CMS Issues Final Ruling to Impact FQHCs and RHCs for 2024

On November 2, 2023, the Centers for Medicare and Medicaid Services (“CMS”) issued a final ruling, CMS-1784-F, Revisions to Payment Policies under the Medicare Physician Fee Schedule, Quality Payment Program and Other Revisions to Part B for CY 2024, that will have significant impacts on Federally Qualified Health Centers (“FQHCs”) and Rural Health Centers (“RHCs”). These include the extension of telehealth services, new services eligible to be billed under non-PPS reimbursements, adjustments to billing procedures for certain services, and prospective rate changes.

Under CMS-1784-F, CMS will be formalizing the extension of certain flexibilities related to telehealth services under the Consolidated Appropriations Act (“CAA”) through December 31, 2024. As such, the in-person visit requirements under Medicare for mental health visits provided by FQHCs and RHCs for payment will be delayed.

Under the new regulations, there will be a significant expansion of services eligible to be billed by FQHCs and RHCs to CMS. First and foremost, CMS-1784-F will expand HCPCS code G0511 to include remote physiologic monitoring and remote therapeutic monitoring for FQHCs and RHCs for dates of service on or after January 1, 2024. HCPCS code G0511 was further expanded to benefit patients and for FQHCs and RHCs to include community health integration and principal illness navigation within this code. The addition of these services will provide patients with ongoing active care while providing FQHCs and RHCs a consistent source of revenue.

CMS-1784-F incorporates an expansion of services in the mental health space. The first area covered by these provisions is the expansion of eligible services to cover marriage and family therapist and mental health counselor services for FQHCs and RHCs. The second area is the treatment of addiction. Medicare coverage and payment will be extended for patients to cover intensive outpatient programs. For FQHCs and RHCs, addiction, drug, or alcohol counselors who meet all of the requirements of MHCs to enroll with Medicare as MHCs to provide addiction services.

In addition to finalizing payment rates for hospital outpatient and ambulatory surgical center services, final rule CMS-1786-FC includes policies that align with several key goals of the Biden-Harris Administration, including promoting health equity, expanding access to behavioral health care, improving transparency in the health system, and promoting safe, effective, and patient-centered care. The final rule, which intends on closing the gap of coverage between patients who require more intense services than traditional outpatient therapy but less than inpatient-level care that a partial hospitalization or hospitalization would provide, includes Intensive Outpatient Program (“IOP”) services and allows for these services to be furnished in hospital outpatient departments as well as Community Mental Health Centers (CMHCs), FQHCs, and RHCs.

The final rule conforms regulatory text changes to applicable RHC and FQHC regulations related to the scope of IOP benefits and services, certification and plan of care requirements, and special payment rules for IOP services resulting from CAA, 2023. The scope of IOP benefits and certification and plan of care requirements will be the same for RHCs and FQHCs as those offered for hospitals. RHCs will be paid the 3-services per day payment amount for hospital outpatient departments while the payment rate for FQHCs will be the lesser of a FQHC’s actual charges or the 3-services per day payment amount for hospital outpatient departments.

CMS-1784-F finalizes a change in the frequency of billing allowable for HCPCS code G0511. Starting January 1, 2024, FQHCs will be able to bill for general care management multiple times per month for the same patient if the minimum requirements are met for each service. Of particular importance to FQHCs is that providers will be eligible to bill for the newly expanded remote monitoring services twice a month.

CM-1784-F adjusts the required supervision level to general supervision in lieu of the previous direct supervision.

For chronic care management and virtual communications services, obtained beneficiary consent will continue to be required. The guidance will adjust the mode of obtaining the consent of various options and will not require direct supervision.

Under the FQHC and RHC Prospective Payment System (“PPS”), Medicare pays FQHCs based on the lesser of their actual charges or the PPS rate of all FQHC services furnished to a beneficiary on the same day when a medically necessary face-to-face FQHC visit is given to a Medicare beneficiary. Section 1834(o)(2)(B)(ii) of the Act requires that the payment for the first year after the implementation year be increased by the percentage increase in the Medicare Economic Index (MEI). In subsequent years, the FQHC PPS base payment rate will be increased by the percentage increase in a market basket of FQHC goods and services, or if such an index is not available, by the percentage increase in the MEI. Beginning in 2017, the FQHC PPS rate is updated annually by the FQHC market basket. From January 1, 2023, through December 31, 2023, the FQHC PPS base payment rate is $187.19. On November 2, 2023, the Centers for Medicare and Medicaid Services (CMS) issued the final rule for the prospective payment system for calendar year 2024 for Federal Qualified Health Centers. On November 16, 2023, CMS released the base payment rate of $195.99, representing a 4.7% increase from the 2023 rate of $187.19.

As noted above, patient benefits covered under the Medicare program for FQHCs and RHCs, which are reimbursed outside the prospective payment system, continue to expand. CMS-1784-F adjusts the FQHC HCPCS codes for services provided beginning January 1, 2024, based on changes in the underlying average of the Medicare physician fee schedule amount for a bundled amount of various codes. As noted in the table below, the rates decreased year over year to offset the expansion of eligible services and changes to the frequency of allowable billings.

Authors: James Trubenbach-Byrne | [email protected] and Erik Halluska, CPA, Partner | [email protected]