[Federal Register Volume 79, Number 85 (Friday, May 2, 2014)]
[Rules and Regulations]
[Pages 25436-25482]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-09908]
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Vol. 79
Friday,
No. 85
May 2, 2014
Part V
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 405, 410, et al.
Medicare Program; Prospective Payment System for Federally Qualified
Health Centers; Changes to Contracting Policies for Rural Health
Clinics; and Changes to Clinical Laboratory Improvement Amendments of
1988 Enforcement Actions for Proficiency Testing Referral; Final Rule
Federal Register / Vol. 79 , No. 85 / Friday, May 2, 2014 / Rules and
Regulations
[[Page 25436]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 410, 491, and 493
[CMS-1443-FC]
RIN 0938-AR62
Medicare Program; Prospective Payment System for Federally
Qualified Health Centers; Changes to Contracting Policies for Rural
Health Clinics; and Changes to Clinical Laboratory Improvement
Amendments of 1988 Enforcement Actions for Proficiency Testing Referral
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period.
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SUMMARY: This final rule with comment period implements methodology and
payment rates for a prospective payment system (PPS) for federally
qualified health center (FQHC) services under Medicare Part B beginning
on October 1, 2014, in compliance with the statutory requirement of the
Affordable Care Act. In addition, it establishes a policy which allows
rural health clinics (RHCs) to contract with nonphysician practitioners
when statutory requirements for employment of nurse practitioners and
physician assistants are met, and makes other technical and conforming
changes to the RHC and FQHC regulations. Finally, this final rule with
comment period implements changes to the Clinical Laboratory
Improvement Amendments (CLIA) regulations regarding enforcement actions
for proficiency testing (PT) referrals.
DATES: Effective Dates: The provisions of this final rule with comment
period are effective on October 1, 2014, except for amendments to Sec.
405.2468(b)(1), Sec. 491.8(a)(3), Sec. 493.1, Sec. 493.2, Sec.
493.1800, and Sec. 493.1840 which are effective July 1, 2014.
Comment Period: We will consider comments on the subjects indicated
in sections II.B.1., E.2. and E.4. of this final rule with comment
period received at one of the addresses provided below, no later than 5
p.m. on July 1, 2014.
ADDRESSES: In commenting, please refer to file code CMS-1443-FC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1443-FC, P.O. Box 8013,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1443-FC, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. Alternatively, you may deliver (by hand or
courier) your written comments ONLY to the following addresses prior to
the close of the comment period:
a. For delivery in Washington, DC--
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Room 445-G, Hubert H. Humphrey Building, 200
Independence Avenue SW., Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey Building is
not readily available to persons without federal government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address, call
telephone number (410) 786-7195 in advance to schedule your arrival
with one of our staff members.
Comments erroneously mailed to the addresses indicated as
appropriate for hand or courier delivery may be delayed and received
after the comment period. For information on viewing public comments,
see the beginning of the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Corinne Axelrod, (410) 786-5620 for FQHCs and RHCs.
Melissa Singer, (410) 786-0365 for CLIA Enforcement Actions for
Proficiency Testing Referral.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
SUPPLEMENTARY INFORMATION:
Acronyms
ACS American Community Survey
AI/AN American Indian/Alaskan Native
AIR All-Inclusive Rate
APCP Advanced Primary Care Practice
BLS Bureau of Labor Statistics
CCM Chronic Care Management
CCN CMS Certification Number
CCR Cost-To-Charge Ratio
CFR Code of Federal Regulations
CLIA Clinical Laboratory Improvement Amendments of 1988
CMP Civil Monetary Penalty
CMS Centers for Medicare & Medicaid Services
CNM Certified Nurse Midwife
CP Clinical Psychologist
CR Change Request
CSW Clinical Social Worker
CY Calendar Year
DSMT Diabetes Self-Management Training
EHR Electronic Health Record
E/M Evaluation and Management
FQHC Federally Qualified Health Center
FSHCAA Federally Supported Health Centers Assistance Act
FTCA Federal Tort Claims Act
GAF Geographic Adjustment Factor
GAO Government Accountability Office
GPCI Geographic Practice Cost Index
HCPCS Healthcare Common Procedure Coding System
HCRIS Healthcare Cost Report Information System
HBV Hepatitis B Vaccines
HRSA Health Resources and Services Administration
IDR Integrated Data Repository
IPPE Initial Preventive Physical Exam
MA Medicare Advantage
MAC Medicare Administrative Contractor
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MCO Managed Care Organization
MEI Medicare Economic Index
MIPPA Medicare Improvements for Patients and Providers Act
MNT Medical Nutrition Therapy
MSA Metropolitan Statistical Area
NP Nurse Practitioner
OBRA Omnibus Budget Reconciliation Act
PA Physician Assistant
PHS Public Health Service
PFS Physician Fee Schedule
PPS Prospective Payment System
PT Proficiency testing
RIA Regulatory Impact Analysis
RHC Rural Health Clinic
SNF Skilled Nursing Facility
UDS Uniform Data System
UPL Upper Payment Limit
Table of Contents
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
2. Summary of Major Provisions
a. FQHC PPS
b. Other FQHC and RHC Provisions
c. CLIA Enforcement Actions for Proficiency Testing Referral
Provisions
3. Summary of Cost and Benefits
a. For the FQHC PPS
b. For Other FQHC and RHC Changes
c. For the CLIA Enforcement Actions for Proficiency Testing
Referral
B. Overview and Background
1. FQHC Description and General Information
2. Medicare's FQHC Coverage and Payment Benefit
3. Legislation Pertaining to Medicare and Medicaid Payments for
FQHC Services
4. Medicare's Current Reasonable Cost-Based Reimbursement
Methodology
5. Summary of Requirements under the Affordable Care Act for the
FQHC PPS and Other Provisions Pertaining to FQHCs
6. Approach to the FQHC PPS
II. Establishment of the Federally Qualified Health Center
Prospective Payment System (FQHC PPS)
A. Design and Data Sources for the FQHC PPS
1. Overview of the PPS Design
2. Medicare FQHC Cost Reports
3. Medicare FQHC Claims
4. Linking Cost Reports and Claims To Compute the Average Cost
per Visit
B. Policy Considerations for Developing the FQHC PPS Rates and
Adjustments
1. Multiple Visits on the Same Day
2. Preventive Laboratory Services and Technical Components of
Other Preventive Services
3. Vaccine Costs
C. Risk Adjustments
1. Alternative Calculations for Average Cost per Visit
2. FQHC Geographic Adjustment Factor
3. New Patient or Initial Medicare Visit
4. Other Adjustment Factors Considered
5. Report on PPS Design and Models
D. Base Rate Calculation
E. Implementation
1. Transition Period and Annual Adjustment
2. Medicare Claims Payment
3. Beneficiary Coinsurance
4. Waiving Coinsurance for Preventive Services
5. Cost Reporting
6. Medicare Advantage Organizations
III. Additional Proposed Changes Regarding FQHCs and RHCs
A Rural Health Clinic Contracting
B. Technical and Conforming Changes
1. Proposed Technical and Conforming Changes
2. Additional Technical and Conforming Changes
C. Comments Outside of the Scope of the Proposed Rule
IV. Clinical Laboratory Improvement Amendments of 1988 (CLIA)--
Enforcement Actions for Proficiency Testing Referral
A. Background
B. Proposed and Final Regulatory Changes
V. Other Required Information
A. Requests for Data from the Public
B. Collection of Information Requirements
VI. Waiver of Proposed Rulemaking
VII. Response to Comments
VIII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Limitations of Our Analysis
D. Anticipated Effects of the FQHC PPS
1. Effects on FQHCs
2. Effects on RHCs
3. Effects on Other Providers and Suppliers
4. Effects on Medicare and Medicaid Programs
5. Effects on Medicare Beneficiaries
E. Effects of Other Policy Changes
1. Effects of Policy Changes for FQHCs and RHCs
a. Effects of RHC Contracting Changes
b. Effects of the FQHC and RHC Conforming Changes
2. Effects of CLIA Changes for Enforcement Actions for
Proficiency Testing Referral
F. Alternatives Considered
G. Accounting Statement and Table
H. Conclusion
Regulations Text
ADDENDUM--FQHC PPS Geographic Adjustment Factors (FQHC GAFs)
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
Section 10501(i)(3)(A) of the Affordable Care Act (Pub. L. 111-148
and Pub. L. 111-152) added section 1834(o) of the Social Security Act
(the Act) to establish a new system of payment for the costs of
federally qualified health center (FQHC) services under Medicare Part B
(Supplemental Medical Insurance) based on prospectively set rates.
According to section 1834(o)(2)(A) of the Act, the FQHC prospective
payment system (PPS) is to be effective beginning on October 1, 2014.
The primary purpose of this final rule with comment period is to
implement a methodology and payment rates for the new FQHC PPS.
This rule also implements our proposal to allow RHCs to contract
with non-physician practitioners, consistent with statutory
requirements in section 1861(aa) of the Act that require at least one
nurse practitioner (NP) or physician assistant (PA) be employed by the
RHC, and makes other technical and conforming changes to the RHC and
FQHC regulations.
The ``Taking Essential Steps for Testing Act of 2012'' (TEST Act)
(Pub. L. 112-202) was enacted on December 4, 2012. The TEST Act amended
section 353 of the Public Health Service Act (PHS Act) to provide the
Secretary with discretion as to which sanctions may be applied to cases
of intentional violation of the prohibition on proficiency testing (PT)
referrals. This final rule with comment period adopts changes to the
CLIA regulations to implement the TEST Act.
2. Summary of the Major Provisions
a. FQHC PPS
In accordance with the provisions of the Affordable Care Act, we
proposed in the September 23, 2013 Federal Register (78 FR 58386) to
establish a national, encounter-based prospective payment rate for all
FQHCs, to be determined based on an average of reasonable costs of
FQHCs in the aggregate, and pay FQHCs the lesser of their actual
charges for services or a single encounter-based rate for professional
services furnished per beneficiary per day. As required by section
1834(o)(1)(A) of the Act, we proposed to establish payment codes based
on an appropriate description of FQHC services, and taking into account
the type, intensity, and duration of services provided by FQHCs. We
also proposed adjustments to the encounter-based payment rate for
geographic differences in the cost of inputs by applying an adaptation
of the geographic practice cost indices (GPCIs) used to adjust payments
under the Physician Fee Schedule (PFS). These provisions are being
finalized as proposed. We also proposed adjustments when a FQHC
furnishes care to a patient who is new to the FQHC or to a beneficiary
receiving a comprehensive initial Medicare visit (that is, an initial
preventive physical examination (IPPE) or an initial annual wellness
visit (AWV)). These provisions have been revised based on comments
received and are being finalized to allow the proposed adjustments as
well as an adjustment for subsequent AWVs.
We also proposed not to include adjustments or exceptions to the
single, encounter-based payment when an illness or injury occurs
subsequent to
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the initial visit, or when mental health, diabetes self-management
training/medical nutrition therapy (DSMT/MNT), or the IPPE are
furnished on the same day as the medical visit. These provisions have
been revised based on the comments received and are being finalized to
allow an exception to the single, encounter-based payment when an
illness or injury occurs subsequent to the initial visit, or when a
mental health visit is furnished on the same day as the medical visit.
We also proposed that coinsurance would be 20 percent of the lesser
of the actual charge or the PPS rate. Most preventive services are
exempt from beneficiary coinsurance in accordance with section 4104 of
the Affordable Care Act. Accordingly, for FQHC claims that include a
mix of preventive and non-preventive services, we proposed to use
physician office payments under the Medicare PFS to determine the
proportional amount of coinsurance that should be waived for payments
based on the PPS encounter rate, and to use provider-reported charges
to determine the amount of coinsurance that should be waived for
payments based on the provider's charge. This provision has been
revised based on comments received and is being finalized to allow a
simpler method for calculating coinsurance when there is a mix of
preventive and non-preventive services.
The statute requires implementation of the FQHC PPS for FQHCs with
cost reporting periods beginning on or after October 1, 2014. We
proposed that FQHCs would transition into the PPS based on their cost
reporting periods and that the claims processing system would maintain
the current system and the PPS until all FQHCs transitioned to the PPS.
We also proposed to transition the PPS to a calendar year update for
all FQHCs, beginning January 1, 2016, to be consistent with many of the
PFS rates that are updated on a calendar year basis. We are finalizing
these provisions as proposed.
b. Other FQHC and RHC Changes
In addition to our proposals to codify the statutory requirements
for the FQHC PPS, we proposed to allow RHCs to contract with non-
physician practitioners, consistent with statutory requirements that
require at least one NP or PA be employed by the RHC. We also proposed
edits to correct terminology, clarify policy, and make other conforming
changes for existing mandates and the new PPS.
c. CLIA Enforcement Actions for Proficiency Testing Referral
The ``Taking Essential Steps for Testing Act of 2012'' (Pub. L.
112-202) amended section 353 of the Public Health Service Act to
provide the Secretary with discretion as to which sanctions may be
applied to cases of intentional PT referral in lieu of the automatic
revocation of the CLIA certificate and the subsequent ban preventing
the owner and operator from owning or operating a CLIA-certified
laboratory for 2 years. Based on this discretion, we are amending the
CLIA regulations to add three categories of sanctions for PT referral
based on the severity and extent of the violation.
3. Summary of Cost and Benefits
a. For the FQHC PPS
As required by section 1834(o)(2)(B)(i) of the Act, initial payment
rates (Medicare and coinsurance) under the FQHC PPS must equal 100
percent of the estimated amount of reasonable costs, as determined
without the application of the current system's upper payment limits
(UPL) or productivity standards. In the proposed rule, we estimated the
overall impact, based on the estimated PPS rate, would increase total
Medicare payments to FQHCs by approximately 30 percent, with an
annualized cost to the federal government between $183 million and $186
million, based on 5 year discounted flows using 3 percent and 7 percent
factors. Based on current data, our final estimate is an overall impact
of increasing total Medicare payments to FQHCs by approximately 32
percent, based on payment at the FQHC PPS. (Note that this does not
take into account the application of ``lesser of'' provision in section
1833(a)(1)(Z) of the Act. For more information, see sections II.E.2 and
VII.D.1 of this final rule with comment period). The annualized cost to
the federal government associated with the final FQHC PPS is estimated
to be between $200 million and $204 million, based on 5 year discounted
flows using 3 percent and 7 percent factors. These estimates also
reflect the policy modifications that are noted in section I.A.2 and
discussed in more detail in sections II.B. and II.C. of this preamble.
b. For Other FQHC and RHC Changes
We estimated that there would be no costs associated with the
removal of the contracting restrictions for RHCs or for technical and
conforming regulatory changes that would be made in conjunction with
the establishment of the FQHC PPS.
c. For the CLIA Enforcement Actions for Proficiency Testing Referral
Provisions
We estimated that an average of 6 cases per year may have fit the
terms described in the proposed rule to have alternative sanctions
applied. Based on experience with laboratories that engaged in
proficiency testing referral in the past, we estimated that the average
cost experienced by laboratories for which we imposed a revocation of
the CLIA certificate as a result of a PT referral violation was
$578,000 per laboratory. We estimated that the average cost of
alternative sanctions, based on comparable violations for which
alternative sanctions have been imposed, would be $150,000 per
laboratory. Therefore, we projected that the aggregate annual savings
would be approximately $2.6 million per year ($578,000 minus $150,000
for 6 laboratories), resulting in net average savings per affected
certificate holder of $428,000 ($578,000 minus $150,000). We continue
to consider these to be reasonable estimates.
B. Overview and Background
1. FQHC Description and General Information
FQHCs are facilities that furnish services that are typically
furnished in an outpatient clinic setting. They are currently paid an
all-inclusive rate (AIR) per visit for qualified primary and preventive
health services furnished to Medicare beneficiaries.
The statutory requirements that FQHCs must meet to qualify for the
Medicare benefit are in section 1861(aa)(4) of the Act. Based on these
provisions, the following three types of organizations that are
eligible to enroll in Medicare as FQHCs:
Health Center Program grantees: Organizations receiving
grants under section 330 of the PHS Act (42 U.S.C. 254b).
Health Center Program ``look-alikes'': Organizations that
have been identified by the Health Resources and Services
Administration (HRSA) as meeting the requirements to receive a grant
under section 330 of the PHS Act, but which do not receive section 330
grant funding.
Outpatient health programs/facilities operated by a tribe
or tribal organization (under the Indian Self-Determination Act) or by
an urban Indian organization (under Title V of the Indian Health Care
Improvement Act).
FQHCs are also entities that were treated by the Secretary for
purposes of Medicare Part B as a comprehensive federally funded health
center as of
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January 1, 1990 (see section 1861(aa)(4)(C) of the Act).
Section 330 Health Centers are the most common type of FQHC.
Originally known as Neighborhood Health Centers, they have evolved over
the last 45 years to become an integral component of the Nation's
health care safety net system, with more than 1,200 health centers
operating approximately 9,000 delivery sites that serve more than 21
million people each year from medically underserved communities. They
include community health centers (section 330(e) of the PHS Act),
migrant health centers (section 330(g) of the PHS Act), health care for
the homeless (section 330(h) of the PHS Act), and public housing
primary care (section 330(i) of the PHS Act).
FQHCs may be either not-for-profit or public organizations. The
main purpose of the FQHC program is to enhance the provision of primary
care services in underserved urban, rural and tribal communities. FQHCs
that are not operated by a tribe or tribal organization are required to
be located in or treat people from a federally-designated medically
underserved area or medically underserved population and to comply with
all the requirements of section 330 of the PHS Act. Some of these
section 330 requirements include offering a sliding fee scale with
discounts adjusted on the basis of the patient's ability to pay and
being governed by a board of directors that represent the individuals
being served by the FQHC and a majority of whom receive their care at
the FQHC. According to HRSA's Uniform Data System (UDS),\1\
approximately 8 percent of FQHC patients were Medicare beneficiaries,
41 percent were Medicaid recipients, and 36 percent were uninsured in
2012. The remaining 15 percent were privately insured or had other
public insurance. Medicare and Medicaid accounted for approximately 9
percent and 47 percent of their total billing in dollars, respectively.
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\1\ The UDS collects and tracks data such as patient
demographics, services provided, staffing, clinical indicators,
utilization rates, costs, and revenues from section 330 health
centers and health center look-alikes.
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The Congress has authorized several programs to assist FQHCs in
increasing access to care for underserved and special populations. Many
FQHCs receive section 330 grant funds to offset the costs of
uncompensated care and furnish other services. All FQHCs are eligible
to participate in the 340B Drug Pricing Program which is a program that
requires drug manufacturers to provide outpatient drugs to eligible
health care organizations/covered entities at significantly reduced
prices. FQHCs that receive section 330 grant funds also are eligible to
apply for medical malpractice coverage under Federally Supported Health
Centers Assistance Act (FSHCAA) of 1992 (Pub. L. 102-501) and FSHCAA of
1995 (Pub. L. 104-73 amending section 224 of the PHS Act) and may be
eligible for federal loan guarantees for capital improvements when
funds for this purpose are appropriated. Title VIII of the American
Recovery and Reinvestment Act (Pub. L. 111-5) appropriated $2 billion
for construction, equipment, health information technology, and related
improvements to existing section 330 grantees and for the establishment
of new grantees sites. The Affordable Care Act appropriated an
additional $11 billion over a 5-year period ($1.5 billion for capital
improvements and $9.5 billion for support and expansion of the health
centers receiving grant funds under section 330). HRSA administers the
Health Center grant program and other programs that assist FQHCs in
increasing access to primary and preventive health care in underserved
communities.
2. Medicare's FQHC Coverage and Payment Benefit
The FQHC coverage and payment benefit under Medicare began on
October 1, 1991. It was authorized by section 1861(aa) of the Act
(which amended section 4161 of the Omnibus Budget Reconciliation Act
(OBRA) of 1990 (Pub. L. 101-508, enacted on November 5, 1990)) and
implemented in regulations via the June 12, 1992 final rule with
comment period (57 FR 24961) and the April 3, 1996 final rule (61 FR
14640). Regulations pertaining to FQHCs are found primarily in Part 405
and Part 491.
FQHC covered services and supplies include the following:
Physician, NP, PA, Certified Nurse-Midwife (CNM), Clinical
Psychologist (CP), and Clinical Social Worker (CSW) services.
Services and supplies furnished incident to a physician,
NP, PA, CNM, CP, or CSW services.
FQHC covered drugs that are furnished by a FQHC
practitioner.
Outpatient DSMT and MNT for beneficiaries with diabetes or
renal disease.
Statutorily-authorized preventive services.
Visiting nurse services to the homebound in an area where
CMS has determined that there is a shortage of home health agencies.
3. Legislation Pertaining to Medicare and Medicaid Payments for FQHC
Services
FQHCs currently receive cost-based reimbursement, subject to the
UPL and productivity standards that were established in 1978 and 1982
for RHCs (43 FR 8260 and 47 FR 54165, respectively) and adopted for
FQHCs in 1992 and 1996 (57 FR 24967 through 24970 and 61 FR 14650
through 14652, respectively), for services furnished to Medicare
beneficiaries, and PPS payment, based on their historical cost data,
for services furnished to Medicaid recipients (section 1902(bb) of the
Act). The UPL for Medicare FQHC services is adjusted annually based on
the Medicare Economic Index (MEI), as described in section 1842(i)(3)
of the Act. Authority to apply productivity standards is found in
section 1833(a) and 1861(v)(1)(A) of the Act. Section 151(a) of the
Medicare Improvements for Patients and Providers Act (MIPPA) of 2008
(Pub. L. 110-275, enacted on July 15, 2008) increased the UPL for FQHC
by $5, effective January 1, 2010. Section 151(b) of the MIPPA required
the Government Accountability Office (GAO) to study and report on the
effects and adequacy of the Medicare FQHC payment structure.
Based on a GAO analysis of 2007 Medicare cost report data, about 72
percent of FQHCs had average costs per visit that exceeded the UPL, and
the application of productivity standards reduced Medicare payment for
approximately 7 percent of FQHCs. In 2007, application of the limits
and adjustments currently in place reduced FQHCs' submitted costs of
services by approximately $73 million, about 14 percent (Medicare
Payments to Federal Qualified Health Centers, GAO-10-576R, July 30,
2010).
