation is subject to the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and has been transmitted to the Congress
and the Comptroller General for review.
C. Limitations of Our Analysis
Our quantitative analysis presents the projected effects of our
proposed policy changes, as well as statutory changes effective on
FQHCs for cost reporting periods beginning on or after October 1, 2014.
We estimated the effects of individual proposed policy changes by
estimating payments per visit while holding all other payment policies
constant. We use the best data available, but, generally, we do not
attempt to make adjustments for future changes in such variables as the
number of visits or the prevalence of new patients or comprehensive
initial Medicare visits furnished to Medicare beneficiaries. To the
extent that there are changes in the volume and mix of services
furnished by FQHCs, the actual impact on total Medicare revenues will
be different from those shown in Table 2 (Impact of the PPS on Payments
to FQHCs).
D. Anticipated Effects of the FQHC PPS
1. Effects on FQHCs
As required by section 1834(o)(2)(B)(i) of the Act, initial
payments (Medicare and coinsurance) under the FQHC PPS must equal 100
percent of the estimated amount of reasonable costs, as determined
without the application of the current system's UPLs or productivity
standards that can reduce a FQHC's per visit rate. As discussed in
sections I and II. of this proposed rule, we propose to pay FQHCs a
single encounter-based rate per beneficiary per day, adjusting for
geographic differences in the cost of inputs by applying an adaptation
of the GPCI used to adjust payment under the PFS, and further adjusting
the encounter-based rate when a FQHC furnishes care to a patient that
is new to the FQHC or to a beneficiary receiving a comprehensive
initial Medicare visit (that is, an IPPE an initial AWV).
Based on comparisons of the proposed PPS rate to the AIRs (as
listed on the FQHC cost reports), the proposed FQHC PPS is estimated to
have an overall impact of increasing total Medicare payments to FQHCs
by approximately 30 percent. The FQHC PPS is effective for cost reports
beginning on or after October 1, 2014. This impact is fully implemented
when all FQHCs are paid under the FQHC PPS and reflects the additional
payment rate update based on the MEI for all of 2015 (fiscal year
through the end of the calendar year). (See section II.E. of this
proposed rule for a discussion of the use of the MEI update to
calculate the first year's base payment amount under the FQHC PPS.)
Table 2 shows the impact on cost reporting entities and their
associated delivery sites of the fully implemented proposed FQHC PPS
payments compared to current payments to FQHCs. The analysis is based
on cost reports from freestanding FQHCs with cost reporting periods
ending between June 30, 2011, and June 30, 2012. A FQHC with multiple
sites has the option of filing a consolidated cost report, and this
sample reflects 1,141 cost reporting entities that represent 3,509
delivery sites. The following is an explanation of the information
represented in Table 2:
Column A (Number of cost-reporting entities): This column
shows the number of cost-reporting entities for each impact category.
Urban/rural status and census division were determined based on the
geographic location of the cost reporting entity. Categories for
Medicare volume were defined from cost report data, based on tertiles
for the percent of total visits that were identified as Medicare
visits. Categories for total volume were defined from cost report data,
based on tertiles for the total number of visits for each cost
reporting entity.
Column B (Number of delivery sites): This column shows the
number of delivery sites associated with the cost reporting entities in
each impact category. (Note that delivery sites that are part of a
consolidated cost reporting entity might not fall into the same impact
category if considered individually. For example, a cost reporting
entity could include delivery sites in multiple census division, and
delivery sites were categorized based on the geographic location of the
cost reporting entity).
[[Page 58404]]
Column C (Number of Medicare visits): This column shows
the number of Medicare visits in the final data set that were used to
model payments under the FQHC PPS.
Column D (Effect of statutorily required changes): This
column shows the estimated fully implemented combined impact on
payments to FQHCs of changes to the payment structure that are required
by statute. Removing both the UPL and the productivity screen is
estimated to increase total Medicare payments to FQHCs by about 28
percent. The combined impact in column D also reflects the FQHC PPS
requirement to calculate payment based on the costs of all FQHCs,
rather than on an individual FQHC's costs. We note that the impacts for
column D through H reflect the growth in the MEI from July 1, 2012
through September 30, 2014, prior to the application of the forecasted
MEI update for the 15-month period of October 1, 2014 through December
31, 2015.
Columns E through H (Effects of the Proposed Adjustments
to the Average Cost per Visit): These columns show the estimated fully
implemented impacts on Medicare payments to FQHCs due to the proposed
policy changes. In developing the Medicare FQHC PPS, section
10501(i)(3)(A) of the Affordable Care Act requires CMS to take into
account the type, intensity, and duration of FQHC services, and allows
other adjustments, such as geographic adjustments. As discussed in
section II.C of this proposed rule, the cost report data are
insufficient for modeling these types of adjustments, and we propose to
use the HCPCS codes in the FQHC claims data to support the development
of the FQHC PPS rate and adjustments and for making payment under the
PPS. As demonstrated in columns E-H, the overall effect of these
various adjustments is budget neutral.
Column E (Effect of daily visit (per diem) rate): This
column shows the estimated fully implemented impact on payments to
FQHCs of the proposal to pay a single encounter-based rate per
beneficiary per day, which eliminates the current exceptions that pay
for more than one visit per beneficiary per day. As it is uncommon for
FQHCs to bill more than one visit per day for the same beneficiary
(less than 0.5 percent of visits), this adjustment would have minimal
effect on most FQHCs.
Column F (Effect of new patient/initial visit adjustment):
This column shows the estimated fully implemented impact on payments to
FQHCs of the proposal to adjust the encounter-based rate by 1.3333 when
a FQHC furnished care to a patient that was new to the FQHC or to a
beneficiary receiving a comprehensive initial Medicare visit. As new
patients and initial Medicare visits accounted for approximately 3
percent of all FQHC visits, this adjustment would have limited
reduction on the base encounter rate, after application of budget
neutrality, and a limited redistribution effect among FQHCs.
Column G (Effect of the GAF): This column shows the
estimated fully implemented impact on payments to FQHCs of the proposal
to adjust payments for geographic differences in costs by applying an
adaptation of the GPCIs used to adjust payment for physician work and
practice expense under the PFS.
Column H (Combined effect of all PPS adjustments): This
column shows the estimated fully implemented impact on payments to
FQHCs of the proposed adjustments in columns E through G. Both the
individual and combined effects of these adjustments on overall
Medicare payment to FQHCs would be zero percent as the effects of these
adjustments would be redistributive and would not change Medicare
payments in the aggregate.
Column I (Combined effect of all policy changes and MEI
adjustment): This column shows the estimated fully implemented impact
on payments to FQHCs of removing the UPL and productivity screen in
Column D, the adjustments to the PPS rates in the preceding columns,
and the application of the forecasted MEI update for the 15-month
period of October 1, 2014 through December 31, 2015.
Table 2--Impact of the PPS on Payments to FQHCs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Combined
Effect of Effect of Effect of Effect of Combined effect of
Number of Number of statutorily daily visit new patient/ geographic effect of all policy
Number of cost[dash]reporting entities delivery Medicare required (per diem) initial adjustment all PPS changes and
sites visits changes rate visit factor adjustments MEI
(percent) (percent) adjustment (GAF) (percent) adjustment
(percent) (percent) (percent)
(A)............................................................... (B) (C) (D) (E) (F) (G) (H) (I)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
All FQHCs 1,141............................................................. 3,509 5,245,961 28.0 0.0 0.0 0.0 0.0 30.2
Urban/
rural
Status:
Urban 647............................................................... 1,756 2,518,395 21.8 -0.2 0.0 3.1 3.0 27.6
Rural 348............................................................... 820 1,385,116 39.3 0.2 -0.9 -3.1 -3.0 37.4
Mixed 146............................................................... 933 1,342,450 29.6 0.2 0.0 -2.7 -2.5 28.5
rura
l-
urba
n...
Medicare
Volume:
Low 380............................................................... 1,039 851,771 22.6 -0.1 0.2 3.3 3.4 28.9
(<6.
9%
of
tota
l
visi
ts).
Mediu 381............................................................... 1,235 1,751,498 25.5 -0.1 0.1 0.0 0.5 28.2
m
(6.9
%-13
.2%
of
tota
l
visi
ts).
High 380............................................................... 1,237 2,642,692 31.7 0.1 -0.2 -1.3 -1.4 32.0
(>13
.2%
of
tota
l
visi
ts).
Total
Volume:
Low 380............................................................... 502 426,346 31.8 0.0 0.1 -0.1 0.0 34.1
(<17
,340
tota
l
visi
ts).
