The Centers for Medicare and Medicaid Services has released a proposed rule to establish methodology and payment rates for a prospective payment system for services provided at federally qualified health centers under Medicare Part B, starting in October 2014. The new PPS is required under the Affordable Care Act.

Under the rule, CMS proposes a national encounter-based payment rate for all FQHCs for professional services furnished per beneficiary per day, saying the rate will be appropriate while remaining administratively simple. The encounter-based rate would be calculated based on an average cost per visit (total FQHC cost divided by total FQHC encounters) using Medicare cost report and claims data. The rate, however, would be adjusted for geographic differences. There are provisions for beneficiaries being treated more than once in a given day at the same center.

Initial payments under the new FQHC prospective payment system must equal 100 percent of the estimated amount of reasonable costs. CMS estimates that the new payment system will increase total Medicare payments to FQHCs by about 30 percent.

The proposed rule explains how to access data from several CMS computer systems. These include data summarized by the CMS Certification Number, the list of proposed Geographic Adjustment Factors, and the most current version of each cost report filed in the Healthcare Cost Report Information System.

The rule also includes a substantial new policy for rural health clinics to ease their challenges in recruiting clinicians. The clinics would be permitted to contract with non-physician practitioners with the provision that at least one nurse practitioner or physician assistant is employed in a clinic.

The rule, available here, is being published on September 23 with comments accepted until November 18.

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