The Benefits Improvement and Protection Act of 2000 (Pub. L. 106-
554, enacted December 21, 2000) created section 1902(bb) of the Act,
which established a PPS for Medicaid reimbursement. The law also
allowed state Medicaid agencies to establish their own reimbursement
methodology for FQHCs provided that total reimbursement would not be
less than the payment under the Medicaid PPS, and that the FQHC agreed
to the alternative payment methodology. For beneficiaries enrolled in a
managed care organization (MCO), the MCO pays the FQHC an agreed upon
amount, and the state Medicaid program pays the FQHC a wrap-around
payment equal to the difference, if any, between the PPS rate and the
payment from the managed care organization.
[[Page 25440]]
The Affordable Care Act established a Medicare PPS for FQHCs.
Section 10501(i)(3)(A) of the Affordable Care Act added section 1834(o)
of the Act, requiring the Medicare FQHC PPS to be implemented for cost
reporting periods beginning on or after October 1, 2014. The new PPS
for FQHCs is required to take into account the type, intensity, and
duration of services furnished by FQHCs and may include adjustments,
including geographic adjustments, determined appropriate by the
Secretary. A detailed discussion of the statutory requirements for the
Medicare FQHC PPS is discussed in section I.B.5. of this final rule
with comment period.
4. Medicare's Current Reasonable Cost-Based Reimbursement Methodology
FQHCs are paid an AIR per visit for medically-necessary
professional services that are furnished face-to-face (one practitioner
and one patient) with a FQHC practitioner (Sec. 405.2463). Services
and supplies furnished incident to a FQHC professional service are
included in the AIR and are not billed as a separate visit. Technical
components such as x-rays, laboratory tests, and durable medical
equipment are not part of the AIR and are billed separately to Medicare
Part B.
The AIR is calculated by dividing total allowable costs by the
total number of visits. Allowable costs may include practitioner
compensation, overhead, equipment, space, supplies, personnel, and
other costs incident to the delivery of FQHC services. Cost reports are
filed in order to identify all incurred costs applicable to furnishing
covered FQHC services. Freestanding FQHCs complete Form CMS-222-92,
``Independent Rural Health Clinic and Freestanding Federally Qualified
Health Center Cost Report''. FQHCs based in a hospital complete the
Worksheet M series of Form CMS-2552-10, ``Hospital and Hospital Care
Complex Cost Report''. FQHCs based in a skilled nursing facility (SNF)
complete the Worksheet I series of Form CMS-2540-10, ``Skilled Nursing
Facility and Skilled Nursing Facility Health Care Complex Cost
Report''. FQHCs based in a home health agency complete the Worksheet RF
series of Form CMS-1728-94, ``Home Health Agency Cost Report''.
Information on these cost report forms is found in Chapters 29, 40, 41
and 32, respectively, of the Provider Reimbursement Manual, Part 2
(Publication 15-2). Per our regulations at Sec. 413.65(n), only FQHCs
that were operating as provider-based clinics prior to 1995 and either
received funds under section 330 of the PHS Act or were determined by
CMS to meet the criteria to be a look-alike clinic continue to be
eligible to be certified as provider-based FQHCs. Provider-based
designations are not made for FQHCs that do not already have this
status.
At the beginning of a FQHC's fiscal year, the Medicare
Administrative Contractor (MAC) calculates an interim AIR based on
actual costs and visits from the previous cost reporting period. For
new FQHCs, the interim AIR is estimated based on a percentage of the
per-visit limit. FQHCs receive payments throughout the year based on
their interim rate. After the conclusion of the fiscal year, the cost
report is reconciled and any necessary adjustments in payments are
made.
Allowable costs are subject to tests of reasonableness,
productivity standards, and an overall payment limit. The productivity
standards require 4,200 visits per full-time equivalent physician and
2,100 visits per full-time equivalent non-physician practitioner (NP,
PA or CNM) on an annual basis. If the FQHC has furnished fewer visits
than required by the productivity standards, the allowable costs would
be divided by the productivity standards numbers instead of the actual
number of visits.
The payment limit varies based on whether the FQHC is located in an
urban or rural area (as defined in section 1886(d)(2)(D) of the Act).
The 2014 payment limits per visit for urban and rural FQHCs are $129.02
and $111.67, respectively. FQHCs with multiple sites may elect to file
a consolidated cost report (CMS Pub. 100-04, Medicare Claims Processing
Manual, chapter 9, section 30.8), and if the FQHC has both urban and
rural sites, the MAC applies a weighted UPL based on the percentage of
urban and rural visits as the percentage of total site visits. The AIR
is equal to the FQHC's cost per visit (adjusted by the productivity
standard if appropriate) or the payment limit, whichever is less.
Medicare beneficiaries receiving services at a FQHC are not subject
to the annual Medicare deductible for FQHC-covered services (section
1833(b)(4) of the Act). Medicare beneficiaries pay a copayment based on
20 percent of the charges (section 1866(a)(2)(A)(ii) of the Act),
except for: (1) Mental health treatment services, which are subject to
the outpatient mental health treatment limitation until January 1,
2014, when beneficiary coinsurance is reduced to the same level as most
other Part B services; (2) FQHC-supplied influenza and pneumococcal and
Hepatitis B vaccines (HBV); and (3) effective January 1, 2011,
personalized prevention plan services and any Medicare covered
preventive service that is recommended with a grade of A or B by the
U.S. Preventive Services Task Force.
The administration and payment of influenza and pneumococcal
vaccines is not included in the AIR. They are paid at 100 percent of
reasonable costs through the cost report. The cost and administration
of HBV is covered under the FQHC's AIR.
5. Summary of Requirements Under the Affordable Care Act for the FQHC
PPS and Other Provisions Pertaining to FQHCs
Section 10501(i)(3)(A) of the Affordable Care Act amended section
1834 of the Act by adding a new subsection (o), ``Development and
Implementation of Prospective Payment System''. Section 1834(o)(1)(A)
of the Act requires that the system include a process for appropriately
describing the services furnished by FQHCs. Also, the system must
establish payment rates for specific payment codes based on such
descriptions of services, taking into account the type, intensity, and
duration of services furnished by FQHCs. The system may include
adjustments (such as geographic adjustments) as determined appropriate
by the Secretary of HHS.
Section 1834(o)(1)(B) of the Act specifies that, by no later than
January 1, 2011, FQHCs must begin submitting information as required by
the Secretary, including the reporting of services using Healthcare
Common Procedure Coding System (HCPCS) codes, in order to develop and
implement the PPS.
Section 1834(o)(2)(A) of the Act requires that the FQHC PPS must be
effective for cost reporting periods beginning on or after October 1,
2014. For such cost reporting periods, reasonable costs will no longer
be the basis for Medicare payment for services furnished to
beneficiaries at FQHCs.
Section 1834(o)(2)(B)(i) of the Act requires that the initial PPS
rates must be set so as to equal in the aggregate 100 percent of the
estimated amount of reasonable costs that would have occurred for the
year if the PPS had not been implemented. This 100 percent must be
calculated prior to application of copayments, per visit limits, or
productivity adjustments.
Section 1834(o)(2)(B)(ii) of the Act describes the methods for
determining payments in subsequent years. After the first year of
implementation, the PPS payment rates must be increased by the
percentage increase in the MEI. After the second year of
implementation, PPS rates shall be increased by the percentage increase
in a market basket
[[Page 25441]]
of FQHC goods and services as established through regulations, or, if
not available, the MEI that is published in the Physician Fee Schedule
(PFS) final rule.
Section 10501(i)(3)(B) of the Affordable Care Act added section
1833(a)(1)(Z) to the Act to specify that Medicare payment for FQHC
services under section 1834(o) of the Act shall be 80 percent of the
lesser of the actual charge or the PPS amount determined under section
1834(o) of the Act.
Section 10501(i)(3)(C) of the Affordable Care Act added section
1833(a)(3)(B)(i)(II) of the Act to require that FQHCs that contract
with Medicare Advantage (MA) organizations be paid at least the same
amount they would have received for the same service under the FQHC
PPS.
Section 10501(i)(2) of the Affordable Care Act amended the
definition of FQHC services as defined in section 1861(aa)(3)(A) of the
Act by replacing the specific references to services furnished under
section 1861(qq) and (vv) of the Act (DSMT and MNT services,
respectively) with preventive services as defined in section
1861(ddd)(3) of the Act, as established by section 4014(a)(3) of the
Affordable Care Act. These changes were effective for services
furnished on or after January 1, 2011. Accordingly, in the CY 2011
Medicare PFS final rule (75 FR 73417 through 73419, November 29, 2010)
we adopted conforming regulations by adding a new Sec. 405.2449, which
added the new preventive services definition to the definition of FQHC
services effective for services furnished on or after January 1, 2011
(see that rule for a detailed discussion regarding preventive services
covered under the FQHC benefit and the requirements for waiving
coinsurance for such services).
Section 1833(b)(4) of the Act stipulates that the Medicare Part B
deductible shall not apply to FQHC services. The Affordable Care Act
made no change to this provision; therefore Medicare will continue to
waive the Part B deductible for all FQHC services in the FQHC PPS,
including preventive services added by the Affordable Care Act.
6. Approach to the FQHC PPS
To enhance our understanding of the services furnished by FQHCs and
the unique role of FQHCs in providing services to people from medically
underserved areas and populations, we worked closely with HRSA and
others in the development of the proposed rule. We are aware of the
challenges facing FQHCs in increasing access to health care for
underserved populations and the importance of Medicare payments to the
overall financial viability of FQHCs. Our goal for the FQHC PPS is to
implement a system in accordance with the statute whereby FQHCs are
fairly paid for the services they furnish to Medicare patients in the
least burdensome manner possible, so that they may continue to furnish
primary and preventive health services to the communities they serve.
We have evaluated our approach based on the comments we received to
the proposed rule in the context of balancing payment requirements,
regulatory burden, and the need for appropriate accountability and
oversight. We received approximately 100 timely comments on the
proposed FQHC PPS. The following sections describe the comments we
received, our response to the comments, and the final decisions on our
proposals.
II. Establishment of the Federally Qualified Health Center Prospective
Payment System (FQHC PPS)
A. Design and Data Sources for the FQHC PPS
1. Overview of the PPS Design
In developing the new PPS for FQHCs, we considered the statutory
requirements at section 1834(o)(1)(A) of the Act requiring that the new
PPS take into account the type, intensity, and duration of services
furnished by FQHCs, and allows for adjustments, including geographic
adjustments, as determined appropriate by the Secretary. The statute
also requires us to ``establish payment rates for specific payment
codes based on . . . appropriate description of services.'' We explored
several approaches to the methodology and modeled options for
calculating payment rates and adjustments under a PPS based on data
from Medicare FQHC cost reports and Medicare FQHC claims. Each option
was evaluated to determine which approach would result in the most
appropriate payment structure with the fewest reporting requirements
and least administrative burden for the FQHCs.
One approach we considered would align payment for FQHCs with
payment for services typically furnished in physician offices, making
separate payment for each coded service and adopting the relative
values from the PFS. While this approach follows established payment
policy for services furnished in an outpatient clinic setting, it
unbundles a FQHC encounter-based payment into a fee schedule structure,
which we believe could encourage excess utilization in the long-term,
and could increase coding and billing requirements for FQHCs.
Another approach for the PPS would be to pay a single encounter-
based rate per beneficiary per day. The encounter-based rate would be
based on an average cost per visit, which would be calculated by
aggregating the data for all FQHCs and dividing their total costs by
their total visits incurred during a specified time period. An
encounter-based payment rate is consistent with the agency's commitment
to greater bundling of services, which gives FQHCs the flexibility to
implement efficiencies to reduce over-utilization of services. FQHCs
are accustomed to billing for a single visit, as they are currently
paid through an AIR that is based on a FQHC's own average cost per
visit. An encounter-based payment is also similar to Medicaid payment
systems, and Medicaid constitutes a large portion of FQHC billing
(approximately 47 percent, compared to approximately 9 percent for
Medicare). We believe an encounter-based payment rate (with a few
adjustments as discussed in section II.C. of this final rule with
comment period), for the FQHC PPS would provide appropriate payment
while remaining administratively simple.
Also, our analysis of Medicare claims data supported an encounter-
based payment rate. As discussed in section II.A.3 of this final rule
with comment period, our analysis determined that FQHC Medicare claims
listed a single HCPCS code that defined the overall type of encounter
(for example, a mid-level office visit (HCPCS code 99213)). The vast
majority of FQHC encounters were defined as evaluation and management
(E/M) office visits (HCPCS codes 99201 through 99215). Other codes were
used more sporadically, and we believe that the administrative burden
associated with developing and maintaining a payment system composed of
multiple rates (for example, a fee schedule) far outweighs the minor
variations in reimbursement. Therefore, we developed an encounter-based
rate, with a few adjustments, as the basis for payment under the FQHC
PPS. We believe the description of FQHC services that we proposed in
the proposed rule, and the development of payment codes that are based
on the costs of groups of FQHC services (as discussed in section
II.E.2. of this final rule with comment period), meets the requirement
of the statute.
Comment: A large number of commenters were strongly supportive of a
single, bundled encounter-based PPS rate, and many noted that this
approach encourages comprehensive and
[[Page 25442]]
integrated care. Some of the commenters who supported a bundled
encounter-based rate also recommended that CMS develop multiple rates
to reflect additional payment adjustments.
Response: We agree with the commenters that a bundled encounter-
based rate would provide appropriate payment while remaining
administratively simple. We will address the recommendations for
additional payment adjustments in section II.C.4. of this final rule
with comment period.
After consideration of the public comments received, we are
finalizing our proposal to pay FQHCs using an encounter-based rate.
2. Medicare FQHC Cost Reports
As required by section 1834(o)(2)(B)(i) of the Act, initial payment
rates (Medicare and coinsurance) under the FQHC PPS must equal 100
percent of the estimated amount of reasonable costs, as determined
without the application of the current system's UPLs or productivity
standards that can reduce a FQHC's per visit rate. In order to estimate
100 percent of reasonable costs for the proposed rule, we obtained
Medicare cost report data for free-standing FQHCs (Form CMS 222-92)
from the March 31, 2013, Healthcare Cost Report Information System
(HCRIS) quarterly update, and we identified cost reports with cost
reporting periods that ended between June 30, 2011, and June 30, 2012.
We stated in the proposed rule that we would use the most recent
available data for the final rule. Therefore, in estimating 100 percent
of reasonable costs for this final rule with comment period, we used
cost report data from December 31, 2013, HCRIS quarterly update, and we
supplemented this with data from the three prior HCRIS quarterly
updates (that is, September 30, 2013, June 30, 2013, and March 31,
2013). We also obtained HCRIS data for hospital-based FQHCs (Form 2552-
10) and HHA-based FQHCs (Form 1728-94), which added data from provider-
based FQHCs. In the expanded sample that we used for this final rule
with comment period, we identified cost reports with cost reporting
periods ending between June 30, 2011, and June 30, 2013. We included in
our analysis FQHC costs reports that had allowable costs (excluding
pneumococcal and influenza vaccines) and Medicare visits, and we used
one cost report for each FQHC cost reporting entity. (A cost reporting
entity is a FQHC delivery site that files either an individual or a
consolidated cost report.) For 63 percent of cost reporting entities,
there were either multiple cost reports available or the cost reporting
period was not exactly 1 year. For the remaining 37 percent of cost
reporting entities, the only available cost report covered 1 full year.
Compared to the characteristics of the cost report data used for the
proposed rule, the significant increase in the percentage of FQHCs with
multiple cost reports is due mostly to the expanded time period that we
used for the final rule to identify cost reports available for
analysis. For cost reporting entities with multiple cost reports
available, we selected the most recent cost report, unless an earlier
cost report provided us with a better match to the FQHC claims data
that was used to model potential adjustments. Because FQHCs with
multiple sites can file consolidated cost reports, we also ensured that
we selected only one cost report for each delivery site.
As required by statute, we estimated 100 percent of reasonable
costs that would have occurred for this period prior to the application
of copayments, per visit limits, or productivity adjustments. We also
note that, under section 1833(c) of the Act, effective January 1, 2014,
outpatient mental health services are paid on the same basis as other
Part B services. As the FQHC PPS is to be implemented for cost
reporting periods beginning on or after October 1, 2014, we adjusted
the cost report data to remove the application of the outpatient mental
health limitations that were in effect when these reported services
were incurred.
For this final rule with comment period, we used the methodology
described in the proposed rule to estimate 100 percent of reasonable
costs. After eliminating the current payment limits, outpatient mental
health limitations, and productivity and adjustments, we calculated the
average cost per visit for each cost reporting entity by dividing the
total estimated Medicare costs (excluding vaccines) reported by the
total number of Medicare visits reported.
In developing the FQHC PPS, section 1834(o)(1)(A) of the Act allows
for adjustments determined appropriate by the Secretary. Consistent
with this authority, we excluded statistical outliers from the sample
of cost reports used for the proposed rule. We identified all cost
reporting entities with an average cost per visit that was greater than
three standard deviations above or below the geometric mean of the
overall average cost per visit among cost reporting entities, and we
excluded their data from our sample. We believe that removing
statistical outliers is consistent with standard practice and results
in a more accurate estimation of costs overall. In this final rule with
comment period, we used the same approach to exclude statistical
outliers from the cost report sample.
Comment: Several commenters objected to the exclusion of outlier
cost reports and claims in calculating the base rate. Some of these
commenters opined that the authority in section 1834(o)(1)(A) of the
Act, to ``include adjustments . . . determined appropriate by the
Secretary'' cannot override the requirement in section 1834(o)(2)(B) of
the Act that the aggregate amount of initial PPS rates equal ``100
percent of the estimated amount of reasonable costs (determined without
the application of a per visit payment limit or productivity screen).''
Commenters suggested that the exclusion of outliers results in a lower
base rate and would not represent all appropriate costs, such as higher
costs of visits furnished to complex Medicare patients, or for
furnishing costly, but necessary items, such as expensive drugs and
biologicals, whose costs may be beyond a FQHC's control. Some of the
commenters also urged CMS to compute the base PPS rate without the
exclusion of outliers.
Response: We respectfully disagree with the assertion that the
exclusion of outliers is inconsistent with statutory authority. Under
section 1834(o)(2)(B) of the Act, we are required to set the initial
payment rates to equal ``100 percent of the estimated amount of
reasonable costs.'' The statute does not require us to set initial
payment rates based on the inclusion of every cost report or claim
submitted. We analyzed the most current available FQHC cost report and
claims data, and consistent with standard practice, trimmed the data
for outliers so that the estimates are not skewed by unusual data.
Outliers were defined based on two criteria: (1) Cost reports with an
average cost per visit value more than 3 standard deviations from the
geometric mean of all average costs per visit; and (2) encounters with
an adjusted charge value more than 3 standard deviations from the
geometric mean of all adjusted charges. This trim methodology of three
standard deviations from the geometric mean is a relatively
conservative approach, and the two trims together exclude less than 3
percent of the overall sample. We believe that removing statistical
outliers results in a more accurate estimation of costs overall.
Comment: Several commenters from tribal organizations recommended
that CMS not exclude outliers in calculating the base rate, as they
believe that they may be disproportionately impacted because their
costs are unusually high.
[[Page 25443]]
Response: Of the approximately 69 tribal FQHCs furnishing services
at approximately 114 separate sites, there were 8 tribal FQHCs whose
costs were considered statistical outliers. Although tribal FQHCs have
a higher rate of statistical outliers than non-tribal FQHCs, the number
of tribal FQHCs whose costs were more than three standard deviations
from the geometric mean is still quite low. As previously noted, the
statute does not require the rate to reflect actual costs for each
individual FQHC. The per diem rate that is established reflects the
national average cost of a FQHC visit.
Comment: A commenter noted that FQHCs count multiple visits per day
on their cost reports, and FQHCs should be given a one-time opportunity
to adjust their reported FQHC visits to a per diem to avoid an undue
reduction in the estimated cost per FQHC visit.
Response: As stated in the proposed rule, we used the adjusted
claims data to calculate an average cost per diem in order to
accurately capture all costs and did not rely solely on cost report
data. We used the same approach for this final rule with comment
period.
Comment: Some commenters were concerned that costs related to
electronic health record (EHR) implementation would not be adequately
reflected in 2012 cost report data as many FQHCs adopted EHRs in 2012.
Response: We used the most recent available data for this final
rule, and we updated our sample to include cost reports with reporting
periods ending June 30, 2013. We do not believe it is appropriate to
adjust the calculation of reasonable cost based on anticipated future
costs.
3. Medicare FQHC Claims
In developing the Medicare FQHC PPS, section 1834(o)(1)(A) of the
Act requires us to take into account the type, intensity, and duration
of FQHC services, and allows other adjustments, such as geographic
adjustments. Section 1834(o)(1)(B) of the Act also granted the
Secretary of HHS (the Secretary) the authority to require FQHCs to
submit such information as may be required in order to develop and
implement the Medicare FQHC PPS, including the reporting of services
using HCPCS codes. The provision requires that the Secretary impose
this data collection submission requirement no later than January 1,
2011. The requirement for FQHCs to submit HCPCS codes was implemented
through program instructions (CMS Change Request (CR) 7038).
Beginning with dates of service on or after January 1, 2011, FQHCs
are required to report all pertinent services furnished and list the
appropriate HCPCS code for each line item along with revenue code(s)
for each FQHC visit when billing Medicare. The additional line item(s)
and HCPCS code reporting were for informational and data gathering
purposes to inform development of the PPS rates and potential
adjustments. Other than for calculating the amount of coinsurance to
waive for preventive services for which the coinsurance is waived,
these HCPCS codes are not currently used to determine current Medicare
payment to FQHCs. We proposed to use the HCPCS codes in the FQHC claims
data to support the development of the FQHC PPS rate and adjustments
and for making payment under the PPS.
In order to model potential adjustments for the proposed rule, we
obtained final action Medicare FQHC claims (type of bill 73X and 77X)
from the CMS Integrated Data Repository (IDR) with dates of service
between January 2010 and December 2012. To model potential adjustments
for this final rule with comment period, we obtained final action
Medicare FQHC claims from the CMS IDR with dates of service between
January 2011 and December 2013. Of these claims, only those with dates
of service between January 1, 2011, and June 30 2013, were retained for
analysis and linking with Medicare cost reports, as described further
in section II.A.4. of this final rule with comment period. We excluded
claims that did not list a revenue code or HCPCS code that represented
a face-to-face encounter, as these services would not qualify for an
AIR payment. We also excluded claim lines with revenue codes that did
not correspond to FQHC services or that lacked valid HCPCS codes.