Mediu 381............................................................... 903 1,253,817 29.6 0.0 0.1 -1.6 -1.5 29.8
m
(17,
340-
42,7
11
tota
l
visi
ts).
High 380............................................................... 2,123 3,565,798 27.1 0.0 -0.1 0.6 0.5 29.9
(>42
,711
tota
l
visi
ts).
Census
Division
:
New 92................................................................ 236 657,794 25.7 -0.4 -0.2 1.8 1.2 29.3
Engl
and.
Middl 108............................................................... 314 457,798 23.1 0.1 0.0 3.1 3.2 29.1
e
Atla
ntic
East 143............................................................... 460 603,034 29.2 -0.2 0.1 -2.7 -2.7 27.7
Nort
h
Cent
ral.
West 78................................................................ 201 248,891 29.2 0.0 0.1 -5.1 -5.1 24.6
Nort
h
Cent
ral.
South 187............................................................... 688 1,049,755 31.0 0.2 0.0 -3.0 -2.9 29.3
Atla
ntic
East 83................................................................ 317 374,386 36.1 0.1 0.0 -6.8 -6.7 29.2
Sout
h
Cent
ral.
West 107............................................................... 287 337,375 29.4 0.1 0.2 -5.3 -5.0 25.0
Sout
h
Cent
ral.
Mount 87................................................................ 311 368,666 29.2 -0.1 0.3 -2.1 -1.9 28.9
ain.
Pacif 252............................................................... 690 1,145,897 24.8 0.1 -0.1 7.5 7.5 36.4
ic..
US 4................................................................. 5 2,365 36.7 0.4 1.1 -0.5 1.0 41.2
Terr
itor
ies.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 58405]]
2. Effects on RHCs
While we expect that removing the restriction on contracting will
result in cost savings for RHCs that employ an NP or PA and will no
longer need to conduct employment searches to meet their additional
staffing needs, the financial impact on RHCs is expected be small and
cannot be quantified.
There is no Medicare impact on RHCs as a result of the
implementation of the FQHC PPS.
3. Effects on Other Providers and Suppliers
There would be no financial impact on other providers or suppliers
as a result of the implementation of the FQHC PPS.
4. Effects on the Medicare and Medicaid Programs
We estimate that annual Medicare spending for FQHCs during the
first 5 years of implementation would increase as follows:
Table 3--Estimated Increase in Annual Medicare Payments to FQHCs
------------------------------------------------------------------------
Estimated increase
Calendar year in payments ($ in
millions)
------------------------------------------------------------------------
2014.............................................. 33
2015.............................................. 204
2016.............................................. 226
2017.............................................. 236
2018.............................................. 248
------------------------------------------------------------------------
We intend for estimated aggregate payments under the proposed FQHC
PPS to equal 100 percent of the estimated amount of reasonable costs,
as determined without the application of the current system's UPLs or
productivity standards. We note that the estimated increase in payments
for CY 2014 is significantly smaller than for subsequent years,
primarily due to the implementation date of October 1, 2014, which will
affect payments for only 3 months of CY 2014. In addition, an analysis
of 2010 cost reporting data indicates that approximately 6 percent of
FQHC cost reporting entities had cost reporting periods that began
between October 1 and December 31, which indicates that we would expect
a small percentage of cost reporting entities to be paid under the FQHC
PPS between October 1, 2014 and December 31, 2014.
After the first year of implementation, the PPS payment rates must
be increased by the percentage increase in the MEI. After the second
year of implementation, PPS rates shall be increased by the percentage
increase in a market basket of FQHC goods and services as established
through regulations, or, if not available, the MEI. While we will
consider the merits of estimating a FQHC market basket for use in base
payment updates after the second year of the PPS, payment estimates
were updated annually by the MEI for purposes of this analysis.
There is no financial impact on the Medicaid program as a result of
the implementation of the Medicare FQHC PPS.
5. Effects on Medicare Beneficiaries
FQHC PPS: As discussed in section II.E. of this proposed rule, we
propose that coinsurance under the FQHC PPS would be 20 percent of the
lesser of the FQHC's charge or the PPS rate. Under the current
reasonable cost payment system, beneficiary coinsurance for FQHC
services is assessed based on the FQHC's charge, which can be more than
coinsurance based on the AIR. An analysis of a sample of FQHC claims
data for dates of service between January 1, 2011 through June 30, 2012
indicated that beneficiary coinsurance based on 20 percent of the
FQHC's charges was approximately $23 million higher, or 18 percent
more, than if coinsurance had been assessed based on 20 percent of the
lesser of the FQHC's charge or the applicable all-inclusive rate.
Based on comparisons of the proposed PPS rate to the AIRs, the
proposed FQHC PPS is estimated to have an overall impact of increasing
total Medicare payments to FQHCs by approximately 30 percent. This
overall 30 percent increase translates to a 30 percent increase to
beneficiary coinsurance if it were currently assessed based on the
FQHC's AIR and if, under the PPS, it would always be assessed based on
the PPS rate. Because the charge structure among FQHCs varies, and
beneficiary liability for the same mix of FQHC services could differ
significantly based on the differences in charge structures, we have
insufficient data to estimate the change to beneficiary coinsurance due
to the FQHC PPS.
E. Effects of Other Policy Changes
1. Effects of Policy Changes for FQHC's and RHC's
a. Effects of RHC Contracting Changes
In section III.A. of this proposed rule we discuss our proposal to
remove the restrictions on RHCs contracting with nonphysician
practitioners when the statutory requirement to employ an NP or a PA is
met would provide RHCs with greater flexibility in meeting their
staffing requirements. The ability to contract with NPs, PAs, CNMs, CP,
and CSWs would provide RHCs with additional flexibility with respect to
recruiting and retaining non-physician practitioners, which may result
in increasing access to care in rural areas. There is no cost to the
Federal government and we cannot estimate a cost savings for RHCs.
b. Effects of the FQHC and RHC Conforming Changes
In section III.B. of this proposed rule, we present our proposals
regarding clarifying, technical, conforming changes to the FQHC and RHC
regulations that are necessary for implementation of the FQHC PPS. We
believe that are no costs associated with these changes.
2. Effects of CLIA Changes for Enforcement Actions for Proficiency
Testing Referral
As discussed in section IV. of this proposed rule, we would make a
number of clarifications and changes pertaining to the regulations
governing adverse actions for PT referral under CLIA to ensure
conformance between the TEST Act and our regulations. The TEST Act
provides the Secretary with the discretion to apply alternative
sanctions in lieu of potential principal sanctions in cases of
intentional PT referral. Alternative sanctions may include any
combination of civil money penalties, directed plan of correction (such
as required remedial training of staff), temporary suspension of
Medicare or Medicaid payments, or state onsite monitoring. From 2007
through 2011 there were 41 cases of cited, intentional PT referral. Of
these 41 cases (averaging 8 per year), we estimate that 28 (or 6 per
year on average) may have fit the terms of this rule to have
alternative sanctions applied. Based on discussions with the most
recently affected laboratories that were cited for PT violations, we
estimate that the average cost of the sanctions applicable under
current regulations is approximately $578,400 per laboratory. The
largest single type of cost is the expense to the laboratory or
hospital to contract out for management of the laboratory, and to pay
laboratory director fees, due to the 2-year ban that prohibits the
owner and operator from owning or operating a CLIA-certified laboratory
in accordance with revocation of the CLIA certificate. We have not
included legal expenses in this cost estimate, as it is not possible to
estimate the extent to which laboratories may still appeal the
imposition of the alternative sanctions in this proposed
[[Page 58406]]
rule. If the expense of alternative sanctions averaged $150,000 per
laboratory, we estimate the annual fiscal savings of the changes to
average $2.6 million ($578,400 minus $150,000 for 6 laboratories).
While the total savings may not be large, the savings to the individual
laboratory or hospital that is affected can be significant. However, we
note that the $2.6 million estimate may overstate or understate the
provision's savings to laboratories. For example, if under current
regulations the prior management is fired instead of being reassigned
to other duties for the 2-year period, some of the costs of paying for
the new management's salaries, benefits and training may be able to be
drawn from funding that had previously been earmarked to pay those
expenses for their predecessors. That is, the costs associated with the
new employee could be offset by the savings gained when the former
employee is terminated. Any such offset will result in lower savings
than is estimated earlier. However, there are also unknowns that may
result in larger savings than estimated earlier. For example, we have
no data on whether terminated management historically received
severance packages. If they did, those savings would have to be added
to the savings we noted earlier. Such changes in severance payments
would represent transfer effects of the proposed rule, rather than net
social costs or benefits. In general, it is only to the extent that new
laboratory directors put forth more effort than temporarily-banned
laboratory directors (due, for example, to the need to familiarize
themselves with laboratories they have not previously operated) or that
support staff put forth more effort to make the new management
arrangements than they would addressing alternative sanctions that
society's resources would be freed for other uses by the proposed
provision; thus, a comprehensive estimate of laboratory savings would
represent some combination of transfers and net social benefits. While
we recognize these potential inaccuracies in our estimates, we lack
data to account for these considerations.
