A new Medicare prospective payment system for federally qualified health centers offers improved reimbursement rates.
The Centers for Medicare & Medicaid Services (CMS) final rule issued at the end of April establishes a Medicare prospective payment system for FQHCs and increases payment to them by as much as 32 percent for services delivered to beneficiaries in medically underserved areas.
FQHCs are generally required to treat all patients regardless of their ability to pay. Medicare currently pays them based on reasonable costs subject to established payment limits for covered services furnished to people with Medicare. The healthcare law requires that a new Medicare prospective payment system for FQHCs be established and account for a number of factors, including the type, intensity and duration of services provided in this setting.
According to a news release from CMS about the final rule, under the new PPS, Medicare will pay FQHCs a single encounter rate per beneficiary per day for all services provided, with some exceptions. The rate will be adjusted for geographic variation in costs. The rate will also be adjusted for the higher costs associated with furnishing care to a patient who is new to the FQHC and when the FQHC furnishes an initial preventive physical examination or an annual wellness visit to a Medicare beneficiary.
Sharon Beaty, CEO at Mid-State Health Center, a FQHC in Plymouth, N.H., said that while Mid-State won't see significant changes coming from the changes to the PPS, they will see a larger portion of their expenses reimbursed due to the higher cap coming from CMS.
"While the increases will not completely reimburse us for our costs, it'll be much better than what we had," she said. "I think other FQHCs likely feel the same way we do – happy to have this increase."
Beaty explained that the changes will not impact quality measures or Mid-State's current efforts in sustaining integrated care in the community.
"We've always been working on our quality measures here, and while the increased payments won't increase our abilities to monitor quality, we will be able to sustain our current efforts," she said.
The new payments will take effect starting on Oct. 1, 2014, and FQHCs will be transitioned to the new reimbursement method throughout 2015, depending on when their new fiscal year begins.
The final rule was posted in the Federal Register on May 2. CMS is seeking comments on modifications to some proposals in the rule. Comments will be accepted until July 1.