In 2011, approximately 90 percent of FQHC Medicare claims listed a
single HCPCS code that defined the overall type of encounter (for
example, a mid-level office visit (HCPCS code 99213)). We found similar
reporting trends in 2012 FQHC Medicare claims. For this final rule with
comment period, we updated our analysis of HCPCS reporting trends and
found they are relatively similar in 2013 FQHC Medicare claims. We
sought to validate the completeness of HCPCS reporting by analyzing
coding on primary care physician claims for PFS data. When compared,
the findings from the simulated PFS data and actual FQHC data were
similar in the type and distribution of the reported encounter code
(that is, the HCPCS code that represents the visit that qualifies the
FQHC encounter for an AIR payment). When ancillary services (services
that are not separately billable by a FQHC) were billed with an office
visit code, both FQHC and analogous primary care physician office
claims demonstrated a tendency to include only one to two ancillary
services in addition to the encounter code about 35 percent of the
time, and FQHCs billed only a single ancillary service about 10 percent
of the time.
We believe that the reporting trends in the FQHC claims are
consistent with the coding of analogous primary care physician office
claims, thereby suggesting that the limited number of ancillary
services listed on FQHC claims appropriately describe the services
furnished during an encounter.
Comment: Commenters supported the use of the HCPCS codes in the
FQHC claims data to support the development of the FQHC PPS rate and
adjustments and for making payment under the PPS. Some commenters
recommended that we incorporate additional payment adjustments based on
the HCPCS codes in the FQHC claims data.
Response: We agree with the commenters that it is appropriate to
use the HCPCS codes in the FQHC claims data to support the development
of the FQHC PPS rate and adjustments and for making payment under the
PFS. We will address the recommendations for additional payment
adjustments in section II.C.4. of this final rule with comment period.
Comment: Some commenters were concerned that services that were
more recently recognized as payable to FQHCs would not be reflected in
the claims sample as it did not include claims with dates of service
beyond June 30, 2012.
Response: We used the most recent available data for this final
rule with comment period. We updated our sample to include claims with
dates of service through June 30, 2013, to the extent that an
associated cost report was included in our cost report sample (as
discussed previously and in section II.A.2. of this final rule with
comment period).
Comment: A commenter was concerned that a FQHC market basket of
goods and services would not reflect the variety of non-billable
ancillary services furnished during a FQHC visit.
Response: Market baskets developed for other Medicare payment
systems typically utilize cost report data, and the costs of covered
services provided incident to a billable visit may be included on the
FQHC cost report.
[[Page 25444]]
Comment: Some commenters opined that the implementation of HCPCS
reporting for FQHCs was confusing, resulting in claims with significant
errors in line item reporting, and questioned the credibility of
analyses based on claims submitted in 2011 and 2012.
Response: Since data used for the proposed rule included final
action claims with dates of service through June 2012 that were
obtained from the IDR in 2013, we believe that any initial errors in
the coding or adjustment of claims were corrected or were not present
in the majority of the claims used for modeling adjustments in the
proposed rule. (see CMS CRs 7038 and 7208, which updated CMS Pub 100-
04, Claims Processing Manual, Chapter 9). For this final rule with
comment period, we updated our sample to include final action claims
with dates of services through June 2013, which are even less likely to
have significant coding or adjustment errors.
After consideration of the public comments received, we are
finalizing our proposal to use the HCPCS codes in the FQHC claims data
to support the development of the FQHC PPS rate and adjustments and for
making payment under the PFS.
4. Linking Cost Reports and Claims To Compute the Average Cost per
Visit
In this final rule with comment period we used the same methodology
described in the proposed rule in order to compute the adjusted charges
or ``estimated cost'' for determining the average cost per visit. We
linked claims to cost reports by delivery site, as determined by the
CMS Certification Number (CCN) reported on the claim. Since the HCPCS
code reporting requirement on claims did not go into effect until
January 1, 2011, claims for earlier dates of service did not include
the detail required to model adjustments based on type, intensity, or
duration of services. In the sample used for the proposed rule, cost
reports with reporting periods that began on or after January 1, 2011,
accounted for 81 percent of the sample. In the updated sample used for
this final rule with comment period, cost reports with reporting
periods that began on or after January 1, 2011, accounted for 98
percent of the sample. We linked these cost reports to Medicare FQHC
claims with service dates that matched their respective cost reporting
periods. For cost reports that were at least 1 full year in length and
with a cost reporting period that began in 2010, we linked these cost
reports to 2011 Medicare FQHC claims.
The linked cost report and claims data were then used to calculate
a cost-to-charge ratio (CCR) for each cost-reporting entity. To
approximate data not available on the cost report, we developed these
CCRs to convert each FQHC's charge data, as found on its claims, to
costs. We calculated an average cost per visit by dividing the total
allowable costs (excluding pneumococcal and influenza vaccinations) by
the total number of visits reported on the cost report. We calculated
an average charge per visit by dividing the total charges of all visits
(Medicare and non-Medicare) for all sites under a cost-reporting entity
and dividing that sum by the total number of visits for that cost-
reporting entity. We calculated a cost-reporting entity-specific CCR by
dividing the average cost per visit (based on cost report data) by the
average charge per visit (based on claims data). We multiplied the
submitted charges for each claim by these cost-reporting entity-
specific CCRs to estimate FQHC costs per visit. We note that other
Medicare payment systems calculate CCRs based on total costs and total
charges reported on Medicare cost reports, and that this information is
not currently available on the free-standing FQHC cost report, Form
CMS-222-92.
In developing the FQHC PPS, section 1834(o)(1)(A) of the Act allows
for adjustments determined appropriate by the Secretary. Consistent
with this authority, we excluded statistical outliers from the linked
claims sample used for the proposed rule. We identified visits with
estimated costs that were greater than three standard deviations above
or below the geometric mean of the overall average estimated cost per
visit, and we excluded those visits from our sample. We believe that
removing statistical outliers is consistent with standard practice and
results in a more accurate estimation of costs overall. For this final
rule with comment period, we used the same approach to exclude
statistical outliers from the linked claims sample.
After trimming the linked claims data for outliers, the final data
set used for this final rule with comment period included 5,468,852
visits from 5,458,632 distinct claims encompassing 6,533,716 claim
lines. This included visits furnished to 1,297,013 beneficiaries at
3,778 delivery sites under 1,215 cost-reporting entities. For this
final rule with comment period, we modified the definition of a daily
visit to be consistent with our revised policy to allow an exception to
the per diem PPS payment for subsequent injury or illness and mental
health services furnished on the same day as a medical visit.
Separately payable encounters for the same beneficiary at the same FQHC
were combined into a single daily visit, while allowing for a separate
medical visit, mental health visit, and subsequent illness/injury
visit, which could result in up to three encounters per beneficiary per
day. The final data set yielded 5,462,670 daily visits.
Comment: A commenter suggested that using CCRs to measure the cost
of furnishing FQHC services is not appropriate for FQHCs because
certain types of FQHC care management services are not captured in the
billed charges; the CCRs would not be uniform among medical and mental
health services; and the CCRs would be affected by the pricing
strategies of FQHCs that keep their charges low to minimize the
copayment impact on uninsured and indigent patients. The commenter
recommended that CMS use PFS relative value units or other metrics to
adjust FQHC average cost per visit.
Response: We used Medicare cost report data to measure the
aggregate reasonable cost of furnishing FQHC services. However, as
discussed in the proposed rule, the cost report data is insufficient
for modeling the types of adjustments considered for the FQHC PPS. The
CCRs for each cost-reporting entity were used to approximate data not
available on the cost report and to convert each FQHC's charge data, as
found on its claims, to costs. The use of the CCRs was primarily for
modeling the adjustments and does not substantially impact our measure
of the aggregate reasonable cost of furnishing FQHC services.
Therefore, in this final rule with comment period, we plan to continue
to use the CCR to adjust charges in order to estimate costs.
Comment: A commenter requested that CMS clarify whether a
statistically significant number of outlier visits were for FQHCs in a
particular state or for a particular service.
Response: The average range of outliers based on the adjusted
charge for the encounter was approximately 1.3 percent of FQHC visits,
with higher rates in U.S. territories (4 percent) and the Pacific
census division (3 percent). Slightly more than 1 percent of all office
visits were outliers.
B. Policy Considerations for Developing the FQHC PPS Rates and
Adjustments
In developing the FQHC PPS rates and adjustments, we considered
existing payment policies regarding payment for multiple visits on the
same day, preventive laboratory services and technical components of
other preventive services, and vaccine costs to
[[Page 25445]]
determine potential interactions with the implementation of the FQHC
PPS.
1. Multiple Visits on the Same Day
The current all-inclusive payment system was designed to reimburse
FQHCs for services furnished to Medicare beneficiaries at a rate that
would take into account all costs associated with the provision of
services (for example, space, supplies, practitioners, etc.) and
reflect the aggregate costs of providing services over a period of
time. In some cases, the per visit rate for a specific service is
higher than what would be paid based on the PFS, and in some cases it
is lower than what would be paid based on the PFS, but at the end of
the reporting year when the cost report is settled, the Medicare
payment is typically higher for FQHCs than if the services were billed
separately on the PFS.
The all-inclusive payment system was also designed to minimize
reporting requirements, and as such, it reflects all the services that
a FQHC furnishes in a single day to an individual beneficiary,
regardless of the length or complexity of the visit or the number or
type of practitioners seen. This includes situations where a FQHC
patient has a medically-necessary face-to-face visit with a FQHC
practitioner, and is then seen by another FQHC practitioner, including
a specialist, for further evaluation of the same condition on the same
day, or is then seen by another FQHC practitioner (including a
specialist) for evaluation of a different condition on the same day.
Except for certain preventive services that have coinsurance
requirements waived, FQHCs have not been required to submit coding of
each service in order to determine Medicare payment.
Although the all-inclusive payment system was designed to provide
enhanced reimbursement that reflects the costs associated with a visit
in a single day by a Medicare beneficiary, an exception to the one
encounter payment per day policy was made for situations when a patient
comes into the FQHC for a medically-necessary visit, and after leaving
the FQHC, has a medical issue that was not present at the visit earlier
that day, such as an injury or unexpected onset of illness. In these
situations, the FQHC has been permitted to be paid separately for two
visits on the same day for the same beneficiary.
In the April 3, 1996 final rule (61 FR 14640), we revised the
regulations to allow separate payment for mental health services
furnished on the same day as a medical visit. The CY 2007 PFS final
rule (71 FR 69624) subsequently revised the regulations to allow FQHCs
to receive separate payment for DSMT/MNT. The ability to bill
separately for Medicare's IPPE is in manuals only and not in
regulation, with the manual language noting this is a once in a
lifetime benefit. There are no statutory requirements to pay FQHCs
separately for these services when they occur on the same day as
another billable visit.
To determine if these exceptions should be included, updated, or
revised in the new PPS, in the September 23, 2013 proposed rule (78 FR
58386) we discussed that we examined 2011 Medicare FQHC claims data in
order to determine the frequency of FQHCs billing for more than one
visit per day for a beneficiary. We then analyzed the potential
financial impact on FQHCs and the potential impact on access to care if
billing for more than 1 visit per day for these specific situations was
no longer permitted. We also considered several alternative options,
such as an adjustment of the per visit rate when multiple visits occur
in the same day, or the establishment of a separate per visit rate for
subsequent visit due to illness or injury, mental health services,
DSMT/MNT, or IPPE.
In the September 23, 2013 proposed rule (78 FR 58386) proposed
rule, we discussed that an analysis of data from Medicare FQHC claims
with dates of service between January 1, 2011 and June 30, 2012,
indicated that it is uncommon for FQHCs to bill more than one visit per
day for the same beneficiary (less than 0.5 percent of all visits),
even though the ability to do so has been in place since 1992 for
subsequent illness/injury, since 1996 for mental health services, and
since 2007 for DSMT/MNT. Even allowing for any underreporting in the
data, it is clear that billing multiple visits on the same day for an
individual is a rare event, and we stated that eliminating the ability
to do so would not significantly impact either the FQHC payment or a
beneficiary's access to care. We also suggested this policy would also
simplify billing by removing the need for modifier 59, which signifies
that the conditions being treated are totally unrelated and services
are furnished at separate times of the day, and the subsequent claims
review that occurs when modifier 59 appears on a claim.
Because the data show that multiple visits rarely occur on the same
day, we determined that the level of effort required to develop an
adjustment or a separate rate for each of these services when furnished
on the same day as a medical visit would not be justified. Therefore,
in the proposed rule, we proposed to revise Sec. 405.2463(b) to remove
the exception to the single encounter payment per day for FQHCs paid
under the proposed PPS and we stated that this policy is consistent
with an all-inclusive methodology and reasonable cost principles and
would simplify billing and payment procedures. Thus, the proposed PPS
encounter rate reflected a daily (per diem) rate and resulted in a
slightly higher payment than one calculated based on multiple
encounters on the same day.
Based on the Medicare claims data furnished by FQHCs that indicates
minimal incidence of multiple visits billed on the same day, we
concluded in the proposed rule that not including these exceptions in
the PPS would not significantly impact total payment or access to care.
However, because we understand that there may be many possible reasons
why the rate of billing for more than one visit per day has been low
(for example, difficulty in scheduling more than one type of visit on
the same day) and that FQHCs can furnish integrated, patient-centered
health care services in a variety of ways, we asked for comments to
address whether there are factors that we have not considered,
particularly in regards to the provision of mental health services, and
whether this change would impact access to these services or the
integration of services in underserved communities.
We received many comments on our proposal not to include these
exceptions in the new PPS for FQHCs. None of the commenters were
supportive of the proposal.
Comment: Some commenters said that we should continue to allow
mental health or other visits to be furnished on the same day as a
medical visit because their patients have transportation, mobility,
work, or childcare issues.
Response: We wish to clarify that we did not propose to prohibit
mental health visits from occurring on the same day as a medical visit.
We did propose not to include an exception to the per diem payment
system to allow for multiple billing when mental health (or subsequent
illness/injury, DSMT/MNT or IPPE) is furnished on the same as a medical
visit, as discussed later.
Comment: Some commenters suggested that if we do not allow separate
billing for mental health services that are furnished on the same day
as a medical service, we should instead develop an adjustment that
would increase the PPS per diem base payment rate when a mental health
visit occurs on the same day as another billable visit. Other
commenters suggested an adjustment for mental
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health, behavioral health, DSMT, and MNT.
Response: As we discussed in earlier, we did not propose to include
adjustments to the PPS per diem payment rate except for new patient and
initial Medicare visits. While we considered an adjustment for mental
health services and DSMT/MNT, our analysis of the claims data did not
support such adjustments. Also, including additional adjustments would
result in a lower PPS rate, which would impact FQHC payments for all
visits.
Comment: Some commenters acknowledged that the incidence of
Medicare billing for more than 1 visit per beneficiary per day in FQHCs
is extremely low, but argued that their FQHC often billed multiple
visits on the same day, particularly for mental health visits that
occur on the same day as a medical visit, and that this proposal would
have a significant impact on their FQHC payments and their patient's
access to care.
Response: Based on our analysis of national Medicare claims data,
we believe there would be a very minimal impact if the exception
allowing multiple billing on the same day was to be eliminated,
especially for mental health services. We analyzed the claims data of
the FQHCs that provided the most detailed comments that they would be
significantly or disproportionately impacted if they could not bill
separately for mental health visits that occur on the same day as a
medical visit. A commenter from a large FQHC in the southeastern part
of the U.S. with more than 23,000 total visits per year described how
they are a fully integrated primary care FQHC and every patient has a
team of professionals that includes behavioral health. Yet a review of
the Medicare claims data for this FQHC showed that out of a yearly
total of more than 23,000 total visits, only 74 mental health visits,
or 0.32 percent, were billed on the same day as a medical visit. A
review of Medicare claims data for a large FQHC in the western part of
the U.S. showed that 2.0 percent had a mental health visit on the same
day as another visit, but of those 2.0 percent, only 0.5 percent of
these were billable visits. A large multisite FQHC in the southern part
of the U.S. stated that as a result of their integrated model of
behavioral care and same day billing, there was a reduction in visits
to the emergency room. The claims data for this FQHC showed a rate of
same day billing for mental health visits of 0.5 percent, and no
evidence was provided to link this to a reduction in emergency room
visits. While this is slightly higher than the average of 0.3 percent,
it is still a very low rate.
We do not know why these and other FQHCs believe that they are
billing more same-day mental health visits than indicated by their
claims data. Perhaps the FQHC may be considering all their patients,
not just Medicare beneficiaries who comprise an average of 8 percent of
all FQHC patients. Another possibility is that the FQHC may be
considering some behavioral health services that are beyond the scope
of Medicare-covered services, or are including services furnished by
non-FQHC practitioners. Based on the claims data and the information
provided in the comments, we do not agree that removal of the
exceptions to allow for multiple billing would have a significant
impact on the financial viability of these FQHCs or reduce access to
care for Medicare beneficiaries.
Comment: Several commenters acknowledged that their use of the
exception for multiple billing on the same day was low or non-existent
for Medicare beneficiaries, but wanted us to retain this exception so
that they could use this to leverage Medicaid in their state to pay
separately for mental health.
Response: We do not believe that Medicare policy should be
determined in order to influence state Medicaid policies.
Comment: Some commenters disputed our data which showed that only
0.5 percent of all claims were for multiple same day visits. The
commenters suggested the following reasons for the low number of
multiple same day visits: FQHCs did not code correctly; FQHCs did not
know they could bill for multiple visits; FQHC billing systems are not
set up for multiple billing because other payment systems do not
reimburse for it; and that the MACs do not allow it.
Response: Section 1834(o)(1)(B) of the Act, as added by the
Affordable Care Act required FQHCs to utilize HCPCS codes on their
Medicare claims in order to inform the development of the FQHC PPS.
FQHCs have also been required to use HCPCS codes for payment purposes
when a preventive service for which coinsurance is waived is on the
same claim as a service that has a coinsurance requirement. Other
payment systems may also require HCPCS coding on claims. We are aware
that some FQHCs have limited experience with coding and that the coding
submitted on Medicare claims may not have been accurate or complete in
all cases. However, even if the rate shown in the claims data was
doubled or tripled, the rate of billing for multiple visits on the same
day would still be extremely low.
As we stated in the September 23, 2013 proposed rule, the ability
to bill for multiple visits on the same day for subsequent illness or
injury has been allowed since the beginning of the FQHC program. We
also noted that the ability to bill for multiple visits on the same day
for mental health services has been allowed since 1996, and the ability
to bill for multiple visits on the same day has been allowed for DSMT/
MNT since 2007. While it is possible that some FQHCs were not aware
that this option existed, we know from the claims data that mental
health, IPPE, and DSMT/MNT services constitute a small percentage of a
FQHC's total Medicare services.
We understand that billing systems vary among FQHCs and that some
billing systems are more adept at managing tasks such as multiple same-
day billing. However, we believe that if the inability to bill for
multiple visits presented a significant loss of payment for a FQHC, the
FQHC would have upgraded its system to allow for this type of billing.
We are also not aware of any MACs that do not allow for multiple same
day billing for the circumstances in which they are allowable.
Medicare comprises only 8 percent of FQHC patient population, and
not all Medicare beneficiaries require mental health or DSMT/MNT
services. Particularly for mental health services, it is often
difficult to schedule appointments on the same day as a medical visit,
and most mental health conditions require ongoing treatment which would
likely be at a frequency that differs from the need for primary care
visits. Therefore, we would expect the rate of same day billing to be
low, despite the availability of the exceptions.
Comment: Some commenters requested that FQHCs be allowed to bill
separately for other services such as optometry and dental care when
furnished on the same day as another visit.
Response: Other services, such as optometry and dental care, cannot
be billed separately on the same day as another medical visit under the
current AIR system. We did not propose and we are not considering
expanding the type of services that can be billed separately when
furnished on the same day as another visit. The PPS rate and its
adjustments reflect the total cost of furnishing services to Medicare
beneficiaries.
Comment: Some commenters were concerned that removing the ability
to bill separately for mental health services that are furnished on the
same day as a medical visit would create an incentive
[[Page 25447]]
for FQHCs to schedule these encounters on separate days.
Response: Under both the all-inclusive payment system and the PPS
per diem system, there is a risk that a FQHC could deliberately
schedule patient visits over a period of time in order to maximize
payment. We expect FQHCs and other providers of care to Medicare
beneficiaries to act in the best interests of their patients, which
includes scheduling visits in a manner that maximizes the health and
safety of their patients.
Comment: A few commenters stated that FQHCs will not be able to
continue working with community mental health centers if we do not
allow separate billing for mental health services furnished on the same
day as a medical visit.
Response: Commenters did not provide enough supporting information
as to why this proposal would negatively or adversely affect FQHC
relationships with community mental health centers to allow us to
respond meaningfully to this comment.
Comment: Some commenters suggested that removing the ability to
bill separately for mental health and other services is inconsistent
with the Affordable Care Act's focus on value over volume.
Many commenters wrote that the ability to bill separately for
mental health and other visits on the same day as a primary care visit
would help them to furnish integrated and coordinated care and would
benefit their patients. Many of them stated that allowing separate
payment for mental health services furnished on the same day as a
medical visit would provide incentives to furnish integrated care for
Medicare patients with complex health conditions. Others were concerned
that not allowing this exception would send a message that we do not
value mental health care. Commenters also suggested that people with
mental illness are less likely to return for a mental health visit if a
primary care visit is not also scheduled, and that furnishing mental
health visits on the same day as a medical visit helps to increase
compliance with medications.
Response: We agree with commenters about the importance of
promoting and furnishing coordinated and integrated care, which can be
especially challenging in underserved areas. Based on Medicare claims
data and the comments we received, there is no evidence that access to
care would be reduced if exceptions to the per diem PPS are not
allowed.
However, we agree that separate payment for mental health services
furnished on the same day as a medical visit has the potential to
increase access to mental health services in underserved areas and that
this would help to demonstrate the value of mental health services,
especially in areas where need is high and utilization is low. We
acknowledge that FQHCs furnish services to underserved and vulnerable
populations that often have had difficulty accessing mental health
services, and that commenters overwhelmingly support separate payment
for mental health services furnished on the same day as a medical
visit. Therefore, in this final rule with comment period, we are
modifying our original proposal to allow an exception to the per diem
payment system so that FQHCs can bill separately for mental health
services that are furnished on the same day as a medical visit.