F. Alternatives Considered
This proposed rule contains a range of policies, including some
provisions related to specific statutory provisions. The preceding
sections of this proposed rule provide descriptions of the statutory
provisions that are addressed, identifies those policies when
discretion has been exercised, presents rationale for our final
policies and, where relevant, alternatives that were considered.
G. Accounting Statement and Table
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/omb/circulars_a004_a-4/), we have prepared an
accounting statement table showing the classification of the impacts
associated with implementation of this proposed rule.
Table 4--Accounting Statement--Classification of Proposed Estimated Expenditures Under the FQHC PPS
----------------------------------------------------------------------------------------------------------------
Units
-----------------------------------------------
Category Estimates Discount rate Period
Year dollar (percent) covered
----------------------------------------------------------------------------------------------------------------
Transfers:
Federal Annualized Monetized Transfers (in 183 2014 7 2014-2018
millions).................................. 187 2014 3 2014-2018
---------------------------------------------------------------
From Whom to Whom........................... Federal Government to FQHCs that receive payments under
Medicare.
----------------------------------------------------------------------------------------------------------------
H. Conclusion
The previous analysis, together with the remainder of this
preamble, provides an initial Regulatory Flexibility Analysis. The
previous analysis, together with the remainder of this preamble,
provides a Regulatory Impact Analysis.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 405
Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medical devices, Medicare reporting and
recordkeeping requirements, Rural areas and X-rays.
42 CFR Part 491
Grant programs--health, Health facilities, Medicaid, Medicare,
Reporting and recordkeeping requirements, Rural areas.
42 CFR Part 493
Administrative practice and procedure, Grant programs--health,
Health facilities, Laboratories, Medicaid, Medicare, Penalties,
Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR parts 405, 491, and 493 as
set forth below:
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
0
1. The authority for citation for part 405 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
0
2. Section 405.2400 is revised to read as follows:
Sec. 405.2400 Basis.
Subpart X is based on the provisions of the following sections of
the Act: Section 1833--Amounts of payment for supplementary medical
insurance services. Section 1861(aa)--Rural health clinic services and
Federally qualified health center services covered by the Medicare
program. Section1834(o)--Federally qualified health center prospective
payment system beginning October 1, 2014.
0
3. In Sec. 405.2401, paragraph (b) is amended as follows:
0
A. Removing the definition of ``Act''.
0
B. Revising the definition of ``Allowable costs''.
0
C. Removing the definition of ``Carrier''.
0
D. Adding the definitions of ``Certified nurse midwife (CNM),''
``Clinical psychologist (CP)'', and ``Clinical social worker (CSW)''.
0
E. Revising the definitions of ``Coinsurance'' and ``Deductible''.
0
F. Adding the definition of ``Employee'' and ``HRSA.
0
G. Revising paragraphs (1) through (3) of the definition of ``Federally
qualified health center''.
0
H. Removing the definition of ``Intermittent nursing care''.
[[Page 58407]]
0
I. Adding the definition of ``Medicare Administrative Contractor
(MAC)''.
0
J. Removing the definitions of ``Nurse-midwife'', ``Nurse practitioner
and physician assistant'', and Part-time nursing care''.
0
K. Adding the definitions of ``Physician assistant (PA)'' and
``Prospective payment system (PPS)''.
0
L. Revising the definitions of ``Reporting period'' and ``Rural health
clinic''.
0
M. In the definition of ``Visiting nurse services,'' removing the
phrase ``registered nurse'' and adding in its place the phrase
``registered professional nurse''.
The revisions and additions read as follows:
Sec. 405.2401 Scope and definitions.
* * * * *
(b) * * *
Allowable costs means costs that are incurred by a RHC or FQHC that
is authorized to bill based on reasonable costs and are reasonable in
amount and proper and necessary for the efficient delivery of RHC and
FQHC services.
* * * * *
Certified nurse midwife (CNM) means an individual who meets the
applicable education, training experience and other requirements of
Sec. 410.77(a) of this chapter.
Clinical psychologist (CP) means an individual who meet the
applicable education, training experience and other requirements of
Sec. 410.71(d) of this chapter.
Clinical social worker (CSW) means an individual who meet the
applicable education, training experience and other requirements of
Sec. 410.73(a) of this chapter.
* * * * *
Coinsurance means that portion of the RHC's charge for covered
services or that portion of the FQHC's charge or PPS rate for covered
services for which the beneficiary is liable (in addition to the
deductible, where applicable).
* * * * *
Deductible means the amount incurred by the beneficiary during a
calendar year as specified in Sec. 410.160 and Sec. 410.161 of this
chapter.
Employee means any individual who, under the common law rules that
apply in determining the employer-employee relationship (as applied for
purposes of section 3121(d)(2) of the Internal Revenue Code of 1986),
is considered to be employed by, or an employee of, an entity.
(Application of these common law rules is discussed in 20 CFR 404.1007
and 26 CFR 31.3121(d)-1(c).)
Federally qualified health center (FQHC) * * *
(1) Is receiving a grant under section 330 of the Public Health
Service (PHS) Act, or is receiving funding from such a grant under a
contract with a recipient of such a grant and meets the requirements to
receive a grant under section 330 of the PHS Act;
(2) Is determined by the HRSA to meet the requirements for
receiving such a grant;
(3) Was treated by CMS, for purposes of part B, as a comprehensive
federally funded health center as of January 1, 1990; or
* * * * *
HRSA means the Health Resources and Services Administration.
* * * * *
Medicare Administrative Contractor (MAC) means an organization that
has a contract with the Secretary to administer the benefits covered by
this subpart.
Nurse practitioner (NP) means individuals who meet the applicable
education, training experience and other requirements of Sec.
410.75(b) of this chapter.
* * * * *
Physician assistant (PA) means an individual who meet the
applicable education, training experience and other requirements of
Sec. 410.74(c) of this chapter.
Prospective payment system (PPS) means a method of payment in which
Medicare payment is made based on a predetermined, fixed amount.
Reporting period generally means a period of 12 consecutive months
specified by the MAC as the period for which a RHC or FQHC must report
required costs and utilization information. The first and last
reporting periods may be less than 12 months.
Rural health clinic means a facility that has--
(1) Been determined by the Secretary to meet the requirements of
section 1861(aa)(2) of the Act and part 491 of this chapter concerning
RHC services and conditions for approval; and
(2) Filed an agreement with CMS that meets the requirements in
Sec. 405.2402 to provide RHC services under Medicare.
* * * * *
0
4. Section 405.2402 is amended as follows:
0
A. Revising the section heading.
0
B. Revising paragraphs (b) introductory text and (c) introductory text.
0
C. Revising paragraph (d).
0
D. Removing paragraph (e).
0
E. Redesignating paragraph (f) as paragraph (e).
0
F. Revising newly redesignated paragraph (e).
The revisions read as follows:
Sec. 405.2402 Rural health clinic basic requirements.
* * * * *
(b) Acceptance of the clinic as qualified to furnish RHC services.
If the Secretary, after reviewing the survey agency or accrediting
organization recommendation, as applicable, and other evidence relating
to the qualifications of the clinic, determines that the clinic meets
the requirements of this subpart and of part 491 of this chapter, the
clinic is provided with--
* * * * *
(c) Filing of agreement by the clinic. If the clinic wishes to
participate in the program, it must--
* * * * *
(d) Acceptance by the Secretary. If the Secretary accepts the
agreement filed by the clinic, the Secretary returns to the clinic one
copy of the agreement with a notice of acceptance specifying the
effective date.
(e) Appeal rights. If CMS declines to enter into an agreement or if
CMS terminates an agreement, the clinic is entitled to a hearing in
accordance with Sec. 498.3(b)(5) and (6) of this chapter.
0
5. Section 405.2403 is amended as follows:
0
A. Revising the section heading.
0
B. Amending paragraphs (a) introductory text and (a)(2) by removing the
term ``rural health clinic'' and by adding in its place the term
``RHC''.
