Summary
The Centers for Medicare and Medicaid Services (CMS) issued a final rule on December 24, 2003 relating to Rural Health Clinics (RHC). Much of this rule was adopted in response to statutory requirements signed into law in 1997 (Balanced Budget Act of 1997). In addition to changes in the RHC certification requirements, the new rules implement a mechanism for decertification of Rural Health Clinics. Furthermore, the new rules eliminate the requirement that Rural Health Clinics undertake an annual program review and replace this requirement with a new Quality Assessment and Performance Improvement program (QAPI) initiative.

Although the new rules are generally effective beginning February 23, 2004, the fact is that some of these new requirements (i.e. QAPI) will take some time to be fully operational.

The Rule

• Stipulates that all Rural Health Clinics must be located in “currently” designated shortage areas.
• Establishes a mechanism for RHCs that can no longer meet the location requirements to apply for an exception to this requirement and continue to participate in the RHC program. Limits waivers of non-physician provider staffing.
• Codifies the definition of a “bed” for purposes of the RHC cap exception for hospitals with fewer than 50 beds.
• Codifies the RHC payment limits previously extended to most provider-based RHCs.
• Codifies PA/NP/CNM staffing requirement at 50% of time clinic is open to see patients
• Restricts PA/NP/CNM staffing waiver requests to already certified RHCs.
• Clarifies Medicare policy as it relates to so-called commingling
• Mandates the establishment of a Quality Assessment Performance Improvement initiative by RHCs.

Commingling
Facilities may not be simultaneously operated as an RHC and a traditional fee-for-service Medicare practice. RHC practitioners who are “on the RHC clock” cannot bill Medicare Part B for covered services that would have otherwise been covered as RHC services. The key word here is the simultaneous.

Non-RHC practitioners may provide Medicare covered services to Medicare beneficiaries within the four walls of the RHC. The non-RHC practitioner may bill Medicare Part B for these covered services. If a non-RHC practitioner provides these services and bills Part B, proper care must be taken to adjust the cost report with regard to administration and overhead associated with this “shared space” to prevent double billing.

Hospitals located in extremely rural areas that operate an RHC, are given a special exception to simultaneously share personnel between the RHC and the rural hospital without violating the commingling requirements.

Hospital Bed
The rule codifies the definition of a hospital bed for purposes of qualifying for Cap exception. Federal law mandates that all RHCs are subject to the RHC per visit payment cap except those operated by hospitals with fewer than 50 beds. A “counted bed” is defined as:

• A hospital bed that is available (i.e. meets the definition found in Sec. 412.105(b) of 42 CFR, Chapter IV);

OR

In the case of a hospital with more than 50 beds, that is a sole community hospital as determined in accordance with Sec. 412.92 or 412.109(a) of 42 CFR, Chapter IV, AND;

• is located in a level 8 or level 9 non-metropolitan county using urban influence codes as defined by the U.S. Department of Agriculture; AND
• has an average daily patient census that does not exceed 40

RHC certification
New facilities seeking RHC certification that are areas with outdated shortage area designations cannot be certified as RHCs. Existing RHCs that no longer meet the location criteria may be decertified.

In order for a shortage area (HPSA, MUA or governor designated area) to be considered current, the area must have been designated and/or updated within the three year period prior to RHC certification or recertification.

In order for a facility to retain its RHC certification, despite no longer being located in a valid shortage area, the RHC must demonstrate that it is an “essential provider”. The new rules identify four types of essential providers:

1. Sole community provider,
2. Major community provider,
3. Specialty clinic, or
4. Extremely rural community provider

QAPI Program
The new rules eliminate the requirement that RHCs conduct an annual program evaluation and replace that requirement with a new standard. Effective in February, RHCs will not implement a Quality Assessment Performance Improvement program.

In order to meet the QAPI requirement, the program must:

a. be appropriate to the complexity of the RHC operations,
b. data driven, and
c. focused on improving outcomes in patient safety, quality of care and patient satisfaction.

The QAPI program must include objective measures for at least four organizational processes and clinic utilization.

The number and complexity of projects will depend on the size and resources of the RHC.

The RHCs professional staff, administration, and board are responsible for setting the scope and priorities of the QAPI program.

If you would like a copy of the final rule, go to:
http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2003/pdf/03-31572.pdf