We will also allow an exception to the per diem payment system to
allow FQHCs to bill separately when an illness or injury occurs on the
same day in which a FQHC visit has already occurred. This exception is
available for situations where a Medicare beneficiary has a FQHC visit,
leaves the FQHC, and later in the day has an illness or injury that was
not present during the initial visit. While it does not happen often,
when it does occur we believe the FQHC should be able to bill
separately because it is a unique situation that could not be planned
or anticipated and the FQHC would not benefit from the economies of
scale that can occur when multiple medical issues are addressed in the
same visit.
We do not believe that the circumstances that justify allowing same
day billing for a subsequent injury or illness or a mental health visit
that occurs on the same day as a medical visit also applies to DSMT/
MNT. A DSMT/MNT visit is part of the broad category of primary care
services that are included in the services of a FQHC and are part of
the PPS per diem payment. Visits with multiple practitioners that occur
on the same day, including visits for different conditions or visits
with a specialist physician, are not separately payable in a FQHC under
the all-inclusive payment methodology or the PPS methodology. We do not
see any reason why these DSMT/MNT visits should be considered
differently. Additionally, the cost of a DSMT/MNT visit is far lower
than the cost of a medical or mental health visit, so it would not be
justified to pay separately for those visits at the PPS rate. We also
did not include IPPE as a separately billable visit, because we are
already allowing an adjustment to the PPS rate for a new patient or
initial Medicare visit.
We are allowing the exception to the per diem PPS payment for
mental health services that occur on the same day as a medical visit to
promote access to these services in FQHCs. While this may also
contribute to the coordination of care, this alone will not achieve the
goals of the Affordable Care Act to furnish integrated and coordinated
services. Instead, we believe that these goals may be supported through
an adaptation of the Chronic Care Management (CCM) services program
that will be implemented for physicians billing under the PFS in 2015.
We encourage FQHCs to review the CCM information in the CY 2014 PFS
final rule with comment period titled, ``Medicare Program; Revisions to
Payment Policies under the Physician Fee Schedule, Clinical Laboratory
Fee Schedule & Other Revisions to Part B for CY 2014'' (December 10,
2013 (78 FR 74230)) and submit comments to us on how the CCM services
payment could be adapted for FQHCs in CY 2015 to promote integrated and
coordinated care in FQHCs. We also invite RHCs to submit comments on
how CCM services could be adapted for RHCs in CY 2015 to promote
integrated and coordinated care.
In this final rule with comment period, we are modifying our
proposal not to allow an exception to the per diem PPS payment for
subsequent injury or illness and for mental health services furnished
on the same day as a medical visit, and we invite public comments on
this modification. We are adopting as final our proposal not to allow
an exception to the per diem PPS for DSMT/MNT or IPPE.
2. Preventive Laboratory Services and Technical Components of Other
Preventive Services
The core services of the FQHC benefit are generally billed under
the professional component. The benefit categories for laboratory
services and diagnostic tests generally are not within the scope of the
FQHC benefit, as defined under section 1861(aa) of the Act. For
services that can be split into professional and technical components,
we have instructed FQHCs to bill the professional component as part of
the AIR, and separately bill the Part B MAC under different
identification for the technical portion of the service on a Part B
practitioner claim (for example, Form CMS-1500). If the FQHC operates a
laboratory, is enrolled under Medicare Part B as a supplier, and meets
all applicable Medicare requirements related to billing for laboratory
services,
[[Page 25448]]
it may be able to bill as a supplier furnishing laboratory services
under Medicare Part B. When FQHCs separately bill these services, they
are instructed to adjust their cost reports and carve out the cost of
associated space, equipment, supplies, facility overhead, and personnel
for these services.
As part of the implementation of the FQHC benefit, we used our
regulatory authority to enumerate preventive primary services, as
defined in Sec. 405.2448, which may be paid for when furnished by
FQHCs (57 FR 24980, June 12, 1992, as amended by 61 FR 14657, April 3,
1996). These preventive primary services include a number of laboratory
tests, such as cholesterol screening, stool testing for occult blood,
dipstick urinalysis, tuberculosis testing for high risk patients, and
thyroid function tests. The preventive services added to the FQHC
benefit pursuant to the Affordable Care Act, as defined by section
1861(ddd)(3) of the Act and codified in Sec. 405.2449, include
laboratory tests and diagnostic services, such as screening
mammography, diabetes screening tests, and cardiovascular screening
blood tests.
Professional services or professional components of primary
preventive services (as defined in Sec. 405.2448) and preventive
services (as defined in Sec. 405.2449) are billed as part of the AIR.
The preventive laboratory tests and technical components of other
preventive tests are not paid under the AIR and FQHCs are instructed to
bill separately for these services. We did not propose a change in
billing procedures, and we did not propose to include payment for these
services under the FQHC PPS. We noted this payment structure simplifies
billing procedures as laboratory tests and technical components of
diagnostic services are always billed separately to Part B and are not
included as part of the FQHC's encounter rate. (Note that both the
professional and technical components of FQHC primary preventive
services and preventive services remain covered under Part B).
An analysis of FQHC claims indicates that FQHCs are listing some
preventive laboratory tests and diagnostic services on their all-
inclusive rate claims. In 2011 through 2012, less than 5 percent of
Medicare FQHC claims listed HCPCS codes related to laboratory tests or
diagnostic services. For purposes of modeling adjustments to the FQHC
PPS rate, we considered excluding these line items from the encounter
charge and proportionately reducing the cost-reporting entity's related
cost report data. However, it was not always clear whether the line
item charges for these laboratory tests or diagnostic services were
included in the total charge for the claim or were listed for
informational purposes only. As such, we chose not to adjust the claims
or cost report data based on the presence of the related HCPCS codes on
the claims. As part of the implementation of the FQHC PPS, we plan to
clarify the appropriate billing procedures through program instruction.
Comment: Most commenters were supportive of our intent to clarify
appropriate billing procedures through program instruction, and some
commenters suggested that we also use rulemaking to resolve issues
concerning Medicare billing. Many of these commenters requested greater
clarity on billing for the technical components of FQHC services
separately under Part B.
Response: As we stated in the proposed rule, we plan to clarify the
appropriate billing procedures for technical components of FQHC
services and other billing issues through program instruction, and we
do not believe that clarifications to billing procedures require
rulemaking.
Comment: A commenter disagreed with our conclusion that laboratory
services and diagnostic tests are by definition excluded from the FQHC
benefit. The commenter noted that preventive primary health services
and preventive services, as defined in section 1861(aa)(3) of the Act
and codified in Sec. 405.2448 and Sec. 405.2449 of the regulations,
include a variety of screening tests, and neither the statute nor the
regulations exclude the technical components of these tests from the
FQHC benefit.
Response: We respectfully disagree with this commenter and maintain
that the benefit categories for laboratory services and diagnostic
tests generally are not within the scope of the FQHC benefit, as
defined under section 1861(aa)(3) of the Act. We also maintain that
both the professional and technical components of FQHC primary
preventive services and preventive services, as defined in section
1861(aa)(3) of the Act and codified in Sec. 405.2448 and Sec.
405.2449 of the regulations, are covered under the FQHC benefit.
Laboratory tests and diagnostic services that do not meet the statutory
and regulatory definitions of FQHC primary and preventive services, and
are not otherwise specified in the statute or regulations as within the
scope of the FQHC benefit, are not covered under the FQHC benefit. We
agree with the commenter that neither the statute nor the regulations
specifically exclude the technical components of these tests. We also
note that the FQHC regulations do not distinguish between the technical
and professional components of primary or preventive services. As a
matter of our payment policy, we believe that laboratory tests and
diagnostic services that do not meet the statutory and regulatory
definitions of FQHC primary preventive and preventive services, and are
not otherwise specified in the statute or regulations as within the
scope of the FQHC benefit, are not covered under the FQHC benefit. As a
matter of policy, we believe the payment structure simplifies billing
procedures as laboratory tests and technical components of diagnostic
services are always billed separately to Part B and are never included
as part of the FQHC's encounter rate. We note that this payment
structure does not change the scope of the FQHC benefit.
Comment: A commenter recommended that FQHCs be allowed to bill all
Medicare Part B services on an institutional claim, including technical
components such as x-rays, laboratory tests, and durable medical
equipment which will not be paid as part of the FQHC PPS and would be
billed separately to Medicare Part B.
Response: To distinguish services that are not paid as part of the
encounter rate, we believe that the current billing requirements for
billing services separately to Medicare Part B on a Part B practitioner
claim are more appropriate for most services. We note that the
telehealth originating site facility fee will continue to be billed
separately on an institutional claim.
After consideration of the public comments received, we plan to
clarify the appropriate billing procedures through program instruction,
as proposed.
3. Vaccine Costs
Section 1834(o)(2)(B)(i) of the Act requires that the initial PPS
rates must be set so as to equal in the aggregate 100 percent of the
estimated amount of reasonable costs that would have occurred for the
year if the PPS had not been implemented. This 100 percent must be
calculated prior to application of copayments, per visit limits, or
productivity adjustments. We believe that this language directed us to
develop a PPS to pay for items currently paid under the AIR.
The administration and payment of influenza and pneumococcal
vaccines is not included in the AIR. They are paid at 100 percent of
reasonable costs through the cost report. The cost and administration
of HBV is covered under the FQHC's AIR when furnished as part of an
otherwise qualifying encounter.
[[Page 25449]]
We did not propose any changes to this payment structure, rather, we
stated that we would continue to pay for the costs of the influenza and
pneumococcal vaccines and their administration through the cost report,
and other Medicare-covered vaccines as part of the encounter rate. The
costs of hepatitis B vaccine and its administration were included in
the calculation of reasonable costs used to develop the FQHC PPS rates,
and we would continue paying for these services under the FQHC PPS when
furnished as part of an otherwise qualifying encounter.
Comment: A few commenters requested clarification regarding
coverage and payment for vaccines recommended by the Advisory Committee
on Immunization Practices (ACIP) of the Centers for Disease Control and
Prevention (CDC) that are typically covered and paid under Medicare
Part D. They believe that these vaccines, when furnished by FQHCs,
should be covered and paid separately by Part D plans and should not be
covered and paid for as part of a FQHC encounter.
Response: Under section 1862(a)(7) of the Act, as codified at 42
CFR 411.15(e) of our regulations, immunizations other than
pneumococcal, influenza, and HBV are generally excluded from Medicare
Part B coverage. Section 4161(a)(3)(C) of OBRA '90 (Pub. L. 101-508)
amended section 1862(a) of the Act to specify that the FQHC benefit can
include preventive primary health services, as described in section
1861(aa)(3)(B) of the Act, that would otherwise be excluded from Part B
under section 1862(a)(7) of the Act. Preventive primary services, as
defined in Sec. 405.2448, describes which services may be paid for
when furnished by FQHCs. (See the June 12, 1992 (57 FR 4980) and April
3, 1996 (61 FR 4657) final rules). These preventive primary services
include immunizations (see Sec. 405.2448(b)(8)). This means that when
FQHCs furnish ACIP-recommended vaccines, they are covered and paid for
under Part B as part of the FQHC benefit, and are excluded from Part D.
Except for pneumococcal and influenza vaccines and their
administration, which are paid at 100 percent of reasonable cost,
payments to FQHCs for covered FQHC services furnished to Medicare
beneficiaries are made on the basis of an AIR per covered visit. The
charges for other Medicare-covered vaccines and their administration
when furnished by a FQHC can be included as line items for an otherwise
qualifying encounter, and payment for these other Medicare-covered
vaccines would be included in the AIR. However, an encounter cannot be
billed if vaccine administration is the only service the FQHC provides.
For more information on how to bill under the AIR for services
furnished incident to a FQHC encounter, see CMS Pub. 100-04, Medicare
Claims Processing Manual, chapter 9.
Section 10501(i)(3)(A) of the Affordable Care Act did not amend the
coverage requirements applicable to the FQHC benefit. We did not
propose to remove immunizations from the preventive primary services
set out at Sec. 405.2448, and immunizations furnished by FQHCs after
implementation of the PPS will continue to be covered under Part B as
part of the FQHC benefit. We proposed to continue to pay for the costs
of the influenza and pneumococcal vaccines and their administration
through the cost report, and other Medicare-covered vaccines as part of
the encounter rate. As part of the implementation of the FQHC PPS, we
plan to update the appropriate billing procedures through program
instruction.
We note that under 1860D-2(e)(2)(B) of the Act, a drug prescribed
to a Part D eligible individual that would otherwise be a covered Part
D drug is excluded from Part D coverage if payment for such drug, as so
prescribed and dispensed or administered, is available under Part A or
B for that individual. Consequently, vaccines furnished by FQHCs and
covered under Part B as part of the FQHC benefit in accordance with
Sec. 405.2448(b)(8) are not covered or payable under Part D. For more
information on the exclusion from Part D of drugs covered under Part B,
see CMS Pub. 100-18, Medicare Prescription Drug Benefit Manual, Chapter
6. Section 20.2.
Comment: A few commenters recommended that CMS apply a consistent
approach to payment for vaccines covered under Part B, which commenters
asserted would ensure broad access for Medicare beneficiaries. These
commenters recommended that CMS pay for the cost and administration of
the HBV at 100 percent of reasonable cost through the cost report. A
commenter recommended that influenza and pneumococcal vaccines should
be billed at time of service, either with or without an encounter, and
be paid using the national MAC fees, with an annual reconciliation on
the cost report between the payments and the reasonable costs of these
vaccines. This commenter wished to reduce the time between vaccine
administration and payment and to document on individual patient claims
that these vaccines were furnished. However, most commenters supported
our proposal to continue to reimburse influenza and pneumococcal
vaccines through the cost report.
Response: As discussed in the preamble to the April 3, 1996 FQHC
final rule (61 FR 14651), section 1833(a)(3) of the Act specifies that
services described in section 1861(s)(10)(A) of the Act are exempt from
payment at 80 percent of reasonable costs and payment to RHCs and FQHCs
for influenza and pneumococcal vaccines and their administration is at
100 percent of reasonable cost. Consistent with section 1833(a)(3) of
the Act, we used our regulatory authority to codify at Sec.
405.2466(b)(1)(iv) that for RHCs and FQHCs, payment for pneumococcal
and influenza vaccine and their administration is 100 percent of
Medicare reasonable cost paid as part of the annual reconciliation
through the cost report (61 FR 14657, April 3, 1996). Payment for all
other Medicare-covered vaccines is included in the AIR, and we proposed
to continue to pay for all other Medicare-covered vaccines as part of
the encounter rate under the FQHC PPS. We note that HBV is described in
section 1861(s)(10)(B) of the Act, and we do not believe that the
statute directs us to change the payment structure to pay for HBV at
100 percent of reasonable cost through the cost report.
We considered the commenter's request to pay for influenza and
pneumococcal vaccines billed at time of service with an annual
reconciliation between these payments and reasonable costs and we do
not believe this would be necessary. FQHCs are accustomed to reporting
and receiving payment for the reasonable costs for these vaccines and
their administration through the annual cost report, and we believe
that an annual reconciliation between vaccine fee amounts and
reasonable costs would create an additional administrative burden for
FQHCs and MACs. We also note that as of January 1, 2011, FQHCs have
been required to report pneumococcal and influenza vaccines and their
administration on a patient claim with the appropriate HCPCS and
revenue codes when furnished during a billable visit.
After consideration of the public comments received, we are
finalizing these provisions as proposed. We will continue to pay for
the administration and payment of influenza and pneumococcal vaccines
at 100 percent of reasonable costs through the cost report, and we will
continue to pay for other Medicare-covered vaccines under the FQHC PPS
as part of the encounter rate when furnished as part of an otherwise
qualifying encounter.
[[Page 25450]]
C. Risk Adjustments
Section 1834(o)(1)(A) of the Act provides that the FQHC PPS may
include adjustments, including geographic adjustments, that are
determined appropriate by the Secretary. We proposed the following
adjustments.
1. Alternative Calculations for Average Cost per Visit
For the proposed rule, we used the claims data to calculate an
average cost per visit by dividing the total estimated costs
($788,547,531) by the total number of daily visits (5,223,512).
Proposed average cost per daily visit = $788,547,531/5,223,512 =
$150.96
For this final rule with comment period, we modified the definition
of a daily visit, as discussed in section II.A.4. of this final rule
with comment period and consistent with the policy discussed in section
II.B.1. of this final rule with comment period, which allows an
exception to the per diem PPS payment for subsequent injury or illness
and mental health services furnished on the same day as a medical
visit. Separately payable encounters for the same beneficiary at the
same FQHC were combined into a single daily visit, while allowing for a
separate medical visit, mental health visit, and subsequent illness/
injury visit, which allows for up to three encounters for beneficiary
per day.
For this final rule with comment period, we used the updated claims
data to calculate an average cost per visit by dividing the total
estimated costs ($846,058,100) by the total number of daily visits
(5,462,670).
Final average cost per daily visit = $846,058,100/5,462,670 = $154.88
In the proposed rule, we also examined how the average cost per
visit would differ under current policy, which allows separate payment
for subsequent illness or injury, mental health services, DSMT/MNT or
IPPE when they occur on the same day as an otherwise billable visit.
While the total estimated cost was the same ($788,547,531), the total
number of visits in the denominator (5,245,961) did not combine
multiple visits on the same day of service into 1 daily visit.
Proposed average cost per visit = $788,547,531/5,245,961 = $150.32
For this final rule with comment period, we used the updated final
data set to examine how the average cost per visit would differ under
current policy. While the total estimated cost was the same
($846,058,100), the total number of visits in the denominator
(5,468,852) did not combine multiple visits on the same day of service.
Final average cost per visit = $846,058,100/5,468,852 = $154.70
In the proposed rule, we also derived an average cost per visit
from the cost reports by dividing the total estimated Medicare costs
(excluding vaccines) reported ($832,387,663) by the total number of
Medicare visits reported (5,374,217). Unlike the previous calculations
based on claims data, the variables derived from the cost reports
summarize total costs and visits by cost reporting entity and could not
be trimmed of individual visits with outlier values. Also, we noted
that the total number of Medicare visits reported on the cost reports
reflects current policy which allows for multiple visits on the same
day of service, and we could not calculate an average cost per daily
visit using only cost report data.
Proposed average cost per visit from cost report data = $832,387,663/
5,374,217 = $154.89
For this final rule with comment period, we used the current data
set to update the average cost per visit derived from the cost reports
by dividing the total estimated Medicare costs (excluding vaccines)
reported ($897,330,363) by the total number of Medicare visits reported
(5,634,602).
Final average cost per visit from cost report data = $897,330,363/
5,634,602 = $159.25
Consistent with our proposal to remove the exception to the single
encounter payment per day, we proposed to use the average cost per
daily visit of $150.96, as calculated based on adjusted claims data, as
the PPS rate prior to any risk adjustment. We noted that the
alternative calculations yield an average cost per visit that differs
from $150.96 by less than 3 percent. We also noted that these
calculations were derived based on the cost report and claims data
available during our development of the proposed rule and were subject
to change in the final rule based on more current data.
For this final rule with comment period, consistent with our policy
to allow an exception to the per diem PPS payment for subsequent injury
and mental health services furnished on the same day as a medical
visit, we will use the average cost per daily visit of $154.88, as
calculated above based on adjusted claims data, as the final PPS rate
prior to any risk adjustment. We note that the alternative calculations
yield an average cost per visit that differs from $154.88 by less than
3 percent.
2. FQHC Geographic Adjustment Factor
We proposed to adjust the FQHC PPS rate for geographic differences
and to make this adjustment to the cost of inputs by applying an
adaptation of the GPCIs used to adjust payment under the PFS.
Established in section 1848(e) of the Act, GPCIs adjust payments for
geographic variation in the costs of furnishing services and consist of
three component GPCIs: The physician work GPCI, the practice expense
GPCI, and the malpractice insurance GPCI.
Since FQHCs furnish services that are analogous to those furnished
by physicians in outpatient clinic settings, we believe it would be
consistent to apply geographic adjustments similar to those applied to
services furnished under the PFS. We calculated a FQHC geographic
adjustment factor (FQHC GAF) for each encounter based on the delivery
site's locality using the proposed CY 2014 work and practice expense
GPCIs and the proposed cost share weights for the CY 2014 GPCI update,
as published in the CY 2014 PFS proposed rule on July 19, 2013 (78 FR
43282).
For modeling geographic adjustments for the FQHC PPS proposed rule,
we did not use the proposed CY 2015 work and practice expense GPCIs
that also were published in the CY 2014 PFS proposed rule. We noted
that the FQHC GAFs are subject to change in the final FQHC PPS rule
based on more current data, including the finalized PFS GPCI and cost
share weight values.
We excluded the PFS malpractice GPCI from the calculation of the
FQHC GAF, as FQHCs that receive section 330 grant funds are eligible to
apply for medical malpractice coverage under FSHCAA of 1992 and FSHCAA
of 1995. Without the cost share weight for the malpractice GPCI, the
sum of the proposed PFS work and PE cost share weights (0.50866 and
0.44839, respectively) is less than one. In calculating the FQHC GAFs,
prior to applying the proposed work and PE cost share weights to the
GPCIs, we scaled these proposed cost share weights so they would total
100 percent while still retaining weights relative to each other
(0.53149 and 0.46851, respectively).
We calculated each locality's FQHC GAF as follows:
Geographic adjustment factor = (0.53149 x Work GPCI) + (0.46851 x PE
GPCI)
We included the FQHC GAF adjustment when modeling all other
potential adjustments. We proposed to apply the FQHC GAF based on where
the services are furnished, and we noted the FQHC GAF may vary among
FQHCs
[[Page 25451]]
that are part of the same organization. The list of proposed FQHC GAFs
by locality was included in the Addendum of the proposed rule and as a
downloadable file at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FQHCPPS/index.html.
Comment: Commenters were supportive of a FQHC GAF adjustment, but
some suggested changes to the proposed FQHC GAFs. Some commenters
suggested that the rural FQHC GAFs may not reflect the actual cost of
furnishing FQHC services in rural areas, and they requested that we
increase the rural FQHC GAFs. Some of these commenters believe that the
factors influencing costs for urban versus rural providers are not
identical for FQHCs and physician practices. Among the concerns raised
by these commenters are that a rural FQHC's operating costs (such as
utilities and transportation costs) may be higher than similar costs of
FQHCs in urban areas; predominantly rural FQHCs often have fewer sites
than urban FQHCs and benefit less from economies of scale; and FQHCs
located in rural areas may incur additional costs if they offer payment
incentives in order to recruit and retain qualified physicians and non-
physician practitioners.