0
C. Amending paragraph (a)(3)(ii)(B) by removing the term ``rural health
clinic's'' and adding in its place the term ``RHC's''.
0
D. Amending paragraphs (a)(1), (a)(2) introductory text, (a)(3)(i), and
(a)(4)(i) and (ii) by removing the term ``clinic'' and adding in its
place the term ``RHC''.
The revision reads as follows:
Sec. 405.2403 Rural health clinic content and terms of the agreement
with the Secretary.
* * * * *
0
6. Section 405.2404 is amended as follows:
0
A. Revising the section heading.
0
B. Amending paragraphs (a) introductory text, (b)(1) introductory text,
(b)(2), (b)(3), (c), (e) introductory text, by removing the term
``rural health clinic'' each time it appears and by adding in its place
the term ``RHC''.
0
C. Amending paragraph (a)(1), (a)(2)(i), (a)(2)(ii)(A), (a)(3), and
(d)(1) by removing the term ``clinic'' each time it appears and adding
in its place the term ``RHC''.
0
D. Amending paragraph (a)(2)(i) by removing the term ``clinic's'' and
adding in its place the term ``RHC's''.
0
E. In paragraph (a)(2)(ii) introductory text, removing the phrase ``if
he
[[Page 58408]]
determines'' and adding place ``if the Secretary determines''.
0
F. In paragraph (a)(3), removing the phrase ``that shall be deemed''
and adding in its place the phrase ``The Secretary deems it''.
0
G. In paragraph (b)(2), removing the phrase ``The Secretary will give''
and adding in its place the phrase ``The Secretary gives''.
The revisions read as follows:
Sec. 405.2404 Termination of rural health clinic agreements.
* * * * *
Sec. 405.2410 [Amended]
0
7. Section 405.2410 is amended as follows:
0
A. In paragraph (a)(1), removing the term ``rural health clinic'' and
adding in its place the term ``RHC''.
0
B. In paragraph (a)(2), removing the term ``Federally qualified health
center'' and adding in its place the term ``FQHC''.
0
C. Revising paragraph (b).
The revision reads as follows:
Sec. 405.2410 Application of Part B deductible and coinsurance.
* * * * *
(b) Application of coinsurance. The beneficiary's responsibility is
based on either of the following:
(1) For RHCs and FQHCs that are not being paid in accordance with
section 1834(o) of the Act --
(i) A coinsurance amount that does not exceed 20 percent of the
RHC's or FQHC's reasonable customary charge for the covered service;
and
(ii)(A) For any one item or service furnished by the RHC, a
deductible and coinsurance liability that does not exceed twenty
percent of a reasonable customary charge by the RHC for that particular
item or service; or
(ii) For any one item or service furnished by a FQHC, a coinsurance
liability that does not exceed 20 percent of a reasonable customary
charge by the FQHC for that particular item or service.
(2) For FQHCs authorized to bill under the PPS, a coinsurance
amount which is 20 percent of the lesser of--
(i) The FQHC's charge; or
(ii) The PPS rate for the covered service.
0
8. Section 405.2411 is amended as follows:
0
A. Revising paragraph (a) introductory text.
0
B. In paragraphs (a)(1) through (a)(3), removing ``;'' and adding in
its place ``.''.
0
C. Revising paragraphs (a)(4) and (5).
0
D. Adding a new paragraph (a)(6).
0
E. Revising paragraph (b).
The revisions and addition read as follows:
Sec. 405.2411 Scope of benefits.
(a) The following RHC services are reimbursable under this subpart:
* * * * *
(4) Services and supplies furnished as incident to a nurse
practitioner, physician assistant, certified nurse midwife, clinical
psychologist, or clinical social worker service.
(5) Visiting nurse services when provided in accordance with
1861(aa)(1) of the Act and Sec. 405.2416.
(6) Clinical psychologists and clinical social worker services as
specified in Sec. 405.2450.
(b) Rural health clinic services are--
(1) Covered when furnished in a RHC setting or other outpatient
setting, including a patient's place of residence;
(2) Covered when furnished during a Part A stay in a skilled
nursing facility only when provided by a physician, nurse practitioner,
physician assistant, certified nurse midwife or clinical psychologist
employed or under contract with the RHC at the time the services are
furnished; and
(3) Not covered in a hospital as defined in section 1861(e) of the
Act; or critical access hospital as defined in 1861(mm)(1) of the Act).
0
9. Section 405.2412 is revised to read as follows:
Sec. 405.2412 Physicians' services.
Physicians' services are professional services that are furnished
by either of the following:
(a) By a physician at the RHC or FQHC.
(b) Away from the RHC or FQHC by a physician whose agreement with
the RHC or FQHC provides that he or she will be paid by the RHC or FQHC
for such services and certification and cost reporting requirements are
met.
Sec. 405.2413 [Amended]
0
10. Section 405.2413 is amended as follows:
0
A. Amending paragraphs (a)(2) and (a)(5) by removing the term
``clinic's'' and by adding in its place the term ``RHC's''.
0
B. Amending paragraph (a)(5) by removing the term ``clinic'' and by
adding in its place the term ``RHC''.
0
11. Section 405.2414 is amended as follows:
0
A. Revising paragraphs (a) introductory text and (a)(1).
0
B. In paragraphs (a)(2) and (3), removing ``;'' and adding in its place
``.''.
0
C. Revising paragraph (a)(4).
0
D. In paragraph (a)(5), removing the phrase ``They would'' and adding
in its place the phrase ``The services would''.
0
E. In paragraph (c), removing the phrase ``physician assistants, nurse
midwives or specialized nurse practitioners'' and adding in its place
the phrase ``physician assistants or certified nurse midwives''.
The revisions read as follows:
Sec. 405.2414 Nurse practitioner, physician assistant, and certified
nurse midwife services.
(a) Professional services are payable under this subpart if the
services meet all of the following:
(1) Furnished by a nurse practitioner, physician assistant, or
certified nurse midwife who is employed by, or receives compensation
from, the RHC or FQHC.
* * * * *
(4) The services are of a type which the nurse practitioner,
physician assistant, or certified nurse midwife who furnished the
service is legally permitted to perform by the State in which the
service is rendered.
0
12. Section 405.2415 is revised to read as follows:
Sec. 405.2415 Services and supplies incident to nurse practitioner,
physician assistant, certified nurse midwife, clinical psychologist, or
clinical social worker services.
(a) Services and supplies incident to a nurse practitioner,
physician assistant, certified nurse midwife, clinical psychologist, or
clinical social worker service are payable under this subpart if the
service or supply is all of the following:
(1) Of a type commonly furnished in physicians' offices.
(2) Of a type commonly rendered either without charge or included
in the RHC's bill.
(3) Furnished as an incidental, although integral part of
professional services furnished by a nurse practitioner, physician
assistant, certified nurse midwife, clinical psychologist, or clinical
social worker.
(4) Furnished under the direct, personal supervision of a
physician, nurse practitioner, physician assistant, certified nurse
midwife, clinical psychologist, or clinical social worker.
(5) In the case of a service, furnished by a member of the RHC's
health care staff who is an employee of the RHC.
(b) The direct personal supervision requirement is met in the case
of any of the following persons only if the person is permitted to
supervise these services under the written policies governing the RHC:
[[Page 58409]]
(1) Nurse practitioner.
(2) Physician assistant.
(3) Certified nurse midwife.
(4) Clinical psychologist.
(5) Clinical social worker.
(c) Only drugs and biologicals which cannot be self-administered
are included within the scope of this benefit.
0
13. Section 405.2416 is amended as follows:
0
A. Revising paragraphs (a) introductory text and (a)(1).
0
B. In paragraph (a)(2), removing the semicolon and adding a period in
its place.
0
C. Revising paragraphs (a)(3) and (4).
0
D. Revising paragraphs (b) introductory text and (b)(1).
The revisions read as follows:
Sec. 405.2416 Visiting nurse services.
(a) Visiting nurse services are covered if the services meet all of
the following:
(1) The RHC or FQHC is located in an area in which the Secretary
has determined that there is a shortage of home health agencies.
* * * * *
(3) The services are furnished by a registered professional nurse
or licensed practical nurse that is employed by, or receives
compensation for the services from the RHC or FQHC.
(4) The services are furnished under a written plan of treatment
that is both of the following:
(i)(A) Established and reviewed at least every 60 days by a
supervising physician of the RHC or FQHC; or
(B) Established by a nurse practitioner, physician assistant, or
certified nurse midwife and reviewed at least every 60 days by a
supervising physician.
