RHC Grandfathering Fix Signed into Law

Nathan Baugh

As expected, on April 14th, President Biden signed H.R. 1868 into law, fixing many of the issues with the RHC payment modernization law enacted in December. The legislation also retroactively extends the suspension of the 2% across-the-board Medicare sequestration through the end of 2021. Since April 1, CMS had been holding claims pending passage of this legislation, we expect CMS to lift this hold imminently.
The legislation makes the following changes to the RHC program:

  1. Corrects a drafting error on the effective date of the grandfathering from 12/31/2019 to 12/31/2020. Meaning that all uncapped provider-based RHCs enrolled in Medicare by the end of 2020 will be grandfathered into the new payment structure.
  2. Allows clinics owned by hospitals with fewer than 50 beds that submitted (and Medicare received) an 855A or PECS application for enrollment in Medicare as an RHC prior to the end of 2020 to be grandfathered into the new payment structure. These clinics will have their clinic-specific cap set on their 2021 cost per visit.
  3. Requires that grandfathered RHCs must be owned by under 50-bed hospitals to retain their grandfathered status. If the parent hospital exceeds 50-beds then the RHC would lose grandfathered status and be subjected to the main statutory cap.
NARHC continues to work with Congress on legislation that will create a mechanism for “mid-build” RHCs, that were in the process of establish or constructing their clinic by the end of 2020 but had not yet submitted their 855A/PECOS application to also be grandfathered into the new payment structure.