Response: Since FQHCs furnish services that are analogous to those
furnished by physicians in outpatient clinic settings, we proposed to
adapt the PFS GPCIs to calculate the FQHC GAFs, as we believe it would
be consistent to apply geographic adjustments similar to those applied
to services furnished under the PFS. As discussed in the CY 2014 PFS
final rule with comment period, we used updated Bureau of Labor
Statistics (BLS) Occupational Employment Statistics data to calculate
the work GPCI and purchased services index of the PE GPCI and updated
U.S. Census Bureau American Community Survey (ACS) data to calculate
the rent component (which includes utilities) of the PE GPCI. Given
their reliability, public availability, level of detail and national
scope with sufficient data coverage in both urban and rural areas, we
believe that the ACS and BLS data are the most appropriate sources for
measuring geographic cost differences in operating a medical practice.
(See our discussion in the CY 2014 PFS final rule with comment period
(78 FR 74380 through 74381)). We believe that the data used to develop
the PFS GPCIs are reflective of the costs of furnishing FQHC services,
including the geographic variation in the costs of furnishing FQHC
services in rural areas. Moreover, we do not have a comprehensive
national source that would provide us with a basis for adjusting the
FQHC GAFs for rural areas independently of the PFS GPCIs while meeting
data selection criteria similar to the criteria used for selecting the
PFS GPCI sources. We also note that as discussed later in this section,
many rural areas would see a substantial decrease in payment amounts if
they were no longer grouped with urban areas.
Comment: A commenter was concerned that FQHCs with multiple
delivery sites with different costs may be penalized if accommodation
for these different sites is not taken into account.
Response: We proposed to apply the FQHC GAF based on where the
services are furnished. Therefore, for FQHCs with multiple delivery
sites in different areas, the FQHC GAF may vary depending on the
delivery site.
Comment: A commenter was concerned that application of the FQHC GAF
reduces its PPS rate below the proposed base rate, which is below its
cost of furnishing FQHC services.
Response: Under the FQHC PPS, Medicare payment for FQHC services is
based on 100 percent of aggregate reasonable costs, not on an
individual FQHC's costs. While the FQHC GAF will vary by locality, we
note that the fully implemented, geographically adjusted PPS rate for
all FQHCs will be approximately 32 percent higher, based on payment at
the FQHC PPS rate, when compared to current payments to FQHCs.
Comment: A commenter noted that FQHC lookalikes do not have access
to malpractice coverage under the Federal Tort Claims Act (FTCA) and
therefore incur malpractice expense. The commenter requested that CMS
incorporate a malpractice adjustment in the FQHC GAFs for FQHC
lookalikes, or otherwise recognize malpractice expense under the FQHC
PPS.
Response: FQHCs that receive section 330 grant funds are the
predominant type of FQHC, with more than 1,100 centers operating
approximately 8,900 delivery sites. These FQHCs are eligible to apply
for medical malpractice coverage under the FTCA. In comparison, there
were 93 look-alikes in 2012, according to HRSA's UDS. The PPS rate is
based on aggregate costs, and assumes that not all FQHCs have the same
costs. It would not be feasible to develop separate PPS rates for FQHCs
based on differences in malpractice or any other costs. We excluded the
PFS malpractice GPCI from the calculation of the FQHC GAF as the
geographic variation in malpractice costs is not relevant for the
majority of FQHCs that are eligible to apply for medical malpractice
coverage under the FTCA. We note that FQHCs are required to report
professional liability insurance on Worksheet A of the FQHC cost report
(Form CMS-222), and malpractice expense was recognized as a component
of the reasonable costs used to calculate the FQHC PPS rates.
Comment: A commenter disagreed with our adaptation of the PFS GPCIs
and recommended that we adjust the FQHC PPS rate for geographic
differences based on Metropolitan Statistical Areas (MSAs). The
commenter believes that use of the current PFS locality structure would
result in underpayment for FQHC services furnished in several
California counties.
Response: As previously noted, because FQHCs furnish services that
are analogous to those furnished by physicians in outpatient clinic
settings, we believe it would be consistent to apply geographic
adjustments similar to those applied to services furnished under the
PFS. Moreover, by adapting the PFS GPCIs for the FQHC PPS, the accuracy
of FQHC payments also benefits from the ongoing assessment, evaluation,
and updates to the PFS GPCIs, including the periodic review and
adjustment of GPCIs as mandated by section 1848(e)(1)(C) of the Act.
We note that adjusting the FQHC PPS rate for geographic differences
based on MSAs could result in significant reductions in payment for
rural FQHCs when compared to geographically adjusted payments using the
current PFS locality configuration. As discussed in the CY 2014 PFS
final rule with comment period, published in the Federal Register on
December 10, 2013 (78 FR 74230), a MSA-based locality structure would
expand the number of PFS payment localities, and many rural areas would
see substantial decreases in their GPCI values given that they would no
longer be grouped together with higher cost counties (78 FR 74380
through 74391). If the PFS locality structure or GPCI values changed,
we would make corresponding changes to the FQHC localities and FQHC
GAFs. As other methodologies emerge for geographic payment adjustment
under the PFS, they may also eventually apply to the new FQHC PPS.
Comment: A commenter recommended that after the first year of
implementation, we use a market basket approach to adjust payments
based on geographic locations. The commenter suggested that we revise
the FQHC cost report to capture additional wage data that, in
conjunction with HRSA's UDS data, could be used to develop a wage
[[Page 25452]]
index to adjust the PPS rate based on reported salary differentials.
Response: We appreciate the commenter's interest in developing a
wage index for the FQHC PPS. We believe that a FQHC GAF based on the
PFS GPCIs is appropriate for FQHC services, as an FQHC's employment mix
and scope and delivery of services are generally similar to a
physician's practice. We note that a FQHC GAF based solely on a wage
index, which is a relative measure of geographic differences in wage
levels, would not reflect the relative cost difference in the full mix
of goods and services comprising the PFS practice expense GPCIs (for
example, purchased services, office rent, equipment, supplies, and
other miscellaneous expenses). We do not believe that the additional
reporting burden suggested by the commenter, or the additional
administrative burden of collecting and validating the type of data
needed for a reliable FQHC wage index, would justify the potential
incremental benefit of using a FQHC-specific wage index in calculating
the FQHC GAFs.
Comment: A commenter asked why we did not use the CY 2015 GPCI
values to calculate the FQHC GAFs.
Response: For modeling geographic adjustments for the FQHC PPS
proposed rule, we used the CY 2014 work and practice expense GPCIs
published in the CY 2014 PFS proposed rule. We noted that the FQHC GAFs
could be subject to change in the final FQHC PPS rule based on more
current data, including the finalized PFS GPCI and cost share weight
values.
As discussed in the CY 2014 PFS final rule with comment period (78
FR 74380 through 74391), the CY 2015 PFS GPCI values reflect our most
current updates of the underlying data sources and represent our best
estimates of the geographic variation in the costs of furnishing
physician services. In contrast, the CY 2014 GPCI values partially
reflect the updates to the underlying data and MEI cost weights.
Therefore, we will use the CY 2015 GPCI values, as published in the CY
2014 final rule with comment period, to model the geographic
adjustments for the FQHC PPS rates as they represent the most current
data. We note that the PFS cost share weights were finalized as
proposed, and we will use the relative weights of the PFS work and PE
GPCIs, as proposed and finalized, to calculate each locality's FQHC
GAF.
For payments under the FQHC PPS, we believe it most appropriate to
apply geographic adjustments consistent with those applied to services
furnished under the PFS during the same period. Therefore, the FQHC
GAFs and cost share weights will be updated in conjunction with updates
to the PFS GPCIs, which would maintain consistency between the
geographic adjustments applied to the PFS and the FQHC PPS in the same
period. We note that the FQHC GAFs for October 1 through December 31,
2014, will be adapted from the CY 2014 PFS GPCIs applicable during that
same period. Subsequent updates to the FQHC GAFs will be made in
conjunction with updates to the PFS GPCIs for the same period.
We have considered the public comments we received, and are
finalizing the FQHC GAF provisions as proposed, with some
modifications. As proposed, we are revising Sec. 405.2462 to require
that payments under the FQHC PPS will be adjusted for geographic
differences by applying an adaptation of the work and practice expense
GPCIs used to adjust payment under the PFS. We are modifying Sec.
405.2462 to specify that the FQHC GAFs used for payment will be adapted
from the GPCIs used to adjust payment under the PFS for that same
period.
For modeling geographic adjustments for the FQHC PPS proposed rule,
we did not use the proposed CY 2014 work and practice expense GPCIs
that were published in the CY 2014 PFS proposed rule. Instead, for
modeling the geographic adjustments for this FQHC PPS final rule, we
used the final CY 2015 work and practice expense GPCIs and cost shares
that were published in the CY 2014 PFS final rule with comment period
as the CY 2015 GPCI values represent the most recent fully implemented
GPCI update and therefore more current data. More information on how we
modeled the FQHC PPS geographic adjustment is discussed in section
II.D. of this final rule with comment period.
3. New Patient or Initial Medicare Visit
Based on an analysis of claims data, we found that the estimated
cost per encounter was approximately 33 percent higher when a FQHC
furnished care to a patient that was new to the FQHC or to a
beneficiary receiving a comprehensive initial Medicare visit (that is,
an IPPE or an initial AWV). We proposed to adjust the encounter rate to
reflect the 33 percent increase in costs when FQHCs furnish care to new
patients or when they furnish a comprehensive initial Medicare visit,
which could account for the greater intensity and resource use
associated with these types of services. Our proposed risk adjustment
factor was 1.3333.
Comment: Commenters supported the proposed adjustments, but some
recommended that we also apply the adjustment factor to subsequent
AWVs. Commenters recommended that we allow an adjustment for subsequent
AWVs in addition to initial AWVs in order to support the goal of
improving health outcomes and increasing access to subsequent AWVs.
Commenters also believe that the subsequent AWV is similar to the
increased intensity of the IPPE and initial AWV, in terms of both the
duration of the visits and the number of ancillary services furnished.
Response: Subsequent AWV is a very small percent of total FQHC
visits (approximately 0.25 percent), but the claims data suggest that
subsequent AWV is significantly more costly than most other FQHC
visits. The claims data also suggest that subsequent AWV is somewhat
less costly than an IPPE or initial AWV, which is consistent with the
comparatively reduced level of required physician work associated with
the subsequent AWV. As previously noted, our goal for the FQHC PPS is
to implement a system in accordance with the statute whereby FQHCs are
fairly paid for the services they furnish to Medicare patients in the
least burdensome manner possible. Rather than establish a separate
adjustment for subsequent AWV, we will add the subsequent AWV to the
proposed adjustment for new patient or initial Medicare visit. Based on
current FQHC data, the composite group of new patient visits, IPPEs,
initial AWVs, and subsequent AWVs is associated with 34.16 percent
higher estimated costs than other visits.
In this final rule with comment period, we are modifying our
proposal, and we will adjust the encounter rate to reflect the 34.16
increase in costs when FQHCs furnish care to new patients or when they
furnish an IPPE, initial AWV, or subsequent AWV, which could account
for the greater intensity and resource use associated with these types
of services. Our composite risk adjustment factor for these types of
visits is 1.3416.
4. Other Adjustment Factors Considered
We considered multiple other adjustments such as demographics (age
and sex), clinical conditions, duration of the encounter, etc. However,
we found many of these other adjustments to have limited impact on
costs or to be too complex and largely unnecessary for the FQHC PPS.
We calculated whether there were differences in resource use for
mental health visits and preventive care visits when compared to
medical care visits
[[Page 25453]]
using mathematical modeling techniques. We found that mental health
encounters had approximately 1 percent lower estimated costs per visit
relative to medical care visits, and we did not consider this a
sufficient basis for proposing a payment adjustment. We found that
preventive care encounters had approximately 18 percent higher
estimated costs per visit. This difference in resource use declined to
an 8 percent higher estimated cost per visit after adjusting for the
FQHC GAF and the proposed 1.3333 risk adjustment factor for a patient
that is new to the FQHC or for a beneficiary receiving a comprehensive
initial Medicare visit (that is, an IPPE or an initial AWV), indicating
that a significant amount of preventive care visits were IPPEs or
initial AWVs. We did not propose a payment reduction for preventive
care encounters and we noted that a significant amount of the more
costly preventive care encounters would otherwise be recognized and
paid for with the proposed 1.3333 risk adjustment factor for a
beneficiary receiving a comprehensive initial Medicare visit.
We considered patient age and sex as potential adjustment factors
as these demographic characteristics have the advantage of being
objectively defined. However, both of these characteristics had a
limited association with estimated costs, which did not support the use
of these demographic characteristics as potential adjustment factors.
We tested for an association between commonly reported clinical
conditions and the estimated cost per visit. A number of clinical
conditions were found to be associated with approximately 5 to 10
percent higher costs per visit, but we are concerned that claims might
not include all potentially relevant secondary diagnoses, and that we
would need to consider how to minimize the complexity of such an
adjustment with a limited number of clinically meaningful groupings.
We considered the duration of encounters (in minutes) as a
potential adjustment factor. Many of the E/M codes commonly seen on
FQHC claims are associated with average or typical times, and there was
a strong association between these associated times and the estimated
cost per encounter. However, these minutes are guidelines that reflect
the face-to-face time between the FQHC practitioner and the beneficiary
for that E/M service, and they would not indicate the total duration of
the FQHC encounter. Moreover, many of the codes used to describe the
face-to-face visit that qualifies an encounter, such as a subsequent
AWV, are not associated with average or typical times.
We considered adjusting payment based on the types of services
furnished during a FQHC encounter. Our analysis of FQHC claims data
indicates that information regarding ancillary services provided by
FQHCs appears to be limited. As a result, there is a risk that
adjustments for the types of services being provided would be based on
incomplete information and result in payments under the PPS that do not
accurately reflect the cost of providing those services.
Comment: Several commenters recommended that CMS address the
special circumstances facing Indian health providers by considering the
inclusion of a low-volume upward adjustment, a population-density
adjustment, and a service-mix adjustment to the PPS rate. These
commenters stated that a volume adjustment is necessary because low-
volume tribal FQHCs find it more difficult to spread their costs across
their patient base, and are less likely to obtain volume discounts and
benefit from economies of scale. They also stated that many tribal
FQHCs in rural areas furnish less complex or lower intensity services
than urban providers, resulting in different payment-to-cost ratios
that result in reimbursement inequities.
Response: We appreciate the challenges that tribal FQHCs face in
furnishing services, especially in rural and isolated areas, and the
significant health disparities that remain for AI/AN populations. We
also understand that providers in isolated and rural areas, including
tribal FQHCs, may have fewer patients than providers in more densely
populated areas, and may not be able to offer as full of a range or
level of complexity in their services as other providers, or benefit
from the economies of scale that providers with higher volume or in
more densely populated areas may have. In developing the PPS rate, we
considered various possible adjustments, including a low-volume
adjustment. When analyzing Medicare claims data, lower overall FQHC
volume was found to be associated with higher estimated costs (see
``Results of Research on the Design of a Medicare Prospective Payment
System for Federally Qualified Health Centers'' by Arbor Research
Collaborative for Health). However, we did not propose to include a
low-volume adjustment, because we believe that the PPS rate, along with
adjustments for new and initial visits and AWV, will provide
appropriate reimbursement for the costs of services provided.
Comment: Commenters were generally supportive of a single base rate
with a geographic adjustment and an adjustment for new patients and
initial Medicare visits. Some commenters recommended additional
adjustments, such as: high acuity of patients; visit characteristics;
multiple chronic conditions; encounters with more than two HCPCS codes
on the claim; unique geographical differences among FQHCs; and dual
eligible beneficiaries.
Response: As discussed in the proposed rule, FQHC claims data
regarding secondary diagnoses and ancillary services appears to be
limited. As a result, there is a risk that the recommended adjustments,
such as increased payments for high acuity, multiple chronic
conditions, or encounters with multiple HCPCS, could be based on
incomplete information. Our analyses of clinical conditions, encounter
duration, and types of service, which considered the same or similar
types of adjustments, found that these adjustments had limited impact
on costs or were too complex for the FQHC PPS. Our analysis of more
current data continues to support these conclusions. As discussed in
section II.C.2. of this final rule with comment period, we believe it
is appropriate to adjust for geographic differences among FQHCs using
the GAF.
We tested for an association between dual eligibility and the
estimated cost per visit. On average, the estimated cost of a FQHC
visit was 4 percent higher among dual eligible beneficiaries. After
applying the GAF and the new patient/initial visit adjustment to the
model, the estimated cost of a FQHC visit was, on average, 0.4 percent
higher among dual eligible beneficiaries. We do not believe that this
slight variation in estimated cost justifies the added complexity of an
additional payment adjustment for dual eligible beneficiaries.
Comment: A commenter recommended that CMS include an upward
adjustment for FQHCs that provide significant ``enabling services.''
The commenter believes that non-clinical services provided to patients
to support care delivery, enhance health literacy, or facilitate access
to care can reduce health disparities and improve outcomes for FQHC
patients.
Response: While FQHCs, including look-alikes, are required by
section 330 of the PHS Act to provide services that enable individuals
to use the required primary health services that they provide, these
services are not part of the Medicare FQHC benefit.
[[Page 25454]]
Comment: Some commenters believe that the PPS payment methodology
removes incentives to provide fewer, more intensive visits and
recommended that CMS increase payments to high-performing FQHCs that
furnish efficient, integrated care. Some commenters recommended that
CMS encourage expanded access to care, the development of medical
homes, and horizontal networks of care by applying upward adjustments
to FQHCs that offer value-added services, such as a broader scope of
services, expanded hours, or teaching health centers.
Response: While we appreciate the suggestions, neither the cost
report nor the claims data contains sufficient information to assess
the validity of commenters' claims with respect to these types of
adjustments. Moreover, the types of adjustments suggested by these
commenters are beyond the scope of the FQHC PPS methodology. However,
we are taking steps to foster innovation in how FQHCs deliver services
to Medicare beneficiaries. For example, the FQHC Advanced Primary Care
Practice (APCP) Demonstration, operated by CMS in partnership with
HRSA, is designed to evaluate the effect of the advanced primary care
practice model in improving care, promoting health, and reducing the
cost of care provided to Medicare beneficiaries served by FQHCs. This
demonstration is being conducted in accordance with the Secretary's
demonstration authority under section 1115A, which facilitates the
development and expansion of successful payment models. For more
information on the FQHC APCP, see http://www.fqhcmedicalhome.com/.
Comment: A commenter noted that CMS did not include data from
provider-based FQHCs in its costs calculations, asserted that provider-
based FQHCs experience higher costs than freestanding FQHCs, and urged
CMS to add an adjustment to ensure payments to provider-based FQHCs
recognize their differential costs.
Response: As discussed in section II.A.2. of this final rule with
comment period, in developing the rates for this final rule with
comment period, we included data from provider-based FQHCs in
calculating the PPS rate. Under the FQHC PPS, Medicare payment for FQHC
services is not based on an individual FQHC's costs. The cost report
and claims data do not support an adjustment for provider-based FQHCs.
While the average cost per visit is somewhat higher for provider-based
FQHCs than for freestanding FQHCs, none of the provider-based FQHCs
were identified as outliers based on the average cost per visit from
the cost reports, and only 0.4 percent of the encounters in the claims
were identified as outliers based on estimated costs.
5. Report on PPS Design and Models
We contracted with Arbor Research for Collaborative Health to
assist us in designing a PPS for FQHCs. Arbor Research modeled options
for calculating payment rates and adjustments under a PPS based on data
from Medicare FQHC cost reports and Medicare FQHC claims. A report
detailing the options modeled in the development of the PPS was made
available at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FQHCPPS/index.html.
D. Base Rate Calculation
We calculated a proposed base rate for the FQHC PPS by adjusting
the average cost per visit to account for the proposed adjustment
factors. We calculated a proposed average payment multiplier using the
average FQHC GAF (0.9944) multiplied by the average risk adjustment for
non-new patient/initial visits (1.0), as weighted by the percent of
encounters that represented non new patient/initial visits (0.9722),
and we added this to the average FQHC GAF (0.9944) multiplied by the
average risk adjustment for new patient/initial visits (1.3333), as
weighted by the percent of encounters that represented new patient/
initial visits (0.0278):
Proposed average payment multiplier = 0.9721(1.00)(0.9944) +
0.0279(1.3333)(0.9944) = 1.0036
We calculated a proposed base rate amount by multiplying the
reciprocal of the average payment multiplier by the average cost per
visit. Using the average cost per daily visit:
Proposed base rate per daily visit = $150.96 x (1/1.0036) = $150.42
The proposed base rate per daily visit of $150.42 reflected costs
through June 30, 2012, and did not include an adjustment for price
inflation. As the FQHC PPS is to be implemented beginning October 1,
2014, we proposed to update the base rate to account for the price
inflation through September 30, 2014, as measured by the MEI as
finalized in the CY 2011 PFS final rule (75 FR 73262 through 73270).
The MEI is an index reflecting the weighted-average annual price change
for various inputs involved in furnishing physicians' services. The MEI
is a fixed-weight input price index, with an adjustment for the change
in economy-wide, private nonfarm business multifactor productivity.
We proposed to inflate the base rate by approximately 1.8 percent,
reflecting the growth in the MEI from July 1, 2012 through September
30, 2014. We also proposed to use a forecasted MEI update of 1.7
percent for the 15-month period of October 1, 2014, through December
31, 2015, to calculate the first year's base payment amount under the
PPS. We also proposed if more recent data became available (for
example, a more recent estimate of the FY 2006-based MEI), we would use
such data, if appropriate, to determine the 15-month FQHC PPS update
factor for the final rule.
Table 1--Proposed Base Rate per Daily Visit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated base
Average rate without MEI-Adjusted
Total estimated costs Daily payment Average cost adjustment for MEI Update base payment
encounters multiplier per daily visit price factor rate
inflation
--------------------------------------------------------------------------------------------------------------------------------------------------------
$788,547,531...................................... 5,223,512 1.0036 $150.96 $150.42 1.0364 $155.90
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed MEI-adjusted base payment rate = $150.96 x (1/1.0036) x 1.0364
= $155.90
Thus, we proposed a base payment rate of $155.90 per beneficiary
per visit for the proposed FQHC PPS. We noted that this base rate is
subject to change in the final rule based on more current data.
Proposed payments to FQHCs were calculated as follows:
Proposed base payment rate x FQHC GAF = Proposed PPS payment
In calculating the proposed payment, the proposed base payment rate
was $155.90, and the FQHC GAF was based on the locality of the delivery
site.
