CMS Finalizes PPS for FQHCs

A final rule that could increase payments for Federally Qualitfied Health Centers (FQHC) by as much as 32 percent was released April 29, 2014 by the Centers for Medicare & Medicaid Services (CMS). The rule establishes a Medicare Prospective Payment System (MPPS) for FQHCs.
FQHCs provide access to medical services to millions of patients in or from medically under-served areas. Medicare pays them based on reasonable costs subject to established payment limits for covered services furnished to people with Medicare. The Affordable Care Act (ACA) requires that the new MPPS account for a number of factors, including the type, intensity, and duration of services provided in this setting. The new payment system will be implemented beginning October 1, 2014. FQHCs will be transitioned to the new payment system throughout 2015.
Under the new MPPS, 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 that is new to the FQHC and when the FQHC furnishes an initial preventive physical examination or an annual wellness visit to a Medicare beneficiary. The same services that have been paid for by Medicare in the past will continue to be covered under the new system.
CMS worked on the proposed and final rules in close collaboration with the Health Resources and Services Administration, which administers the Health Center Program. The final rule was published in the Federal Register May 2, 2014.  In the final rule, CMS seeks comments on modifications of a few proposals including: a simplified method for calculating coinsurance when a preventive and non-preventive service is on the same claim; the establishment of Medicare-specific payment codes to be used for Medicare encounter-based payment under the new MPPS; and ways in which payment for chronic care management services could be adapted for FQHCs and rural health clinics. CMS will accept comments until July 1, 2014, and will respond to them in a final rule to be issued in 2014.

Brad Ericson
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Brad Ericson, MPC, CPC, COSC, is a seasoned healthcare writer and editor. He directed publishing at AAPC for nearly 12 years and worked at Ingenix for 13 years and Aetna Health Plans prior to that. He has been writing and publishing about healthcare since 1979. He received his Bachelor's in Journalism from Idaho State University and his Master's of Professional Communication degree from Westminster College of Salt Lake City.

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