(ii) Signed by the supervising physician, nurse practitioner,
physician assistant or certified nurse midwife of the RHC or FQHC.
(b) The nursing care covered by this section includes the
following:
(1) Services that must be performed by a registered professional
nurse or licensed practical nurse if the safety of the patient is to be
assured and the medically desired results achieved.
* * * * *
Sec. 405.2417 [Amended]
0
14. Section 405.2417 is amended as follows:
0
A. In the introductory text, removing the phrase ``rural health
clinic'' and adding in its place ``RHC or FQHC''.
0
B. In paragraph (a), removing the phrase ``rural health clinic'' and
adding in its place ``RHC or FQHC''.
0
C. In paragraph (b), removing ``; or'' and adding in its place ``.''.
0
15. Section 405.2430 is amended as follows:
0
A. Revising paragraphs (a)(1) introductory text and (a)(1)(i) and (ii).
0
B. In paragraph (a)(4), removing the phrase ``Federally qualified
health center'' and adding in its place the term ``FQHC''.
0
C. Revising paragraph (b).
0
D. Removing paragraph (c).
0
E. Redesignating paragraph (d) as paragraph (c).
The revisions read as follows:
Sec. 405.2430 Basic requirements.
(a) * * *
(1) In response to a request from an entity that wishes to
participate in the Medicare program, CMS enters into an agreement with
an entity when all of the following occur:
(i) HRSA approves the entity as meeting the requirements of section
330 of the PHS Act.
(ii) The entity assures CMS that it meets the requirements
specified in this subpart and part 491, as described in Sec.
405.2434(a).
* * * * *
(b) Prior HRSA FQHC determination. An entity applying to become a
FQHC must do the following:
(1) Be determined by HRSA as meeting the applicable requirements of
the PHS Act, as specified in Sec. 405.2401(b).
(2) Receive approval by HRSA as a FQHC under section 330 of the PHS
Act (42 U.S.C. 254b).
* * * * *
0
16. Section 405.2434 is amended as follows:
0
A. In the introductory text, removing the phrase ``Federally qualified
health center'' and adding in its place the term ``FQHC''.
0
B. In paragraph (a)(1), removing the phrase ``Federally qualified
health center'' and adding in its place the term ``FQHC'' each time it
appears.
0
C. In paragraph (a)(2), removing the term ``Centers'' and adding in its
place the term ``FQHCs''.
0
D. Revising paragraphs (b) and (c)(1).
0
E. In paragraph (c)(3), removing the phrase ``Federally qualified
health center'' and adding in its place the term ``FQHC'' each time it
appears.
0
F. Revising paragraph (c)(4).
0
G. In paragraphs (d)(1), (d)(3) introductory text, and (e)(1) through
(3) by removing the phrase ``Federally qualified health center'' and
adding in its place the term ``FQHC''.
0
H. In paragraphs (d)(3)(ii) and (e)(2) by removing the phrase
``Federally qualified health center's'' and adding in its place the
term ``FQHC's'' .
The revisions read as follows:
Sec. 405.2434 Content and terms of the agreement.
* * * * *
(b) Effective date of agreement. The effective date of the
agreement is determined in accordance with the provisions of Sec.
489.13.
(c) * * *
(1) For non-FQHC services that are billed to Part B, the
beneficiary is responsible for payment of a coinsurance amount which is
20 percent of the amount of Part B payment made to the center for the
covered services.
* * * * *
(4) The FQHC may charge the beneficiary for items and services that
are not FQHC services. If the item or service is covered under Medicare
Part B, the FQHC may not charge the beneficiary more than 20 percent of
the Part B payment amount.
* * * * *
Sec. 405.2436 [Amended]
0
17. Section 405.2436 is amended as follows:
0
A. In paragraphs (a) introductory text, (a)(2), (b)(1)(i), (b)(3),
(c)(1) introductory text, (c)(2), (c)(3), and (d) by removing the
phrase ``Federally qualified health center'' each time it appears and
adding in its place the term ``FQHC''.
0
B. In paragraphs (b)(1) introductory text, (b)(1)(ii), (b)(2)
introductory text, and (d) by removing the phrase ``Federally qualified
health center's'' and adding in its place the term ``FQHC's''.
0
18. Section 405.2440 is amended by revising the introductory text to
read as follows.
Sec. 405.2440 Conditions for reinstatement after termination by CMS.
When CMS has terminated an agreement with a FQHC, CMS does not
enter into another agreement with the FQHC to participate in the
Medicare program unless CMS--
* * * * *
Sec. 405.2442 [Amended]
0
19. Section 405.2442 is amended as follows:
0
A. In paragraph (a) introductory text by removing the phrase
``Federally qualified health center'' and adding in its place the term
``FQHC''.
0
B. In paragraph (b) by removing the phrase ``Federally qualified health
center's'' and adding in its place the term ``FQHC's''.
Sec. 405.2444 [Amended]
0
20. Section 405.2444 is amended as follows:
[[Page 58410]]
0
A. In paragraph (c), removing the phrase ``Federally qualified health
center'' and adding in its place the term ``FQHC'' each time it
appears.
0
B. In paragraphs (a)(2) and (c) by removing the term ``center'' each
time it appears, and by adding in its place the term ``FQHC'' .
0
21. Section 405.2446 is amended as follows:
0
A. Revising paragraphs (a), (b)(2), (3), (4), and (6).
0
B. Removing paragraph (b)(8).
0
C. Redesignating paragraphs (b)(9) and (10) as (b)(8) and (9),
respectively.
0
D. In paragraphs (c) and (d), removing the phrase ``Federally quality
health center'' and adding in its place the term ``FQHC''.
The revisions read as follows:
Sec. 405.2446 Scope of services.
(a) For purposes of this section, the terms rural health clinic and
RHC when they appear in the cross references in paragraph (b) of this
section also mean Federally qualified health centers and FQHCs.
(b) * * *
(2) Services and supplies furnished as incident to a physician's
professional service, as specified in Sec. 405.2413.
(3) Nurse practitioner, physician assistant or certified nurse
midwife services as specified in Sec. 405.2414.
(4) Services and supplies furnished as incident to a nurse
practitioner, physician assistant, or certified nurse midwife service,
as specified in Sec. 405.2415.
* * * * *
(6) Services and supplies furnished as incident to a clinical
psychologist or clinical social worker service, as specified in Sec.
405.2452.
* * * * *
0
22. Section 405.2448 is amended as follows:
0
A. Revising paragraphs (a) introductory text and (a)(1) through (3).
0
B. In paragraph (b) introductory text, removing the phrase ``Federally
quality health centers'' and adding in its place the term ``FQHCs''.
0
C. In paragraph (d), removing the phrase ``a Federally qualified health
center service, but may be provided at a Federally qualified health
center if the center'' and adding in its place the phrase ``FQHC
service, but may be provided at a FQHC if the FQHC''.
The revisions read as follows:
Sec. 405.2448 Preventive primary services.
(a) Preventive primary services are those health services:
(1) A FQHC is required to provide as preventive primary health
services under section 330 of the PHS Act.
(2) Furnished by or under the direct supervision of a physician,
nurse practitioner, physician assistant, certified nurse midwife,
clinical psychologist or clinical social worker.
(3) In the case of a service, furnished by a member of the FQHC's
health care staff who is an employee of the FQHC or by a physician
under arrangements with the FQHC.
* * * * *
Sec. 405.2449 [Amended]
0
23. Section 405.2449 is amended as follows:
0
A. In the introductory text, removing the phrase ``Federally qualified
health center'' and adding in its place the term ``FQHC''.
0
B. In paragraph (b), removing ``; and'' and adding in its place ``.''.
Sec. 405.2452 [Amended]
0
24. Section 405.2452 is amended as follows:
0
A. In paragraph (a)(2), by removing the phrase ``Federally quality
health center's'' and adding in its place the term ``FQHC's''.
0
B. In paragraph (b), by removing the phrase ``Federally quality health
center'' and adding in its place the term ``FQHC''.
0
C. In paragraph (a)(5), removing the term ``center'' and adding in its
place the term ``FQHC''.
0
25. Section 405.2460 is revised to read as follows:
Sec. 405.2460 Applicability of general payment exclusions.
The payment conditions, limitations, and exclusions set out in
subpart C of this part, part 410 and part 411 of this chapter are
applicable to payment for services provided by RHCs and FQHCs, except
that preventive primary services, as defined in Sec. 405.2448, are
statutorily authorized in FQHCs and not excluded by the provisions of
section 1862(a) of the Act.
0
26. Section 405.2462 is revised to read as follows:
Sec. 405.2462 Payment for RHC and FQHC services.