[[Page 25455]]
If the patient is new to the FQHC, or the FQHC is furnishing an
initial comprehensive Medicare visit, we proposed that the payment
would be calculated as follows:
Proposed base payment rate x FQHC GAF x 1.3333 = Proposed PPS payment
In calculating the proposed payment, 1.3333 represented the risk
adjustment factor applied to the PPS payment when FQHCs furnish care to
new patients or when they furnish a comprehensive initial Medicare
visit.
To calculate the FQHC base rate for this final rule with comment
period, we used updated data, the finalized adjustment factors, the
finalized definition of a daily visit (as discussed in sections II.A.4.
and II.B.1. of this final rule with comment period), and the finalized
adjustment for a new patient, IPPE, initial AWV, and subsequent AWV (as
discussed in section II.C.3. of this final rule with comment period).
We calculated a final base rate for the FQHC PPS by adjusting the
average cost per visit to account for the finalized adjustment factors.
We calculated a final average payment multiplier using the average
final FQHC GAF (0.9961) multiplied by the average risk adjustment for
non-new patient/IPPE/AWV (1.0), as weighted by the percent of
encounters that represented non-new patient/IPPE/AWV (0.9683), and we
added this to the average final FQHC GAF (0.9961) multiplied by the
average risk adjustment for new patient/IPPE/AWV (1.3416), as weighted
by the percent of encounters that represented new patient/IPPE/AWV
(0.0317):
Final average payment multiplier = 0.9683(1.00)(0.9961) +
0.0317(1.3416)(0.9961) = 1.0069
We calculated a final base rate amount by multiplying the
reciprocal of the final average payment multiplier by the final average
cost per visit. Using the average cost per daily visit:
Final base rate per daily visit = $154.88 x (1/1.0069) = $153.82
We did not receive any comments on our use of the MEI to update the
FQHC base rate. Our final data set reflects cost reporting periods
ending between June 30, 2011, and June 30, 2013. Given that the updated
cost data typically has a midpoint that is close to the middle of 2012,
we are continuing to use June 30, 2012, as the starting point for
inflating prices forward. We are finalizing our proposal to update the
FQHC base rate per daily visit for inflation using the growth as
measured by the MEI from July 2012 through December 2015. The estimated
base rate of $153.82 per diem is inflated through FY 2014 using the
historical MEI market basket increase of 1.8 percent. For the 15-month
period October 1, 2014 through December 31, 2015, we apply an update of
1.3 percent as measured by the 4th quarter 2013 forecast of the MEI,
the most recent forecast available at the time. The adjusted base
payment that reflects the MEI historical updates and forecasted updates
to the MEI is $158.85. This payment rate incorporates a combined MEI
update factor of 1.0327 that trends dollars forward from July 1, 2012
through December 31, 2015.
Table 2--Final Base Rate per Daily Visit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated base
Average rate without MEI-Adjusted
Total estimated costs Daily payment Average cost adjustment for MEI Update base payment
encounters multiplier per daily visit price factor rate
inflation
--------------------------------------------------------------------------------------------------------------------------------------------------------
$846,058,100...................................... 5,462,670 1.0069 $154.88 $153.82 1.0327 $158.85
--------------------------------------------------------------------------------------------------------------------------------------------------------
Final MEI-adjusted base payment rate = $154.88 x (1/1.0069) x 1.0327 =
$158.85
Thus, we are finalizing a base payment rate of $158.85 per
beneficiary per day for the FQHC PPS, based on current data and the
finalized policies.
Payments to FQHCs were calculated as follows:
Base payment rate x FQHC GAF = PPS payment
In calculating the payment, the base payment rate was $158.85, and
the FQHC GAF was based on the locality of the delivery site.
If the patient is new to the FQHC, or the FQHC is furnishing an
IPPE, initial AWV, or subsequent AWV, payment would be calculated as
follows:
Base payment rate x FQHC GAF x 1.3416 = PPS payment
In calculating the payment, 1.3416 represents the risk adjustment
factor applied to the PPS payment when FQHCs furnish care to new
patients or when they furnish an IPPE, initial AWV, or subsequent AWV
(see discussion in section II.C.3. of this final rule with comment
period).
E. Implementation
1. Transition Period and Annual Adjustment
Section 1834(o)(2) of the Act requires implementation of the FQHC
PPS for FQHCs with cost reporting periods beginning on or after October
1, 2014. Cost reporting periods are typically 12 months, and usually do
not exceed 13 months. Therefore, we expect that all FQHCs would be
transitioned to the PPS by the end of 2015, or 15 months after the
October 1, 2014 implementation date.
FQHCs would transition into the PPS based on their cost reporting
periods. We noted that a change in cost reporting periods that is made
primarily to maximize payment would not be acceptable under established
cost reporting policy (see Sec. 413.24(f)(3) of the regulations and
the Provider Reimbursement Manual Part I, section 2414, and Part II,
section 102.3). The claims processing system will maintain the current
system and the PPS until all FQHCs have transitioned to the PPS.
We proposed to transition the PPS to a calendar year update for all
FQHCs, beginning January 1, 2016, because many of the PFS files we
proposed to use are updated on a calendar year basis. Section
1834(o)(2)(B)(ii)(I) of the Act requires us to adjust the FQHC PPS rate
by the percentage increase in the MEI for the first year after
implementation. However, while transitioning the PPS to a calendar
year, we proposed to defer the first MEI statutory adjustment to the
PPS rate from October 1, 2015 to December 31, 2016, because the
proposed base payment rate incorporates a forecasted percentage
increase in the MEI through December 31, 2015.
Comment: Many commenters requested that FQHCs be permitted to
transition into the FQHC PPS beginning on October 1, 2014, even if that
is not the beginning of their cost reporting period.
Response: As we stated in the proposed rule, a change in cost
reporting periods that is made primarily
[[Page 25456]]
to maximize payment would not be acceptable under established cost
reporting policy. This principle has been applied uniformly to the
implementation of all new prospective payment systems in Medicare. The
MACs do not have the discretion to transition a FQHC at a time other
than their cost reporting period except when a FQHC has a change of
ownership resulting in a different cost reporting period, or otherwise
has good cause. Good cause is not met if it is determined that the
reason is to maximize reimbursement.
Comment: Many commenters requested that we create a FQHC-specific
market basket beginning in 2016 for the annual update to the PPS rate.
These commenters opined that a FQHC-specific market basket would more
accurately reflect the actual costs of FQHC services than using the
MEI. A commenter requested that the FQHC market basket take into
account changes in the scope of services that FQHC furnish.
Response: We will continue to assess the feasibility of developing
a FQHC-specific market basket and will provide notification of our
intentions in subsequent rulemaking.
We did not receive any comments on our proposal to transition the
PPS to a calendar year update for all FQHCs, beginning January 1, 2016.
Therefore, we are finalizing this provision as proposed.
2. Medicare Claims Payment
We noted that claims processing systems would need to be revised
through program instruction to accommodate the new rate and associated
adjustments. Medicare currently pays 80 percent of the AIR for all FQHC
claims, except for mental health services that are subject to the
mental health payment limit. Section 1833(a)(1)(Z) of the Act requires
that Medicare payment under the FQHC PPS shall be 80 percent of the
lesser of the provider's actual charge or the PPS rate. In the proposed
rule, we stated that we were considering several revisions to the
claims processing system. These include revisions to reject claims in
which the qualifying visit described a service that is outside of the
FQHC benefit, such as inpatient hospital E/M services or group sessions
of DSMT/MNT; revisions to reject line items for technical components
such as x-rays, laboratory tests, and durable medical equipment which
will not be paid as part of the FQHC PPS and would be billed separately
to Medicare Part B; and revisions to allow for the informational
reporting of influenza and pneumococcal vaccines and their
administration, while excluding the line item charges, as these items
would continue to be paid through the cost report.
Comment: Commenters identified the ``lesser of'' provision in
section 1833(a)(1)(Z) of the Act as their most significant concern with
the proposed rule. This provision requires that Medicare payment for
FQHC services furnished under the PPS to equal ``80 percent of the
lesser of the actual charge or the amount determined under'' section
1834(o) of the Act. Many commenters were concerned that paying FQHCs
the lesser of the actual charge or the PPS rate will routinely underpay
FQHCs and undermine the purpose of the PPS. These commenters believe
the PPS would be inappropriately comparing a per diem rate for a
typical bundle of services with a charge or sum of charges for
individual services. Some FQHCs also claim that they keep their charges
low across all payers because they serve an underserved population,
which will cap their Medicare FQHC payments at these low charge rates.
Commenters recommended that if the ``lesser of'' provision must be
implemented, it would be more appropriate for Medicare to compare the
PPS rate to the FQHC's average charge per visit from the prior year,
trended forward by the MEI or a FQHC-specific inflationary factor.
Response: We appreciate the information and perspectives provided
by the commenters and will address each of these points individually.
Comment: Commenters opined that CMS lack the statutory authority to
implement the ``lesser of'' provision because section 1833(a)(1) of the
Act generally excludes FQHC services, and that even if we determine
that CMS has the authority to apply the ``lesser of'' provision, the
statutory deficiencies would allow CMS to be flexible in implementing
this provision.
Response: We respectfully disagree with commenters that the
statutory basis of the ``lesser of'' provision is not clear. We find
the language in section 1833(a)(1)(Z) of the Act, which states ``with
respect to Federally qualified health center services for which payment
is made under section 1834(o) of the Act, the amounts paid shall be 80
percent of the lesser of the actual charge or the amount determined
under such section'' to be clear, and we believe that placement of this
provision in section 1833(a)(1) of the Act does not undermine its
authority.
Comment: Commenters noted that due to the ``lesser of'' provision,
initial payments under the PPS would be less than 100 percent of the
estimated amount of reasonable costs, and this does not meet the budget
neutrality requirement in the Affordable Care Act.
Response: We respectfully disagree with commenters that we should
have factored the ``lesser of'' provision into our budget neutrality
calculations. Section 1834(o)(2)(B)(i) of the Act requires us to
calculate a PPS rate that, when multiplied by our estimates of
services, will yield 100 percent of estimated reasonable costs.
Although we must apply the ``lesser of'' provision in section
1833(a)(1)(Z) of the Act when paying FQHCs under the PPS, section
1834(o)(2)(B)(i) of the Act specifies that the estimated aggregate
amount of prospective payment rates is to be determined prior to the
application of section 1833(a)(1)(Z) of the Act.
Comment: Commenters asserted that CMS did not provide sufficient
information about the ``lesser of'' provision in the proposed rule,
such as defining the term ``charge'' or providing an analysis of the
effect of the ``lesser of'' provision on FQHC payments under the PPS.
Commenters urged CMS to clarify implementation details in the final
rule and to give the public another opportunity to comment after
publishing this information. Commenters requested that CMS grant a 2-
to 3-year moratorium on the ``lesser of'' provision, while beginning to
pay the PPS rates as of October 1, 2014.
Response: We believe the statutory language in section
1833(a)(1)(Z) of the Act requiring a comparison with the provider's
``actual charge'' is straightforward. Moreover, the regulatory
principles of reasonable cost reimbursement in Sec. 413.53(b) already
defines ``charges'' as ``the regular rates for various services that
are charged to both beneficiaries and other paying patients who receive
the services.'' We did not include all the implementation details in
the proposed rule because claims processing instructions are not
typically subject to regulatory notice and comment.
The proposed rule modeled the impact of the PPS using the estimated
PPS rate, and did not model the overall impact of the ``lesser of''
provision because FQHCs control their own pricing structures, and we
have limited information to accurately project actual FQHC charges.
Therefore, we believe it would have been inappropriate to publish an
analysis demonstrating the impact of the ``lesser of'' provision.
Comment: Some commenters claimed that FQHCs keep their charges low
across all payers because they serve an underserved population. A few
commenters asserted that the costs of
[[Page 25457]]
integrated care furnished to beneficiaries are not adequately reflected
in the HCPCS codes and charges billed to Medicare. Commenters were
concerned that, in order to receive the higher payments under the PPS,
FQHCs would be forced to raise their charges, which would increase the
coinsurance liability for patients who do not qualify for a sliding fee
schedule discount.
Response: Most FQHCs are subject to the requirements in the section
330(k)(3)(G) of the PHS Act, which states that FQHCs prepare ``a
schedule of fees or payments for the provision of its services
consistent with locally prevailing rates or charges and designed to
cover its reasonable costs of operation and has prepared a
corresponding schedule of discounts to be applied to the payment of
such fees or payments, which discounts are adjusted on the basis of the
patient's ability to pay.''
FQHCs can adjust their charges within the broad parameters
established by the PHS Act and HRSA guidance, and the application of a
sliding fee scale can subsidize an eligible patient's out-of-pocket
liability. The commenter is correct that coinsurance liability
generally increases when charges increase, and that this is a
consideration for FQHCs when setting charges. We also note that, under
certain circumstances, FQHCs may waive coinsurance amounts for Medicare
and Medicaid beneficiaries (see for example, section 1128B(b)(3)(D) of
the Act and Sec. 1001.952(k)(2) of the regulations). Also, most FQHCs
are subject to the statutory and regulatory requirements of the Health
Center Program (section 330 of the PHS Act; 42 CFR Part 51c; and 42 CFR
56.201 through 56.604), which, among other requirements, mandates that
they may collect no more than a ``nominal fee'' from individuals whose
annual income is at or below 100 percent of the Federal Poverty Level.
Comment: A few commenters recommended that we apply the ``lesser
of'' provision at the aggregate level through an annual reconciliation
on the Medicare cost report of aggregate payments with aggregate
charges. These commenters noted that this aggregate approach averages
out lower charges for low intensity services with higher charges for
high intensity services. Some commenters suggested that we conduct an
annual reconciliation on the Medicare cost report to determine whether
aggregate PPS payments exceeded or fell short of aggregate allowable
costs, using costs as a proxy for actual charges.
Response: We believe that the statutory language in section
1833(a)(1)(Z) of the Act requiring a comparison with the provider's
``actual charge'' is straightforward, and a comparison of aggregate
payments with aggregate charges would be inconsistent with the plain
reading of the statutory language that implies a claims level
comparison. We also were not persuaded that costs are a reasonable
proxy for charges. We note that in general, a Medicare PPS is a method
of paying providers based on a predetermined, fixed amount that is not
subject to annual reconciliation. Payments under a Medicare PPS for
other provider types are not subject to annual reconciliation with a
provider's charge, and an annual reconciliation of costs for providers
paid under a Medicare PPS is generally limited to amounts paid outside
the applicable PPS.
Comment: Many commenters believe that the proposed PPS would
inappropriately compare a per diem rate for a typical bundle of
services with a charge or sum of charges for individual services
furnished on the same day, which commenters described as an ``apples to
oranges'' comparison. Commenters asserted that comparing the bundled
rate to the sum of individual charges would routinely yield
underpayment and make it difficult for FQHCs to meet their obligation
under section 330 of the PHS Act that requires health centers to
collect adequate payment from government programs, including Medicare.
Commenters recommended that if the ``lesser of'' provision must be
implemented, it would be more appropriate for CMS to implement the
``lesser of'' provision in a way that ensures parity between the
rate(s) and charges to which they are compared. Commenters suggested
that CMS compare the PPS rate to the FQHC's average charge per visit,
as determined on an annual basis and trended forward by an applicable
inflation factor (for example, the MEI or a FQHC-specific inflationary
index).
A commenter suggested that FQHCs should be allowed to bill all-
inclusive rate charges under the FQHC PPS. This commenter noted that
the proposed PPS rate is based on cost report data that are not
adequately reflected in the HCPCS codes and charges billed to Medicare,
and the commenter believes it would be appropriate for FQHCs to bill an
all-inclusive rate. The commenter suggested that it would be
appropriate for FQHCs to set the charge for a Medicare visit at the
higher of its Medicare or Medicaid PPS rate to avoid a reimbursement
loss from application of the ``lesser of'' provision. This commenter
also suggested that ancillary services should be billed and paid by
Medicare over and above the all-inclusive PPS rates.
Response: Most Medicare payment systems that have a ``lesser of''
provision in section 1833(a)(1) of the Act are paid on a fee basis for
each item or service. While unbundling the PPS rate to pay separately
for individual services would address the ``apples-to-oranges''
concern, we note that most of the commenters recommending that we
compare the PPS rate with the FQHC's average charge also supported our
proposal to offer a single, bundled, encounter-based rate for payment
with some adjustments, as discussed earlier. We believe that the
proposed FQHC PPS encounter-based rate, which would be similar across
all encounters, is a significantly different payment structure than
other payment systems subject to a ``lesser of'' comparison with actual
charges. We acknowledge that a comparison of a service-specific charge
to an encounter-based payment does not apply the ``apples-to-apples''
comparisons of similar ``lesser of'' provisions included in section
1833(a)(1) of the Act.
We considered modifying our proposal and adopting the
recommendation of many commenters to pay FQHCs based on the lesser of
the FQHC's average Medicare charge per diem or the PPS rate. We agree
that such an approach would be responsive to commenters seeking parity
in the comparison between the bundled PPS rate and the charges.
However, we believe that the statutory language in section
1833(a)(1)(Z) of the Act requiring a comparison with the provider's
``actual charge'' is straightforward, and a comparison with the FQHC's
average charge from a prior period would be inconsistent with the plain
reading of the statutory language.
We believe we can be responsive to commenters seeking parity in the
comparison between the bundled PPS rate and the charges, while allowing
direct interpretation of the statutory requirements of section
1833(a)(1)(Z) of the Act, by establishing a new set of HCPCS G-codes
for FQHCs to report an established Medicare patient visit, a new or
initial patient visit and an IPPE or AWV. As authorized by section
1834(o)(2)(C) of the Act, we shall establish and implement by program
instruction the payment codes to be used under the FQHC PPS. We would
define these G-codes in program instruction to describe a FQHC visit in
accordance with the regulatory definitions of a Medicare FQHC visit.
Each FQHC would establish a charge to
[[Page 25458]]
the beneficiary with which to bill Medicare for the encounters.
Consistent with longstanding policy, the use of these payment codes
does not dictate to providers how to set their charges. A FQHC would
set the charge for a specific payment code pursuant to its own
determination of what would be appropriate for the services normally
provided and the population served at that FQHC, based on the
description of services associated with the G-code. The charge for a
specific payment code would reflect the sum of regular rates charged to
both beneficiaries and other paying patients for a typical bundle of
services that would be furnished per diem to a Medicare beneficiary. We
would continue to require detailed HCPCS coding with the associated
line item charges for data gathering (for example, providing
information about the ancillary services furnished), to support the
application of adjustments for new patients, IPPE, and AWV, and to
facilitate the waiving of coinsurance for preventive services.
FQHCs will be required to use these payment codes when billing
Medicare under the PPS. Medicare would pay FQHCs based on 80 percent of
the lesser of the actual charge reported for the specific payment code
or the PPS rate on each claim (and beneficiary coinsurance would be 20
percent of the lesser of the actual charge for the G-code or the PPS
rate), which allows for direct interpretation of the statute by
comparing the PPS rate to the FQHC's actual charge for a Medicare
visit. In order to ease administrative burden and in compliance with
Sec. 413.53, the FQHC may choose to use these specific payment codes
for its entire patient base. We acknowledge that other payors may have
requirements that would preclude FQHCs from using these payment codes,
and we suggest that FQHCs be mindful of the differences in required
billing methodologies and coding conventions when submitting claims to
other payors.
Although we did not propose to establish HCPCS G-codes for FQHCs to
report and bill for Medicare visits, we believe that comparing the PPS
per diem rate to a FQHC's charge for a per diem visit (as defined by
the specific payment codes) would be responsive to commenters seeking
parity in the comparison between the bundled rate and the charges, and
would also be responsive to commenters concerns regarding meeting the
requirements of section 330(k)(3)(F) of the PHS Act, which requires
section 330 grantees to make every reasonable effort to collect
appropriate reimbursement for its costs in providing health services
from government programs, including Medicare. Establishment of these G-
codes would also be responsive to the commenter that suggested that
FQHCs should be allowed to bill all-inclusive rate charges under the
FQHC PPS. Since the G-codes would describe FQHC visits as a per diem,
encounter-based visit in accordance with Medicare regulations, we also
note that the charges established for these Medicare visits might not
directly affect the charges for non-Medicare patients.
In setting its charges for these Medicare FQHC visits, a FQHC would
have to comply with established cost reporting rules in Sec. 413.53
which specify that charges must reflect the regular rates for various
services that are charged to both beneficiaries and other paying
patients who receive the services. We anticipate that each FQHC would
establish charges for the Medicare FQHC visits that would reflect the
sum of regular rates charged to both beneficiaries and other paying
patients for a typical bundle of services that the FQHC would furnish
per diem to a Medicare beneficiary. We note that establishing Medicare
per diem rates that are substantially in excess of the usual rates
charged to other paying patients for a similar bundle of services could
be subject to section 1128(b)(6) of the Act, as codified in Sec.
1001.701.
We disagree with the commenter's suggestion that ancillary services
should be billed and paid by Medicare over and above the all-inclusive
PPS rate because the costs of these ancillary services were included in
the reasonable costs used to calculate the PPS rates.
After consideration of the public comments received, we are
finalizing our proposal and the revised regulations at Sec. 405.2462
to pay FQHCs based on the lesser of the PPS rate or the actual charge.
In response to the public comments, we will also establish HCPCS G-
codes for FQHCs to report and bill FQHC visits to Medicare under the
FQHC PPS. Appropriate billing procedures for the G codes will be made
through program instruction. As we did not propose the establishment of
G-codes in the proposed rule, nor did we receive public comments
specifically requesting such codes, we invite comments on the
establishment of G-codes for FQHCs to report and bill FQHC visits to
Medicare under the FQHC PPS.
3. Beneficiary Coinsurance
Section 1833(a)(1)(Z) of the Act requires that FQHCs be paid ``80
percent of the lesser of the actual charge or the amount determined
under such section''. Under the current reasonable cost payment system,
beneficiary coinsurance for FQHC services is assessed based on the
FQHC's charge, which can be more than coinsurance based on the AIR,
which is based on costs. An analysis of a sample of FQHC Medicare
claims data for dates of service between January 1, 2011 through June
30, 2013 indicated that beneficiary coinsurance based on 20 percent of
the FQHCs' charges was approximately $29 million higher, or 20 percent
more, than if coinsurance had been assessed based on 20 percent of the
lesser of the FQHC's charge or the applicable all-inclusive rate.
