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2022 Medicare Physician Fee Schedule Final Rule Impact on Rural Health Clinics

In November 2021, the CMS issued the 2022 Medicare Physician Fee Schedule final rule, finalizing significant policies impacting how Rural Health Clinics (RHCs) operate and are reimbursed for services provided.
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On November 2, 2021, the CMS issued the 2022 Medicare Physician Fee Schedule final rule. The rule finalized a number of significant policies impacting how Rural Health Clinics (RHCs) operate and how they are ultimately reimbursed for services provided.

RHC Mental Health Services Provided Via Telehealth

As of January 1, 2022, RHCs are reimbursed for mental health visits at their All-Inclusive Rate (AIR) for face-to-face mental health services, including audio-only interactions in the event beneficiaries are not able to, or do not consent to, the use of two-way audio/visual interaction. When billing for mental health services using audio/visual technology, the RHC must append modifier 95. For those services that are delivered using only audio services, the RHC must append a new service level modifier that CMS will establish to track the use of these services.

It should be noted that an RHC provider must furnish an in-person mental health service within six months prior to the telehealth service. Also, generally speaking, an in-person mental health visit furnished by an RHC provider must occur at least every 12 months while mental health visits are provided to the patient via telehealth. This requirement may be waived if the RHC provider and patient agree that the risks and burdens outweigh the benefits of furnishing the in-person service and that reason and decision must be documented in the patient’s record.

The new reimbursement methodology also includes mental health services provided via telehealth in the RHC visit count reported on the annual RHC cost report. Previously, mental health services were only included in the RHC’s visit count if a face-to-face mental health visit was provided to the patient. On January 1, 2022, CFR 405.2463(3) updated to the following:

“… a face-to-face encounter or an encounter furnished using interactive, real-time, audio and video telecommunications technology or audio-only interactions in cases where the patient is not capable of, or does not consent to, the use of video technology for the purposes of diagnosis, evaluation or treatment of a mental health disorder between an RHC or FQHC patient and one of the following:

  1. Clinical psychologist
  2. Clinical social worker
  3. Other RHC or FQHC practitioner, in accordance with paragraph (b)(1) of this section, for mental health services”

Payment for Services Rendered by RHC Providers to Hospice Patients

Historically, services provided by RHC providers to hospice patients had to be carved out of the annual RHC cost report and billed under the Medicare Part B fee schedule. The 2022 Physician Fee Schedule final rule, however, changed this policy. Physicians, nurse practitioners, or physician assistants who are either employed by or contracted with an RHC may provide hospice attending physician services and be reimbursed under the RHC’s AIR. These services also may be included in the RHC visit counts for the annual cost report.

Billing for Chronic Care Management (CCM) & Transitional Care Management (TCM) Services

RHCs have historically not been allowed to bill for TCM services if a patient had already been billed for CCM services by another provider during the same time period. The final rule, however, establishes that since January 1, 2022, RHCs are permitted to bill for TCM and other care management services provided to patients, even if another provider had billed for CCM within the same service period. The billing requirements for each submitted code must be met for payment to be made to the RHC.

Clarification of RHC Grandfathering

The 2021 Consolidated Appropriations Act (CAA) drastically changed the methodology by which RHCs were reimbursed and established new upper payment limit caps regardless of whether an RHC was provider-based or freestanding. However, RHCs that, as of December 31, 2020, received uncapped reimbursement were considered “grandfathered” and their upper payment limits were set at their 2020 cost report rates. The CAA did not specify whether these grandfathered RHCs would lose their existing upper payment limit rates or whether they would be subject to the new caps established by the CAA. The final rule clarifies that for RHCs that undergo a change of ownership (CHOW) or a change of address, the grandfathered status of the RHC will be transferred to the new entity or address as long as the Medicare provider number is transferred and the location requirements for RHCs are met in the new location.

The final rule also permits RHCs established after January 1, 2021 to file a consolidated cost report with other RHCs since they will have the same upper payment limit. Grandfathered RHCs and non-grandfathered RHCs are not permitted to file consolidated cost reports due to the potential variances in the upper payment limits.

Healthcare organizations that either currently operate as RHCs or are considering RHC designation by CMS should carefully consider the reimbursement effects of these changes. Organizations should also consult with their cost report preparers to prepare an estimate of the impact on operations, billing, or regulatory reimbursement for current or future RHCs.

If you have any questions about the effects of the 2022 Medicare Physician Fee Schedule final rule’s impact on RHCs or would like help assessing the potential impacts, please reach out to your professional at Forvis Mazars.

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