(a) Payment to provider-based RHCs and FQHCs that are authorized to
bill under the reasonable cost system. A RHC or FQHC that is authorized
to bill under the reasonable cost system is paid in accordance with
parts 405 and 413 of this subchapter, as applicable, if the RHC or FQHC
is--
(1) An integral and subordinate part of a hospital, skilled nursing
facility or home health agency participating in Medicare (that is, a
provider of services); and
(2) Operated with other departments of the provider under common
licensure, governance and professional supervision.
(b) Payment to independent RHCs and freestanding FQHCs that are
authorized to bill under the reasonable cost system. (1) RHCs and FQHCs
that are authorized to bill under the reasonable cost system are paid
on the basis of an all-inclusive rate for each beneficiary visit for
covered services. This rate is determined by the MAC, in accordance
with this subpart and general instructions issued by CMS.
(2) The amount payable by the MAC for a visit is determined in
accordance with paragraphs (e)(1) and (2) of this section.
(c) Payment to FQHCs that are authorized to bill under the
prospective payment system. A FQHC that is authorized to bill under the
prospective payment system is paid a single, per diem rate based on the
prospectively set rate for each beneficiary visit for covered services.
This rate is adjusted for the following:
(1) Geographic differences in cost based on the Geographic Practice
Cost Indices (GPCIs) in accordance with 1848(e) of the Act and 42 CFR
414.2 and 414.26 and used to adjust payment under the physician fee
schedule, limited to only the work and practice expense GPCIs.
(2) Furnishing of care to a new patient with respect to the FQHC,
including all sites that are part of the FQHC, or to a beneficiary
receiving a comprehensive initial Medicare visit (that is an initial
preventive physical examination or an initial annual wellness visit). A
new patient is one that has not been seen in the FQHC's organization
within the previous 3 years.
(d) For FQHC visits, Medicare pays 80 percent of the all-inclusive
rate for FQHCs that are authorized to bill under the reasonable cost
system, and 80 percent of the lesser of the FQHC's charge or the PPS
encounter rate for FQHCs authorized to bill under the PPS. No
deductible is applicable to FQHC services.
(e) For RHCs visits, payment is made in accordance with one of the
following:
(1) If the deductible has been fully met by the beneficiary prior
to the RHC, Medicare pays 80 percent of the all-inclusive rate.
(2) If the deductible has not been fully met by the beneficiary
before the visit, and the amount of the RHC's reasonable customary
charge for the services that is applied to the deductible is less than
the all-inclusive rate, the amount applied to the deductible is
subtracted from the all-
[[Page 58411]]
inclusive rate and 80 percent of the remainder, if any, is paid to the
RHC.
(3) If the deductible has not been fully met by the beneficiary
before the visit, and the amount of the RHC's reasonable customary
charge for the services that is applied to the deductible is equal to
or exceeds the all-inclusive rate, no payment is made to the RHC.
(f) To receive payment, the FQHC or RHC must do all of the
following:
(1) Furnish services in accordance with the requirements of subpart
X of part 405 of this chapter and subpart A of part 491 of this
chapter.
(2) File a request for payment on the form and manner prescribed by
CMS.
27. Section 405.2463 is revised to read as follows:
Sec. 405.2463 What constitutes a visit.
(a) Visit. (1) General. (i) For RHCs, a visit is a face-to-face
encounter between a RHC patient and one of the following:
(A) Physician.
(B) Physician assistant.
(C) Nurse practitioner.
(D) Certified nurse midwife.
(E) Visiting registered professional or licensed practical nurse.
(G) Clinical psychologist.
(H) Clinical social worker.
(I) Qualified transitional care management service.
(ii) For FQHCs, a visit is either of the following:
(A) A face-to-face encounter as described in paragraph (a)(1)(i) of
this section.
(B) A face-to-face encounter between a patient and one of the
following:
(1) A qualified provider of medical nutrition therapy services as
defined in part 410 subpart G of this chapter.
(2) A qualified provider of outpatient diabetes self-management
training services as defined in part 410 subpart H of this chapter.
(2) Medical visit. (i) A medical visit is a face-to-face encounter
between a RHC or FQHC patient and one of the following:
(A) Physician.
(B) Physician assistant.
(C) Nurse practitioner.
(D) Certified nurse midwife.
(E) Visiting registered professional or licensed practical nurse.
(i) A medical visit for FQHCs may also include a--
(A) Medical nutrition therapy visit; or
(B) Diabetes outpatient self-management training visit.
(3) Mental health visit. A mental health visit is a face-to-face
encounter between a RHC or FQHC patient and one of the following:
(i) Clinical psychologist.
(ii) Clinical social worker.
(iii) Other RHC or FQHC practitioner for mental health services.
(b) Encounters and Payment for RHCs and FQHCs that are not being
paid under section 1834(o) of the Act. (1) For RHCs and FQHCs that are
authorized to bill under the reasonable cost system, encounters with
more than one health professional and multiple encounters with the same
health professional that take place on the same day and at a single
location constitute a single visit, except when one of the following
conditions exist:
(i) The patient, subsequent to the first visit, suffers an illness
or injury that requires additional diagnosis or treatment on the same
day.
(ii) The patient has a medical visit and a mental health visit on
the same day.
(iii) The patient has an initial preventive physical exam visit and
a separate medical or mental health visit on the same day.
(2) For RHCs and FQHCs that are authorized to bill under the
reasonable cost system. Medicare pays RHCs and FQHCs that are not being
paid under section 1834(o) of the Act for more than 1 visit per day
when the conditions in paragraph (b) of this section are met.
0
28. Section 405.2464 is revised to read as follows:
Sec. 405.2464 Payment rate.
(a) Determination of the payment rate for RHCs and FQHCs that are
authorized to bill on the basis of reasonable cost. (1) An all-
inclusive rate is determined by the MAC at the beginning of the cost
reporting period.
(2) The rate is determined by dividing the estimated total
allowable costs by estimated total visits for RHC or FQHC services.
(3) The rate determination is subject to any tests of
reasonableness that may be established in accordance with this subpart.
(4) The MAC, during each reporting period, periodically reviews the
rate to assure that payments approximate actual allowable costs and
visits and adjusts the rate if:
(i) There is a significant change in the utilization of services;
(ii) Actual allowable costs vary materially from allowable costs;
or
(iii) Other circumstances arise which warrant an adjustment.
(5) The RHC or FQHC may request the MAC to review the rate to
determine whether adjustment is required.
(b) Determination of the payment rate for FQHCs billing under the
prospective payment system. (1) An encounter-based rate is calculated
by CMS by dividing total FQHC costs by total FQHC encounters to
establish an average cost per encounter.
(2) The exceptions in Sec. 405.2463(b) do not apply.
(3) The encounter-based rate is adjusted--
(i) For geographic differences in the cost of inputs according to
Sec. 405.2462(c)(1).
(ii) When the FQHC furnishes services to a new patient, as defined
in Sec. 405.2462(b)(3)(ii).
(iii) When a beneficiary receives a comprehensive initial Medicare
visit (that is, an initial preventive physical examination or an
initial annual wellness visit).
0
29. Section 405.2466 is amended as follows:
0
A. By revising paragraph (a) and the paragraph (b) heading.
0
B. In paragraph (b)(1) introductory text by removing the term
``intermediary'' each time it appears and by adding in its place the
term ``MAC''.
0
C. In paragraphs (b)(1)(i), and (b)(1)(ii) by removing the term ``rural
health clinic'' each time it appears and by adding in its place the
term ``RHC''.
0
D. Revising paragraph (b)(1)(iii).
0
E. In paragraph (b)(1)(iv) by removing the term ``rural health
clinics'' and by adding in its place the term ``RHCs''.
0
F. In paragraphs (b)(1)(i), and (b)(1)(ii) by removing the term
``Federally qualified health center'' and by adding in its place the
term ``FQHC''.
0
G. In paragraphs (b)(1) introductory text, (b)(2), (c)(1), and (c)(2)
by removing the word ``clinic'' each time it appears and by adding in
its place the term ``RHC''.
0
H. In paragraphs (b)(1) introductory text, (b)(2), (c)(1), (c)(2), and
(d)(2) by removing the word ``center'' each time it appears and by
adding in its place the term ``FQHC''.
0
I. Revising paragraphs (c) introductory text, and (d)(1).
0
J. In paragraph (d)(2) by removing the term ``intermediary'' each time
it appears and by adding in its place the term ``MAC''.
The revisions read as follows:
Sec. 405.2466 Annual reconciliation.