Section 1833(a)(1)(Z) of the Act requires that Medicare payment
under the FQHC PPS should be 80 percent of the lesser of the actual
charge or the PPS rate. Accordingly, we proposed that coinsurance would
be 20 percent of the lesser of the FQHC's charge or the PPS rate. We
believe that the proposal to change the method to determine coinsurance
is consistent with the statutory change to the FQHC Medicare payment
and is consistent with statutory language in sections 1866(a)(2)(A) and
1833(a)(3)(A) of the Act and elsewhere that addresses coinsurance
amounts and Medicare cost principles. If finalized as proposed, total
payment to the FQHC, including both Medicare and beneficiary liability,
would not exceed the FQHC's charge or the PPS rate (whichever was
less).
Comment: Several commenters recommended that if CMS makes changes
to the coinsurance provisions in the payment regulation at Sec.
405.2462(d) in response to comments on the ``lesser of'' provision, CMS
should make corresponding revisions to the coinsurance regulation at
Sec. 405.2410.
Response: The coinsurance provisions in Sec. 405.2462(d) and Sec.
405.2410 have been updated in this final rule with comment period.
Comment: Commenters noted that calculating the amount of
coinsurance to be charged a patient is a significant administrative
responsibility for FQHCs. Commenters were concerned that a comparison
of the PPS rate with charges at the point of service would be
administratively complex and unnecessarily burdensome for FQHCs, and
FQHCs would have difficulty calculating the beneficiary's coinsurance
liability at point of service.
Response: We respectfully disagree that FQHCs would have difficulty
calculating a beneficiary's coinsurance liability at point of service.
A FQHC will set its own charge, and we believe the charge amount is
likely to be available at point of service. We also believe that
[[Page 25459]]
FQHCs will be able to estimate the PPS rate at time of service. We
proposed to apply a FQHC GAF based on where the services are furnished,
and we proposed to adjust the encounter rate when FQHCs furnish care to
new patients or when they furnish a comprehensive initial Medicare
visit. We are finalizing our proposal to apply a FQHC GAF, and we are
modifying our proposal and will adjust the encounter rate when FQHCs
furnish new patient visits, IPPEs, or AWVs. Therefore, each delivery
site would have two geographically adjusted PPS rates for each period:
One rate for a visit furnished to a patient who is not new to the FQHC
and is not receiving an IPPE or AWV, and one rate for a new patient
visit, IPPE or AWV that is eligible for an adjustment. At the point of
service, a FQHC could determine whether its own charge or its estimate
of the applicable PPS rate (which would be one of two discrete values)
is lower, and the FQHC could estimate beneficiary coinsurance at point
of service based on 20 percent of the lesser amount. We note that the
remittance advice issued by the MAC will continue to include the
coinsurance amount and will reflect the amount of coinsurance
recognized by Medicare.
Comment: A few commenters wanted coinsurance to be based on
charges, even when the charges are higher than the PPS rate. Some also
questioned our legal authority to assess coinsurance at 20 percent of
the lesser of the charge or the PPS rate.
Response: Under the current reasonable cost payment system,
beneficiary coinsurance for FQHC services is assessed based on the
FQHC's charge, and we acknowledge that the statute makes no specific
provision to revise the coinsurance to be 20 percent of the lesser of
the FQHC's charge or the PPS rate, although it does state clearly that
CMS is limited to paying 80 percent of the FQHC's charge or the PPS
rate, whichever is less. We continue to believe that the proposal to
change the method to determine coinsurance is consistent with the
statutory change to the FQHC Medicare payment and is consistent with
statutory language in sections 1866(a)(2)(A) and 1833(a)(3)(A) of the
Act and elsewhere that addresses coinsurance amounts and Medicare cost
principles. These sections were not repealed by the Affordable Care Act
and continue to provide legal authority for FQHCs to seek coinsurance
payments from Medicare beneficiaries.
After consideration of the public comments received, we are
finalizing these provisions as proposed and revising the regulations at
Sec. 405.2462(d) and Sec. 405.2410(b)(2) that beneficiary coinsurance
for payments under the FQHC PPS would generally be 20 percent of the
lesser of the FQHC's charge or the PPS rate. We note that the proposed
revision to Sec. 405.2410(b)(1)(ii)(A) regarding the deductible and
coinsurance amount for RHCs is not being finalized as proposed as it
inadvertently changed the intent of the regulation and will therefore
remain as stated in the current regulation.
4. Waiving Coinsurance for Preventive Services
As provided by section 4104 of the Affordable Care Act, effective
January 1, 2011, Medicare waives beneficiary coinsurance for eligible
preventive services furnished by a FQHC. Medicare requires detailed
HCPCS coding on FQHC claims to ensure that coinsurance is not applied
to the line item charges for these preventive services.
For FQHC claims that include a mix of preventive and non-preventive
services, we proposed that Medicare contractors compare payment based
on the FQHC's charge to payments based on the PPS encounter rate and
pay the lesser amount. However, the current approach to waiving
coinsurance for preventive services, which relies solely on FQHC
reported charges, would be insufficient under the FQHC PPS. As Medicare
payment under the FQHC PPS is required to be 80 percent of the lesser
of the FQHCs charge or the PPS rate, we also need to determine the
coinsurance waiver for payments based on the PPS rate.
We considered using the proportion of the FQHC's line item charges
for preventive services to total claim charges to determine, as a
proxy, the proportion of the FQHC PPS rate that would not be subject to
coinsurance. This approach would preserve the encounter-based rate
while basing the coinsurance reduction on each FQHC's relative
assessment of resources for preventive services. However, the charge
structure among FQHCs varies, and beneficiary liability for the same
mix of FQHC services could differ significantly based on the
differences in charge structures.
Where preventive services are coded on a claim, we proposed to use
payments under the PFS to determine the proportional amount of
coinsurance that should be waived for payments based on the PPS
encounter rate. While Part B drugs that are physician-administered and
routine venipuncture will be paid under the FQHC PPS rate, we noted
that the Medicare Part B rates for these items are not included in the
PFS payment files. Therefore, when determining this proportionality of
payments, we proposed that we would also consider PFS payment limits
for Part B drugs, as listed in the Medicare Part B Drug Pricing File,
and the national payment amount for routine venipuncture (HCPCS 36415).
Although FQHCs might list HCPCS for which we do not publish a payment
rate in these files, a review of 2011 claims data indicated that the
vast majority of line items with HCPCS representing services that will
be paid under the FQHC PPS were priced in these sources. As such, we
believe that referencing only the payment rates listed in these sources
would be both sufficient and appropriate for determining the amount of
coinsurance to waive for preventive services furnished in FQHCs,
without changing the total payment (Medicare and coinsurance). Since
Medicare payment under the FQHC PPS is required to be 80 percent of the
lesser of the FQHC's charges or the PPS rate, we proposed that we would
continue to use FQHC-reported charges to determine the amount of
coinsurance that should be waived for payments based on the FQHC's
charge, and that total payment to the FQHC, including both Medicare and
beneficiary liability, would not exceed the lesser of the FQHC's charge
or the PPS rate.
Our proposed approach for waiving coinsurance for preventive
services preserves an encounter-based rate, and the calculation is
similar to the current coinsurance calculation based on charges. We
acknowledged that this calculation is fairly complex for the claims
processing systems and may also be difficult for providers to
replicate, and that FQHCs might not know how much coinsurance would be
assessed before the MAC issues the remittance advice.
As an alternative approach, we considered unbundling all services
when a FQHC claim includes a mix of preventive and non-preventive
services, excluding these types of claims from calculation of the FQHC
base encounter rate, and use payments under the Medicare PFS to pay
separately for every service listed on the claim. While this approach
is inconsistent with an all-inclusive payment, it would simplify
waiving coinsurance for preventive services and pay preventive services
comparably to PFS settings. However, the vast majority of FQHC claims
list only one HCPCS, and unbundling all services introduces coding
complexity that might underpay FQHCs for an encounter if they do not
code all furnished ancillary services. In addition, because the cost of
these services is generally lower that other services,
[[Page 25460]]
payment for preventive services under the PFS will be less, in many
cases, than the FQHC PPS encounter rate.
Instead of unbundling all services when a FQHC claim includes a mix
of preventive and nonpreventive services, we considered the use of PFS
payment rates to pay separately for preventive services billed on the
FQHC claim, while paying for the non-preventive services under the FQHC
PPS rate. However, this would be problematic when the preventive
services represent the service that would qualify the claim as a FQHC
encounter (for example, IPPE, AWV, MNT). Under current payment policy,
the remaining ancillary services would not be eligible for an encounter
payment without an additional, qualifying visit on the same date of
service.
We also considered using the dollar value of the coinsurance that
would be waived under the PFS to reduce the FQHC encounter-based
coinsurance amount when preventive services appear on the claim.
However, this could lead to anomalous results, such as negative
coinsurance if the preventive service(s) would have been paid more
under the PFS than the FQHC PPS rate, and the amount of coinsurance
waived under the PFS would exceed 20 percent of the FQHC PPS rate. We
also were concerned that the reduction in coinsurance would seem
insufficient if the payment rate for the preventive service(s) was very
low under the PFS.
We discussed whether using the proportionality of PFS payments to
determine the coinsurance waiver would facilitate the waiving of
coinsurance for preventive services while preserving the all-inclusive
nature of the encounter-based rate with the least billing complexity.
Therefore, we proposed that where preventive services are coded on a
claim, we would use payments under the PFS to determine the
proportional amount of coinsurance that should be waived for payments
based on the PPS encounter rate, and we invited public comment on how
this proposal would impact a FQHC's' administrative procedures and
billing practices.
Comment: Commenters noted that we did not specify that Medicare
will pay for the coinsurance waiver, and some were concerned that our
proposals to waive coinsurance for preventive services would require
FQHCs to forego 20 percent of the total payment amount. Commenters
requested that we clarify that Medicare will pay 100 percent for
preventive services, with payment for a visit with a preventive and
non-preventive component equal to the total payment less the
coinsurance assessed. Commenters also urged us to specify the rules for
waiving coinsurance in the regulations text.
Response: Under Sec. 410.152, Medicare Part B pays 100 percent of
the Medicare payment amount established under the applicable payment
methodology for the service setting. In the CY 2011 Medicare PFS final
rule (75 FR 73417 through 73419, November 29, 2010) we included a
detailed discussion regarding preventive services covered under the
FQHC benefit, and we clarified that we would apply the coinsurance
waiver in the FQHC setting. We implemented the billing requirements for
waiving coinsurance in the FQHC setting through program instruction
(CMS Pub. 100-04, Medicare Claims Processing Manual, Chapter 9, Section
120).
Our discussion and proposals in the FQHC PPS proposed rule were not
intended to change the general requirements with respect to waiving
coinsurance for preventive services in the FQHC setting. Medicare will
continue to pay 100 percent for preventive services furnished in the
FQHC setting as part of a FQHC visit. Rather, we proposed revisions to
the methodology used to waive coinsurance for preventive services to
ensure that our operational approach would be compatible with payments
under an all-inclusive FQHC PPS encounter-based system.
We agree that it would be appropriate to codify the general rules
for waiving coinsurance in the regulations text, and we will modify the
proposed regulatory text at Sec. 405.2410 and Sec. 405.2462 to
reflect existing requirements that apply the coinsurance waiver in the
FQHC setting, subject to the billing requirements of the applicable
payment methodology. However, we believe that the details of
implementation would be more appropriate to include in program
instruction, and we plan to implement the procedures for waiving
coinsurance for preventive services furnished by FQHCs as an update to
the billing requirements for preventive services.
Comment: Commenters requested that we add information to the
Medicare Claims Processing Manual clarifying the list of services to
which the coinsurance waiver requirement applies.
Response: A table of services subject to the coinsurance waiver is
available in CMS Pub. 100-04, Medicare Claims Processing Manual,
Chapter 18, Section 1.2.
Comment: Commenters were concerned that it would be too complex and
burdensome for FQHCs to calculate the coinsurance at point of service
using the proposed methodology for claims with a mix of preventive and
non-preventive services that would be paid using the PPS rate. Most
commenters requested that CMS rethink this calculation to simplify how
coinsurance would be assessed for these types of claims. Commenters
recommended that CMS completely waive coinsurance and pay 100 percent
of the PPS rate for any FQHC encounter that includes a preventive
service, whether the preventive service represented the face-to-face
portion of the visit or an ancillary service. Commenters asserted that
this would be easier to administer and more consistent with the
Congress's intent to eliminate barriers to the provision of preventive
services.
Response: While a complete coinsurance waiver for these types of
claims would be a simple approach, we do not believe that we have the
authority to waive coinsurance completely whenever a preventive service
is furnished during a FQHC encounter without regard to the value of the
preventive service relative to all other services furnished during the
same encounter.
We agree that the proposed approach is complex and might be
difficult for providers to replicate. Our own analysis subsequent to
publication of the proposed rule led us to conclude that the benefits
of the proposed methodology would be outweighed by the complexity of
the systems changes and ongoing systems interactions that would be
needed to implement the methodology as proposed.
We reconsidered the other methodologies for waiving coinsurance
presented in the proposed rule. However, we believe that these options
would also be difficult for providers to replicate at point of service.
We proposed that we would continue to use FQHC-reported charges to
determine the amount of coinsurance that should be waived for payments
based on the FQHC's charge. We believed that the current approach to
waiving coinsurance for preventive services, which relies solely on
FQHC reported charges, would be insufficient under the FQHC PPS for
payments based on the FQHC PPS rate.
In response to commenters that requested that CMS rethink this
calculation to simplify how coinsurance would be assessed for these
types of claims, we reconsidered whether the current approach to
waiving coinsurance for preventive services when payments are based on
the FQHC's charge could be adapted to payments based on the FQHC PPS
rate. After reconsideration of how coinsurance could be assessed, we
now believe that the current approach is
[[Page 25461]]
feasible and relatively simple to apply to payments based on the FQHC
PPS rate, with certain modifications.
If we were to apply the current approach of waiving coinsurance for
preventive services under the new FQHC PPS, we would subtract the
dollar value of the FQHC's reported line-item charge for the preventive
service from the full payment amount, whether payment is based on the
FQHC's charge or the PPS rate. Medicare would pay the FQHC 100 percent
of the dollar value of the FQHC's reported line-item charge for the
preventive service, up to the total payment amount. Medicare also would
pay a FQHC 80 percent of the remainder of the full payment amount, and
we would assess beneficiary coinsurance at 20 percent of the remainder
of the full payment amount. If the reported line-item charge for the
preventive service equals or exceeds the full payment amount, we would
pay 100 percent of the full payment amount and the beneficiary would
not be responsible for any coinsurance.
We believe that the relative simplicity of this revised methodology
is responsive to commenters that requested a simpler calculation that
would be easier to replicate at point of service, and a coinsurance
waiver based on the reported line item charges will be more transparent
to beneficiaries. We also believe that the similarity to the current
approach for waiving coinsurance for preventive services will be
simpler for Medicare claims processing systems to implement.
After consideration of the public comments received, we will not
finalize the process for calculating the coinsurance as proposed, and
instead will modify the proposed regulatory text at Sec. 405.2410 and
Sec. 405.2462 based on the comments received. Specifically, we will
use the current approach to waiving coinsurance for preventive
services, whether total payment is based on the FQHC's charge or the
PPS rate, by subtracting the dollar value of the FQHC's reported line-
item charge for the preventive services from the full payment amount.
We will issue further guidance on the billing procedures through
program instruction. We invite comments on this approach to waiving
coinsurance for preventive services based on the dollar value of the
FQHC's reported line-item charge for preventive services.
5. Cost Reporting
Under section 1815(a) of the Act, providers participating in the
Medicare program are required to submit financial and statistical
information to achieve settlement of costs relating to health care
services rendered to Medicare beneficiaries. This information is
required for determining Medicare payment for FQHC services under Part
405, Subpart X.
Currently, the Medicare cost reporting forms show the costs
incurred and the total number of visits for FQHC services during the
cost reporting period. Using this information, the MAC determines the
total payment amount due for covered services furnished to Medicare
beneficiaries. The MAC compares the total payment due with the total
payments made for services furnished during the reporting period. If
the total payment due exceeds the total payments made, the difference
is made up by a lump sum payment. If the total payment due is less than
the total payments made, the overpayment is collected.
Under the FQHC PPS, Medicare payment for FQHC services will be made
based on the lesser of a predetermined national rate or the FQHC
charge. For services included in the FQHC per diem payment, Medicare
cost reports would not be used to reconcile Medicare payments with FQHC
costs. However, the statute does not exempt FQHCs from submitting cost
reports. In addition, Medicare payments for the reasonable costs of the
influenza and pneumococcal vaccines and their administration, allowable
graduate medical education costs, and bad debts would continue to be
determined and paid through the cost report. We noted that we are
considering revisions to the cost reporting forms and instructions that
would provide us with information that would improve the quality of our
cost estimates, such as the reporting of a FQHC's overall and Medicare
specific CCR, and the types of cost data that would facilitate the
potential development of a FQHC market basket that could be used in
base payment updates after the second year of the PPS. We noted that we
are also exploring whether we have audit resources to include FQHCs in
the pool of institutional providers that are subject to periodic cost
report audits.
Comment: A commenter requested that CMS consider suspending the
required submission of annual cost reports once all FQHCs have
transitioned to the FQHC PPS.
Response: The statute does not exempt FQHCs from submitting cost
reports. In addition, we continue to need cost reports for payments to
FQHCs that are outside of the PPS, to update our cost estimates, and to
facilitate the potential development of a FQHC market basket.
6. Medicare Advantage Organizations
Section 10501(i)(3)(C) of the Affordable Care Act added section
1833(a)(3)(B)(i)(II) to the Act to require that FQHCs that contract
with MA organizations be paid at least the same amount they would have
received for the same service under the FQHC PPS. This provision
ensures FQHCs are paid at least the Medicare amount for FQHC services,
whether such amount is set by section 1833(a)(3) of the Act or section
1834(o) of the Act. Consistent with current policy, if the MA
organization contract rate is lower than the amount Medicare would
otherwise pay for FQHC services, FQHCs that contract with MA
organizations would receive a wrap-around payment from Medicare to
cover the difference (see Sec. 422.316). If the MA organization
contract rate is higher than the amount Medicare would otherwise pay
for FQHC services, there is no additional payment from Medicare. We
proposed to revise Sec. 405.2469 to reflect this provision.
Comment: A few commenters requested clarification that wrap-around
payments will be established based on the PPS rate, as modified by any
applicable adjusters, and not based on the FQHC's charge, if such
charge is less than the PPS rate.
Response: FQHCs that have a written contract with a MA organization
are paid by the MA organization at the rate that is specified in their
contract, and the rate must reflect rates for similar services
furnished outside of a FQHC setting. If the contracted rate is less
than the Medicare PPS rate, Medicare will pay the FQHC the difference,
referred to as a wrap-around payment, less any cost sharing amounts
owed by the beneficiary. The PPS rate is subject to the FQHC GAF, and
may also be adjusted for a new patient visit or if a IPPE or AWV is
furnished. The supplemental payment is only paid if the contracted rate
is less than the adjusted PPS rate.
Comment: Commenters requested that CMS issue guidance discouraging
MA plans from applying any deductible under the MA plan to FQHC
services.
Response: MA plans are not subject to section 1833(b)(4) of the Act
and therefore are not required to waive application of the Medicare
deductible to beneficiaries in FQHCs. Guidance on this topic is beyond
the scope of this final rule with comment period.
After consideration of the public comments received, we are
finalizing this provision as proposed.
[[Page 25462]]
III. Additional Proposed Changes Regarding FQHCs and RHCs
A. Rural Health Clinic Contracting
Due to the difficulty in recruiting and retaining physicians in
rural areas, RHCs have had the option of using physicians who are
either RHC employees or contractors. However, in order to promote
stability and continuity of care, the Rural Health Clinic Services Act
of 1977 required RHCs to employ a nurse practitioner (NP) or physician
assistant (PA) (section 1861(aa)(2)(iii) of the Act). We have
interpreted the term ``employ'' to mean that the employer issues a W-2
form to the employee. Section 405.2468(b)(1) currently states that RHCs
are not paid for services furnished by contracted individuals other
than physicians, and Sec. 491.8(a)(3) does not authorize RHCs to
contract with RHC practitioners other than physicians.
In the more than 30 years since this legislation was enacted, the
health care environment has changed dramatically, and RHCs have
requested that they be allowed to enter into contractual agreements
with non-physician RHC practitioners as well as physicians. To provide
RHCs with greater flexibility in meeting their staffing requirements,
we proposed to revise Sec. 405.2468(b)(1) by removing the
parenthetical ``RHCs are not paid for services furnished by contracted
individuals other than physicians, '' and revising Sec. 491.8(a)(3) to
allow non-physician practitioners to furnish services under contract in
RHCs, when at least one NP or PA is employed.
The ability to contract with NPs, PAs, CNMs, CP, and CSWs would
provide RHCs with additional flexibility with respect to recruiting and
retaining non-physician practitioners. Practitioners should be employed
or contracted to the RHC in a manner that enhances continuity and
quality of care.
RHCs would still be required, under section 1861(aa)(2)(iii) of the
Act, to employ a PA or NP. However, as long as there is at least one NP
or PA employed at all times (subject to the waiver provision for
existing RHCs set forth at section 1861(aa)(7) of the Act), a RHC would
be free to enter into contracts with other NPs, PAs, CNM, CPs or CSWs.
We received approximately 14 comments from individuals, hospitals,
rural health clinics, national associations, and tribal organizations
on this proposal. Commenters agreed that this would provide RHCs with
additional flexibility and improve access to care. Some commenters also
noted that this would reduce certain costs.
Comment: A commenter requested that CMS allow all PAs and NPs who
work at a RHC to do so as contractors to allow maximum flexibility in
the clinic's staffing operations.
Response: As previously noted, section 1861(aa)(2)(iii) of the Act
requires RHCs to employ at least one NP or PA. We do not have the
authority to remove this requirement. However, we note that as long as
the statutory requirement that at least one NP or PA is employed is
met, the RHC can contract with other NPs or PAs.
Comment: A commenter recommended that we interpret the word
``employ'' to mean ``utilize, use, or engage the services of'' so that
independent contractors could meet the statutory requirement that at
least one NP or PA be employed.
Response: We appreciate the suggestion but since we did not propose
to change our interpretation of the word ``employ'', this comment is
beyond the scope of this rule. We note however, that as of the
effective date of this provision of this final rule with comment
period, only one PA or NP will be required to be in a W-2 relationship
with the RHC, and that all other RHC practitioners can be either
employees or contractors.