(a) General. Payments made to RHCs or FQHCs that are authorized to
bill under the reasonable cost system during a reporting period are
subject to annual reconciliation to assure that those payments do not
exceed or fall short of the allowable costs attributable to covered
services furnished to Medicare beneficiaries during that period.
(b) Calculation of reconciliation for RHCs or FQHCs that are
authorized to bill under the reasonable cost system.
(1) * * *
[[Page 58412]]
(iii) The total payment due the RHC is 80 percent of the amount
calculated by subtracting the amount of deductible incurred by
beneficiaries that is attributable to RHC services from the cost of
these services. FQHC services are not subject to a deductible and the
payment computation for FQHCs does not include a reduction related to
the deductible.
* * * * *
(c) Notice of program reimbursement. The MAC notifies the RHC or
FQHC that is authorized to bill under the reasonable costs system:
* * * * *
(d) * * *
(1) Underpayments. If the total reimbursement due the RHC or FQHC
that is authorized to bill under the reasonable cost system exceeds the
payments made for the reporting period, the MAC makes a lump-sum
payment to the RHC or FQHC to bring total payments into agreement with
total reimbursement due the RHC or FQHC.
* * * * *
0
30. Add Sec. 405.2467 to read as follows:
Sec. 405.2467 Requirements of the FQHC PPS.
(a) Cost reporting. For cost reporting periods beginning on or
after October 1, 2014, FQHCs are paid on a PPS basis that does all of
the following:
(1) Includes a process for appropriately describing the services
furnished by FQHCs.
(2) Establishes payment rates for specific payment codes based on
such appropriate descriptions of services.
(3) Takes into account the type, intensity and duration of services
furnished by FQHCs.
(4) May include adjustments (such as geographic adjustments)
determined by the Secretary.
(b) HCPCS coding. FQHCs are required to submit HCPCS codes in
reporting services furnished.
(c) Initial payments. (1) Beginning October 1, 2014, for the first
fifteen months of the PPS, the estimated aggregate amount of PPS rates
is equal to 100 percent of the estimated amount of reasonable costs
that would have occurred for that period if the PPS had not been
implemented.
(2) Payment amount is calculated prior to any FQHC payments based
on the reasonable cost system.
(d) Payments in subsequent years. (1) Beginning January 1, 2016,
PPS payment rates will be increased by the percentage increase in the
Medicare economic index.
(2) Beginning January 1, 2017, PPS rates will be increased by the
percentage increase in a market basket of FQHC goods and services as
established through regulations, or, if not available, the Medicare
economic index.
0
31. Section 405.2468 is amended:
0
A. In paragraph (a) by removing the word ``intermediary'', and by
adding in its place the word ``MAC''.
0
B. In paragraphs (b) introductory text and (c) by removing the term
``rural health clinic'' and by adding in its place the term ``RHC''.
0
C. In paragraph (b) introductory text by removing the term ``Federally
qualified health center'' and by adding in its place the term ``FQHC''.
0
D. In paragraphs (b)(4), (b)(5), (d)(2)(iv), and (d)(2)(v) by removing
the word ``clinic'' each time it appears and by adding in its place the
term ``RHC''.
0
E. In paragraphs (b)(4), (b)(5), (d)(2)(iv), (d)(2)(v) by removing the
word ``center'' each time it appears and by adding in its place the
term ``FQHC''.
0
F. Revising paragraphs (b)(1), (c), and (d)(1).
The revisions read as follows:
Sec. 405.2468 Allowable costs.
* * * * *
(b) * * *
(1) Compensation for the services of a physician, physician
assistant, nurse practitioner, certified nurse-midwife, visiting
registered professional or licensed practical nurse, clinical
psychologist, and clinical social worker who owns, is employed by, or
furnishes services under contract to a FQHC or RHC.
* * * * *
(c) Tests of reasonableness of cost and utilization. Tests of
reasonableness authorized by sections 1833(a) and 1861(v)(1)(A) of the
Act may be established by CMS or the MAC with respect to direct or
indirect overall costs, costs of specific items and services, or costs
of groups of items and services. For RHCs and FQHCs that are authorized
to bill under the reasonable cost system, these tests include, but are
not limited to, screening guidelines and payment limits.
(d) Screening guidelines. (1) Costs in excess of amounts
established by the guidelines are not included unless the RHC or FQHC
that is authorized to bill under the reasonable cost system provides
reasonable justification satisfactory to the MAC.
* * * * *
0
32. Section 405.2469 is revised by to read as follows:
Sec. 405.2469 Federally qualified health centers (FQHCs) supplemental
payments.
(a) Eligibility for supplemental payments. FQHCs under contract
(directly or indirectly) with MA organizations are eligible for
supplemental payments for FQHC services furnished to enrollees in MA
plans offered by the MA organization to cover the difference, if any,
between their payments from the MA plan and what they would receive
either:
(1) Under the reasonable cost payment system if the FQHC is
authorized to bill under the reasonable cost payment system, or
(2) The PPS rate if the FQHC is authorized to bill under the PPS.
(b) Calculation of supplemental payment. The supplemental payment
for FQHC covered services provided to Medicare patients enrolled in MA
plans is based on the difference between--
(1) Payments received by the FQHC from the MA plan as determined on
a per visit basis and the FQHCs all-inclusive cost-based per visit rate
as set forth in this subpart, less any amount the FQHC may charge as
described in section 1857(e)(3)(B) of the Act, or.
(2) Payments received by the FQHC from the MA plan as determined on
a per visit basis and the FQHC PPS rate as set forth in this subpart,
less any amount the FQHC may charge as described in section
1857(e)(3)(B) of the Act.
(c) Financial incentives. Any financial incentives provided to
FQHCs under their MA contracts, such as risk pool payments, bonuses, or
withholds, are prohibited from being included in the calculation of
supplemental payments due to the FQHC.
(d) Per visit supplemental payment. A supplemental payment required
under this section is made to the FQHC when a covered face-to-face
encounter occurs between a MA enrollee and a practitioner as set forth
in Sec. 405.2463.
Sec. 405.2470 [Amended]
0
33. Section 405.2470 is amended by:
0
A. In paragraphs (a)(1), (b)(1), and (c)(3) through (5) by removing the
word ``intermediary'', and by adding in its place the word ``MAC''.
0
B. In paragraphs (b)(2), by removing the word ``intermediary's'' and
adding in its place the word ``MAC's''.
0
C. In paragraphs (a) introductory text, (c)(1), and (c)(2)(i) and (ii)
by removing the term ``rural health clinic'' and by adding in its place
the term ``RHC''.
0
D. In paragraphs (a) introductory text, (c)(1), and (c)(2)(i) and (ii)
by removing the term ``Federally qualified health center'' and by
adding in its place the term ``FQHC''.
0
E. In paragraphs (b)(1) and (2), (c)(1), (c)(2) introductory text, and
(c)(3) through (6) by removing the word ``clinic'' and by adding in its
place the term ``RHC''.
[[Page 58413]]
0
F. In paragraphs (b)(1) and (2), (c)(1), (c)(2) introductory text, and
(c)(3) through (6) by removing the word ``center'' each time it appears
and by the term ``FQHC''.
0
34. Section 405.2472 is amended by revising paragraph (a) to read as
follows:
Sec. 405.2472 Beneficiary appeals.
* * * * *
(a) The beneficiary is dissatisfied with a MAC's determination
denying a request for payment made on his or her behalf by a RHC or
FQHC;
* * * * *
PART 491--CERTIFICATION OF CERTAIN HEALTH FACILITIES
0
35. The authority citation for part 491 continues to read as follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302); and sec. 353 of the Public Health Service Act (42 U.S.C.
263a).
0
36. Section 491.8 is amended by revising paragraph (a)(3).
Sec. 491.8 Staffing and staff responsibilities.
(a) * * *
(3) The physician assistant, nurse practitioner, nurse-midwife,
clinical social worker or clinical psychologist member of the staff may
be the owner or an employee of the clinic or center, or may furnish
services under contract to the clinic or center. In the case of a
clinic, at least one physician assistants or nurse practitioner must be
an employee of the clinic.
* * * * *
PART 493--LABORATORY REQUIREMENTS
0
37. The authority citation for Part 493 is revised to read as follows:
Authority: Sec. 353 of the Public Health Service Act, secs.
1102, 1861(e), the sentence following sections 1861(s)(11) through
1861(s)(16) of the Social Security Act (42 U.S.C. 263a, 1302,
1395x(e), the sentence following 1395x(s)(11) through 1395x(s)(16)),
and the Public Law 112-202 amendments to 42 U.S.C 263a.
0
38. Section 493.1 is amended by revising the second sentence to read as
follows:
Sec. 493.1 Basis and scope.
* * * It implements sections 1861 (e) and (j), the sentence
following section 1861(s)(13), and 1902(a)(9) of the Social Security
Act, and section 353 of the Public Health Service Act, as amended by
section 2 of the Taking Essential Steps for Testing Act of 2012. * * *
0
39. Section 493.2 is revised by adding the definition of ``Repeat
proficiency testing referral'' in alphabetical order to read as
follows:
Sec. 493.2 Definitions.
* * * * *
Repeat proficiency testing referral means a second instance in
which a proficiency testing sample, or a portion of a sample, is
referred, for any reason, to another laboratory for analysis prior to
the laboratory's proficiency testing program event cut-off date within
the period of time encompassing the two prior survey cycles (including
initial certification, recertification, or the equivalent for
laboratories surveyed by an approved accreditation organizations).
* * * * *
0
40. Section 493.1800 is amended by revising paragraph (a)(2)
introductory text to read as follows:
Sec. 493.1800 Basis and scope.
(a) * * *
(2) The Clinical Laboratories Improvement Act of 1967 (section 353
of the Public Health Service Act) as amended by CLIA 1988, as amended
by section 2 of the Taking Essential Steps for Testing Act of 2012.
* * * * *
0
41. Section 493.1840 is amended by revising paragraph (b) to read as
follows:
Sec. 493.1840 Suspension, limitation, or revocation of any type of
CLIA certificate.
* * * * *
(b) Adverse action based on improper referrals in proficiency
testing. If CMS determines that a laboratory has intentionally referred
its proficiency testing samples to another laboratory for analysis, CMS
does one of the following:
(1) Revokes the laboratory's CLIA certificate for at least 1 year,
prohibits the owner and operator from owning or operating a CLIA-
certified laboratory for at least 1 year, and may also impose a civil
money penalty in accordance with Sec. 493.1834(d), if CMS determines
that--
(i) A proficiency testing referral is a repeat proficiency testing
referral as defined at Sec. 493.2; or
(ii) On or before the proficiency testing event close date, a
laboratory reported proficiency testing results obtained from another
laboratory to the proficiency testing program.
(2) Suspends or limits the CLIA certificate for less than 1 year
based on the criteria in Sec. 493.1804(d), and also impose alternate
sanctions as appropriate, in accordance with Sec. Sec. 493.1804(c) and
(d), 493.1806(c), 493.1807(b), 493.1809 and, in the case of civil money
penalties, Sec. 493.1834(d), when CMS determines that paragraph
(b)(1)(i) or (ii) of this section does not apply but that the
laboratory obtained test results for the proficiency testing samples
from another laboratory on or before the proficiency testing event
close date. Among other possibilities, alternative sanctions will
always include a civil money penalty and a directed plan of correction
that includes required training of staff.
(3) Imposes alternate sanctions in accordance with Sec. Sec.
493.1804(c) and (d), 493.1806(c), 493.1807(b), 493.1809 and, in the
case of civil money penalties, Sec. 493.1834(d), when CMS determines
that paragraph (b)(1) or (2) of this section do not apply, and a PT
referral has occurred, but no test results are received prior to the
event close date by the referring laboratory from the laboratory that
received the referral. Among other possibilities, alternative sanctions
will always include a civil money penalty and a directed plan of
correction that includes required training of staff.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare
Supplementary Medical Insurance Program)
Dated: September 5, 2013.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
Approved: September 10, 2013.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
Note: The following Addendum will not appear in the Code of
Federal Regulations.
Addendum: Proposed Geographic Adjustment Factors (GAFs) for the FQHC
PPS
As described in section II.C.2. of this proposed rule, the
proposed GAFs for the FQHC PPS are based on the proposed CY 2014
work and practice expense GPCIs and the proposed cost share weights
for the CY 2014 GPCI update, as published in the CY 2014 PFS
proposed rule. These GAFs are subject to change in the final FQHC
PPS rule based on more current data, including the finalized PFS
GPCI and cost share weight values.
------------------------------------------------------------------------
Locality name GAF
------------------------------------------------------------------------
1 Alabama...................................................... 0.933
2 Alaska....................................................... 1.306
3 Arizona...................................................... 0.984
4 Arkansas..................................................... 0.919
5 Anaheim/Santa Ana, CA........................................ 1.122
6 Los Angeles, CA.............................................. 1.095
7 Marin/Napa/Solano, CA........................................ 1.154
8 Oakland/Berkeley, CA......................................... 1.152
9 San Francisco, CA............................................ 1.215
10 San Mateo, CA............................................... 1.209
11 Santa Clara, CA............................................. 1.203
12 Ventura, CA................................................. 1.104
13 Rest of California.......................................... 1.053
14 Colorado.................................................... 1.002
15 Connecticut................................................. 1.066
[[Page 58414]]
16 DC + MD/VA Suburbs.......................................... 1.120
17 Delaware.................................................... 1.024
18 Fort Lauderdale, FL......................................... 1.013
19 Miami, FL................................................... 1.016
20 Rest of Florida............................................. 0.973
21 Atlanta, GA................................................. 1.005
22 Rest of Georgia............................................. 0.940
23 Hawaii/Guam................................................. 1.075
24 Idaho....................................................... 0.935
25 Chicago, IL................................................. 1.032
26 East St. Louis, IL.......................................... 0.962
27 Suburban Chicago, IL........................................ 1.040
28 Rest of Illinois............................................ 0.944
29 Indiana..................................................... 0.947
30 Iowa........................................................ 0.929
31 Kansas...................................................... 0.933
32 Kentucky.................................................... 0.925
33 New Orleans, LA............................................. 0.983
34 Rest of Louisiana........................................... 0.929
35 Southern Maine.............................................. 0.998
36 Rest of Maine............................................... 0.940
37 Baltimore/Surr. Cntys, MD................................... 1.058
38 Rest of Maryland............................................ 1.023
39 Metropolitan Boston......................................... 1.081
40 Rest of Massachusetts....................................... 1.037
41 Detroit, MI................................................. 1.009
42 Rest of Michigan............................................ 0.957
43 Minnesota................................................... 1.005
44 Mississippi................................................. 0.916
45 Metropolitan Kansas City, MO................................ 0.968
46 Metropolitan St Louis, MO................................... 0.974
47 Rest of Missouri............................................ 0.905
48 Montana..................................................... 0.974
49 Nebraska.................................................... 0.938
50 Nevada...................................................... 1.026
51 New Hampshire............................................... 1.021
52 Northern NJ................................................. 1.108
53 Rest of New Jersey.......................................... 1.070
54 New Mexico.................................................. 0.954
55 Manhattan, NY............................................... 1.107
56 NYC Suburbs/Long I., NY..................................... 1.123
57 Poughkpsie/N NYC Suburbs, NY................................ 1.038
58 Queens, NY.................................................. 1.122
59 Rest of New York............................................ 0.965
60 North Carolina.............................................. 0.953
61 North Dakota................................................ 0.982
62 Ohio........................................................ 0.959
63 Oklahoma.................................................... 0.913
64 Portland, OR................................................ 1.024
65 Rest of Oregon.............................................. 0.975
66 Metropolitan Philadelphia, PA............................... 1.043
67 Rest of Pennsylvania........................................ 0.957
68 Puerto Rico................................................. 0.808
69 Rhode Island................................................ 1.035
70 South Carolina.............................................. 0.945
71 South Dakota................................................ 0.974
72 Tennessee................................................... 0.936
73 Austin, TX.................................................. 1.001
74 Beaumont, TX................................................ 0.941
75 Brazoria, TX................................................ 1.002
76 Dallas, TX.................................................. 1.013
77 Fort Worth, TX.............................................. 0.995
78 Galveston, TX............................................... 1.009
79 Houston, TX................................................. 1.009
80 Rest of Texas............................................... 0.952
81 Utah........................................................ 0.945
82 Vermont..................................................... 0.991
83 Virginia.................................................... 0.986
84 Virgin Islands.............................................. 1.000
85 Seattle (King Cnty), WA..................................... 1.083
86 Rest of Washington.......................................... 1.003
87 West Virginia............................................... 0.901
88 Wisconsin................................................... 0.972
89 Wyoming..................................................... 0.989
------------------------------------------------------------------------
[FR Doc. 2013-22821 Filed 9-18-13; 2:00 pm]
BILLING CODE 4120-01-P