After consideration of the public comments received, we are
finalizing this provision as proposed.
B. Technical and Conforming Changes
1. Proposed Technical and Conforming Changes
In addition to proposing to codify the statutory requirements for
the FQHC PPS and to allow RHCs to contract with non-physician
practitioners, we proposed edits to correct terminology, clarify
policy, and make conforming changes for existing mandates and the new
PPS. Some of the proposed changes include the following:
Removing the terms ``fiscal intermediary and carriers''
and replacing them with ``Medicare Administrative Contractor'' or
``MAC''. Section 911 of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 established the MACs to administer the
work that was done by fiscal intermediaries and carriers in
administering Medicare programs.
Removing the payment limitations for treatment of mental
psychoneurotic or personality disorders. This payment limitation is
being phased out and will no longer be in effect beginning January 1,
2014.
Updating the regulations to reflect section 410 of the
Medicare Modernization Act of 2003 to exclude RHC and FQHC services
furnished by physicians and certain other specified types of
nonphysician practitioners from consolidated billing under section
1888(e)(2)(A)(ii) of the Act and allows such services to be separately
billable under Part B when furnished to a resident of a SNF during a
covered Part A stay (see the July 30, 2004 final rule (69 FR 45818
through 45819). This statutory provision was effective with services
furnished on or after January 1, 2005 and was previously implemented
through program instruction (CMS Pub 100-04, Medicare Claims Processing
Manual, Chapter 6, Section 20.1.1).
We did not receive any comments on these technical proposals and we
are finalizing these provisions as proposed.
2. Additional Technical and Conforming Changes
We did not propose the following changes, but based on our review
of the rule, we make the following clarifying and editorial changes:
Updating Sec. 405.501 and Sec. 410.152 to clarify that
this provision on the determination of reasonable charges continues to
apply to FQHCs that are authorized to bill under the reasonable cost
payment system, and does not apply to FQHCs that are authorized to bill
under the PPS.
Updating Sec. 410.152 to clarify that this provision
continues to apply to FQHCs that are authorized to bill under the
reasonable cost payment system, and does not apply to FQHCs that are
authorized to bill under the PPS.
Updating Sec. 405.2468 (f)(4) to reflect the change in
name from ``Medicare + Choice'' organization to ``Medicare Advantage''
organization.
Updated Sec. 405.2415(a)(2) and (b) to clarify that these
provisions apply to FQHCs.
Updated Sec. 405.2404(b) to make the references to the
Secretary gender neutral.
C. Comments Outside of the Scope of the Proposed Rule
Comment: Many commenters requested that all FQHCs be assigned to
one MAC instead of each FQHC being assigned to a MAC based on their
geographic location. Commenters believe that assigning FQHCs to
multiple MACS results in confusion and inconsistency as each MAC can
issue different instructions concerning the FQHC benefit and associated
billing requirements.
Response: Section 421.404 describes how FQHCs as well as other
providers
[[Page 25463]]
and suppliers are assigned to a MAC; changes to the MAC assignments are
beyond the scope of this rule.
Comment: A few commenters requested that CMS revise the definition
of telehealth so that FQHCs could be distant site providers of
telehealth services.
Response: Distant site providers of telehealth services are defined
in section 1834(m) of the Act. We made no provision relating to
telehealth and this topic is beyond the scope of this rule.
Comment: A commenter requested that PAs be allowed to individually
enroll as Medicare and Medicaid providers and bill for their services.
Response: Section 1842(b) of the Act prohibits PAs from directly
billing Medicare. This topic is beyond the scope of this rule.
Comment: A commenter requested that CMS mandate that states pay
FQHCs their full Medicaid encounter rate for any Medicare-Medicaid
enrollees.
Response: This is currently a state option and this topic is beyond
the scope of this rule.
IV. Clinical Laboratory Improvement Amendments of 1988 (CLIA)--
Enforcement Actions for Proficiency Testing Referral
A. Background
On October 31, 1988, the Congress enacted the Clinical Laboratory
Improvement Amendments of 1988 (CLIA), Public Law 100-578. The purpose
of CLIA is to ensure the accuracy and reliability of laboratory testing
for all Americans. Under this authority, which was codified at 42
U.S.C. 263a, the Secretary issued regulations implementing CLIA (see 42
CFR part 493) on February 28, 1992 (57 FR 7002). The regulations
specify the standards and specific conditions that must be met to
achieve and maintain CLIA certification. CLIA certification is required
for all laboratories, including but not limited to those that
participate in Medicare and Medicaid, which test human specimens for
the purpose of providing information for the diagnosis, prevention, or
treatment of any disease or impairment, or the assessment of health, of
human beings.
The regulations require laboratories conducting moderate or high-
complexity testing to enroll in an HHS-approved PT program that covers
all of the specialties and subspecialties for which the laboratory is
certified and all analyses listed in part 493 Subpart I. As of June
2013, there were 239,922 CLIA-certified laboratories. Of these
laboratories, 35,035 are required to enroll in an HHS-approved PT
program and are subject to all PT regulations.
Congress emphasized the importance of PT when it drafted the CLIA
legislation. For example, in discussing their motivation in enacting
CLIA, the Committee on Energy and Commerce noted that it ``focused
particularly on proficiency testing because it is considered one of the
best measures of laboratory performance'' and that proficiency testing
``is arguably the most important measure, since it reviews actual test
results rather than merely gauging the potential for good results.''
(See H.R. Rept. 100-899, at 15 (1988).) The Committee surmised that,
left to their own devices, some laboratories would be inclined to treat
PT samples differently than their patient specimens, as they would know
that the laboratory would be judged based on its performance in
analyzing those samples. For example, such laboratories might be
expected to perform repeated tests on the PT sample, use more highly
qualified personnel than are routinely used for such testing, or send
the samples out to another laboratory for analysis. As such practices
would undermine the purpose of PT, the Committee noted that the CLIA
statute was drafted to bar laboratories from such practices, and to
impose significant penalties on those who elect to violate those bars
(H.R. Rept. 100-899, at 16 and 24 (1988)).
PT is a valuable tool the laboratory can use to verify the accuracy
and reliability of its testing. During PT, an HHS-approved PT program
sends samples to be tested by a laboratory on a scheduled basis. After
testing the PT samples, the laboratory reports its results back to the
PT program for scoring. Review and analyses of PT reports by the
laboratory director will alert the director to areas of testing that
are not performing as expected and may also indicate subtle shifts or
trends that, over time, could affect patient results. As there is no
on-site, external proctor for PT testing in a laboratory, the testing
relies in large part on an honor system. The PT program places heavy
reliance on each laboratory and laboratory director to self-police
their analyses of PT samples to ensure that the testing is performed in
accordance with the CLIA requirements. For each PT event, laboratories
are required to attest that PT samples are tested in the same manner as
patient specimens are tested. PT samples are to be assessed by
integrating them into the laboratory's routine patient workload, and
the testing itself is to be conducted by the personnel who routinely
perform such testing, using the laboratory's routine methods. The
laboratory is barred from engaging in inter-laboratory communication
pertaining to results prior to the PT program's event cut-off date and
must not send the PT samples or any portion of the PT samples to
another laboratory for testing, even if it would normally send a
patient specimen to another laboratory for testing.
Any laboratory that intentionally refers its PT samples to another
laboratory for analysis risks having its certification revoked for at
least 1 year, in which case, any owner or operator of the laboratory
risks being prohibited from owning or operating another laboratory for
2 years (Sec. 493.1840(a)(8) and (b)). The phrase ``intentionally
referred'' has not been defined by the statute or regulations, but we
have consistently interpreted this phrase from the onset of the program
to mean general intent, as in intention to act. Whether or not acts are
authorized or even known by the laboratory's management, a laboratory
is responsible for the acts of its employees. Among other things,
laboratories need to have procedures in place and train employees on
those procedures to prevent staff from forwarding PT samples to other
laboratories even in instances in which they would normally forward a
patient specimen for testing.
In the February 7, 2013 Federal Register (78 FR 9216), we published
a proposed rule titled Part II--Regulatory Provisions to Promote
Program Efficiency, Transparency, and Burden Reduction (hereafter
referred to as the ``Burden Reduction proposed rule'') to propose
reforms to the Medicare and CLIA regulations that we had identified as
unnecessary, obsolete or excessively burdensome. In that rule, we
proposed changes to the CLIA PT regulations to establish policies under
which certain PT referrals by laboratories would generally not be
subject to revocation of their CLIA certificate or a 2-year prohibition
on laboratory ownership or operation. To do this, we proposed a narrow
exception in our longstanding interpretation of what constitutes an
``intentional'' PT referral.
While that proposed rule was under development but before its
publication, the Congress enacted the Taking Essential Steps for
Testing Act of 2012 (Pub. L. 112-202, (TEST Act) on December 4, 2012.
The TEST Act amended section 353 of the PHS Act to provide the
Secretary with discretion as to which sanctions she would apply to
cases of intentional PT referral.
In the February 7, 2013 Burden Reduction proposed rule (78 FR
9216), we stated that we would address the
[[Page 25464]]
TEST Act in future rulemaking, except that to comply with the TEST Act
and begin to align the CLIA regulations with the amended CLIA statute,
we proposed to revise the second sentence of Sec. 493.801(b)(4) to
state that a laboratory may (as opposed to ``must'') have its CLIA
certification revoked when we determine PT samples were intentionally
referred to another laboratory.
Subsequently, in the September 23, 2013 (78 FR 58386) proposed rule
addressing the FQHC PPS and other topics, we proposed additional
changes to the CLIA regulations to implement the TEST Act.
The regulatory changes in this final rule with comment period will
add the remaining policies and regulatory changes needed to fully
implement the TEST Act.
B. Proposed and Final Regulatory Changes
As noted earlier, the TEST Act provided the Secretary with the
discretion to substitute intermediate sanctions in lieu of the 2-year
prohibition on the owner and operator when a CLIA certificate is
revoked due to intentional PT referral, and to consider imposing
alternative sanctions in lieu of revocation in such cases as well. The
TEST Act provides the Secretary with the opportunity to frame policies
that will achieve a better correlation between the nature and extent of
intentional PT referrals at a given laboratory, and the scope and type
of sanctions or corrective actions that are imposed on that laboratory
and its owners and operators, as well as any consequences to other
laboratories owned or operated by those owners and operators.
As discussed later in this section, we are finalizing the
regulatory changes proposed in the September 23, 2013 proposed rule,
which will divide the sanctions for PT referral into three categories
based on severity and extent of the referrals. The first category is
for the most egregious violations, encompassing cases of repeat PT
referral or cases where a laboratory reports another laboratory's test
results as its own. In such cases, we do not believe that alternative
sanctions alone would be appropriate. Therefore, we proposed to revoke
the CLIA certificate for at least 1 year, ban the owner and operator
from owning or operating a CLIA-certified laboratory for at least 1
year, and possibly impose a civil monetary penalty (CMP).
In keeping with the February 7, 2013 proposed rule (78 FR 9216), we
proposed to define, at Sec. 493.2, a ``repeat proficiency testing
referral'' as ``a second instance in which a proficiency testing
sample, or a portion of a sample, is referred, for any reason, to
another laboratory for analysis prior to the laboratory's proficiency
testing program event cut-off date within the period of time
encompassing the two prior survey cycles (including initial
certification, recertification, or the equivalent for laboratories
surveyed by an approved accreditation organization).''
We believe that a repeat PT referral warrants revocation of a
laboratory's CLIA certificate for at least 1 year because such
laboratories have already been given opportunity to review their
policies, correct their deficiencies, adhere to regulation and to the
laboratory's established policy, and ensure effective training of their
personnel. As there is no on-site, external proctor for PT testing in a
laboratory, the testing relies in large part on an honor system.
Therefore, when a PT referral has previously occurred prior to the
event cut-off date within the two prior survey cycles, we do not
believe that laboratories should be given additional opportunities to
ensure that they are meeting the CLIA PT requirements and believe that
revocation of the CLIA certificate should consequently occur. We also
proposed, in the first category, that the CLIA certificate be revoked,
and the owner and operator banned from owning or operating a CLIA-
certified laboratory for at least 1 year, in cases where the PT sample
was referred to another laboratory, the referring laboratory received
the results from the other laboratory, and the referring laboratory
reported to the PT program the other laboratory's results on or before
the event cut-off date. We noted that PT programs place heavy reliance
on each laboratory and laboratory director's ability to self-police the
laboratory's analysis of PT samples to ensure that the testing is
performed in accordance with the CLIA requirements. PT scores must
reflect an individual laboratory's performance-reporting results from
another laboratory is deceptive to the public. These are the most
egregious forms of PT referral and merit the most severe sanctions.
For example, a laboratory may have two distinct sites, Laboratory A
and Laboratory B, that operate under different CLIA numbers, where
Laboratory A has received PT samples to be tested as part of its
enrollment in PT as required by the CLIA regulations. If Laboratory A
were to refer PT samples to Laboratory B, receive test results back at
Laboratory A from Laboratory B prior to the event cutoff date, and
report to the PT program those results obtained from Laboratory B, the
scores for the PT event would not reflect the performance of Laboratory
A, but rather the performance of Laboratory B. Since the PT scores
would actually be reflective of the accuracy and reliability at
Laboratory B rather than A, the purpose of the PT would be undermined.
Further, as stated in the CLIA regulations at Sec. 493.801(a)(4)(ii),
the laboratory must make PT results available to the public. In this
scenario, any member of the public who sought to use the reported PT
scores to select a high-quality laboratory would be deceived by the
scores for the results submitted to the PT program, as they would
expect that they were provided information about the performance of
Laboratory A when that would not be the case.
In cases of PT referral where the CLIA certificate is revoked, the
TEST Act provides the Secretary with discretion to ban the owner and
operator from owning or operating a CLIA-certified laboratory for up to
2 years. Prior to the TEST Act, revocation of a CLIA certificate for a
PT violation always triggered a 2-year ban on the owner and operator.
Given the severity of violations involving repeat PT referrals or the
reporting of another laboratory's results, we proposed that the
laboratory owner and operator would be banned from owning or operating
a CLIA-certified laboratory for at least 1 year for any violation
within this first category of sanctions.
We also proposed a second category of sanctions under which the
CLIA certificate would be suspended or limited (rather than revoked),
in combination with the imposition of alternative sanctions. We
proposed to use this approach in those instances in which a laboratory
refers PT samples to a laboratory that operates under a different CLIA
number before the PT event close date and, while the laboratory reports
its own results to the PT program, it receives results from the second
laboratory prior to the event close date. Such a referral situation
would allow the referring laboratory an opportunity to confirm, check,
or change its results prior to reporting its results to the PT program.
If, upon investigation, surveyors determine that the referral does not
constitute a repeat PT referral, we proposed to suspend or limit the
CLIA certificate for less than 1 year rather than revoke the CLIA
certificate, and proposed that we also impose alternative sanctions (as
an alternative to revocation of the CLIA certificate). Further, an
alternative
[[Page 25465]]
sanction would always include required training of staff.
A suspension of the CLIA certificate means that no testing of human
specimens for health care purposes may be performed by that laboratory
during the period of suspension. In such cases, the owner or operator
typically contracts out for laboratory services, or contracts with
another operator to operate the laboratory under the contracted
laboratory's CLIA certificate. In contrast to revocation of the CLIA
certificate and its accompanying ban on the owner and operator,
suspension usually applies only to the individual laboratory in
question rather than all laboratories that are under the control of the
owner or operator.
A limitation of the CLIA certificate means that the laboratory is
not permitted to perform testing or to bill Medicare or Medicaid for
laboratory work in the specialty or subspecialty that has been limited,
but may continue to conduct all other testing under its own CLIA
certificate.
In determining whether to suspend or limit the CLIA certificate, we
proposed to apply the criteria of Sec. 493.1804(d). For example, we
would examine the extent of the PT referral practice as well as its
duration. If surveyors determine that, in the previous two survey
cycles, there were prior PT referrals that occurred but were not cited
by CMS, then the CLIA certificate would always be suspended rather than
just limited. The duration of the suspension would reflect the number
of samples referred, the period of time the referrals had been
occurring, the extent of the practice, and other criteria specified at
Sec. 493.1804(d).
Further, for cases in the second category, we proposed that when
the certificate is suspended or limited, alternative sanctions would be
applied in addition to the principal sanctions of suspension or
limitation. We proposed that, at a minimum, the alternative sanctions
would include a CMP to be determined using the criteria set forth in
Sec. 493.1834, as well as a directed plan of correction. Additionally,
if the CLIA certificate is suspended, we proposed to also impose state
on-site monitoring of the laboratory.
A third category of sanctions was proposed for those PT referral
scenarios in which the referring laboratory does not receive test
results prior to the event cut-off date from another laboratory as a
result of the PT referral. We proposed that in such scenarios, at a
minimum, the laboratory would always be required to pay a CMP as
calculated using the criteria set forth in Sec. 493.1834, as well as
comply with a directed plan of correction. A directed plan of
correction would always include training of staff.
For example, a laboratory may place PT samples in an area where
other patient specimens are picked up by courier to take to a reference
laboratory. The reference laboratory courier may take the PT samples
along with the patients' specimens. The laboratory personnel notice
that the PT samples are missing and contact the reference laboratory to
inquire if they have received the PT samples along with the patients'
specimens. The reference laboratory is instructed to discard the PT
samples and not test them since they were picked up in error. In this
case, the ``referring'' laboratory realized the error, contacted the
receiving laboratory, and did not receive results back for any of the
PT samples. In this scenario, we proposed to impose only alternative
sanctions. In determining whether to impose particular alternative
sanctions, we proposed to rely on the existing considerations at Sec.
493.1804(c) and (d), Sec. 493.1806(c), Sec. 493.1807(b), Sec.
493.1809 and, in the case of civil money penalties, Sec. 493.1834(d).
These current regulations have proven effective as enforcement measures
over time for CLIA noncompliance for all circumstances other than PT
referral. Therefore, we expressed our belief that these same criteria
will be effective in the imposition of alternative sanctions for PT
referral cases.
In summary, we proposed to amend Sec. 493.1840 by revising
paragraph (b) to specify three categories for the imposition of
sanctions for PT referrals. We believed that these provisions, as
amended, would provide the necessary detail to fairly and uniformly
apply the discretion granted to the Secretary under the TEST Act,
without being so specific as to defeat the intent to provide
appropriate flexibility when taking punitive or remedial action in the
context of a PT referral finding.
We also proposed to make three conforming changes to the CLIA
regulations at the authority citation for Sec. 493 and at Sec. 493.1
and Sec. 493.1800(a)(2) to include references to the PHS Act as
amended by the TEST Act.
We received 14 timely public comments on the proposed changes to
the CLIA regulations to implement the enforcement discretion for PT
referral cases as provided by the TEST Act. The comments came from a
variety of sources, including laboratory accreditation organizations,
laboratory professional organizations, medical societies, health care
systems, and a professional corporation. In general, commenters
supported and favored the changes to the regulations governing
enforcement actions for PT referral. The majority of commenters agreed
that the three categories were reasonable and would allow CMS to
respond to PT referrals in a measured approach. However, a few
commenters expressed concern that our proposed approach to enforcement
was too prescriptive and would not allow for full use of the discretion
afforded by the TEST Act. Because of the nature and consequences of the
enforcement actions for PT referral, the seriousness of a PT referral
violation, and the heavy reliance on each laboratory and laboratory
director to self-police their analysis of PT samples to ensure that the
testing is performed in accordance with the CLIA requirements, we
developed a prescriptive framework for enforcement actions in order to
apply sanctions in a comprehensive, reasonable, and consistent
approach. We respond to specific comments as follows:
Comment: A few commenters stated that waived laboratories should be
exempt from penalties associated with PT referral since they are not
required by law to participate in PT.
Response: While this comment is outside the scope of this rule, we
would like to clarify that the CLIA statute (42 U.S.C. 263a) states
that laboratories holding a certificate of waiver are only exempt from
subsections (f) and (g) of the statute. All other subsections apply,
including the prohibition against PT referral and the statutory
consequences established in subsection (i), which refers to ``any
laboratory'' that the Secretary determines has intentionally referred
its PT samples. Therefore, the statutory requirements under subsection
(i) do apply to waived laboratories that participate in PT and waived
laboratories are not exempt from the ban against the referral of PT
samples and the penalties required when PT referral has been
substantiated.
Comment: A commenter questioned how CMS will ensure regional
offices and state surveyors are consistent in the application of these
changes and the associated enforcement.
Response: We will continue using the current process that requires
all suspected PT referral cases to be reviewed by the CMS Regional
Office and also forwarded to CMS Central Office for additional review
by a team of experts. The team will continue to thoroughly review every
case to determine whether the facts support a determination of PT
referral and, if so, which category of sanctions will be applied.
Written survey and enforcement guidance and training will be provided
to the regional offices and
[[Page 25466]]
state agencies and will be made publicly available.
Comment: Several commenters stated that CMS should develop and
adopt a definition for ``intentional'' as it applies to PT referral and
add the definition to Sec. 493.2 in the CLIA regulations.
Response: While this comment is outside the scope of this rule, we
point the commenter to the Burden Reduction proposed rule (78 FR 9216).
From the onset of the CLIA program, we have consistently interpreted
the phrase ``intentionally refers'' to mean general intent, as in
intention to act. We proposed the first exception to our longstanding
interpretation of ``intentionally refers'' in the Burden Reduction
proposed rule. Under that proposal, a referral would not be considered
``intentional'' if our investigation reveals PT samples were sent to
another laboratory for reflex or confirmatory testing, the referral is
not a repeat PT referral, and the referral occurred while acting in
full conformance with the laboratory's written, legally accurate, and
adequate standard operating procedure.
Comment: Several commenters questioned if a repeat PT referral
included multiple analyses on a referred PT sample or multiple PT
samples in the same PT event.
Response: As stated in the definition of ``repeat proficiency
testing referral,'' to be considered a repeat PT referral, the referral
must be a second instance in which a PT sample, or a portion of a
sample, is referred, for any reason, to another laboratory for analysis
prior to the laboratory's PT program event cut-off date within the
period of time encompassing the two prior survey cycles (including
initial certification, recertification, or the equivalent for
laboratories surveyed by an approved accreditation organization). A
single instance of referral for multiple analyses on a single PT sample
set, or referral for analyses of multiple samples from the same PT
event, would not be considered a ``second instance.'' A second instance
of referral would arise when referral is made from an entirely
different set of PT samples from an entirely different PT event sent on
a date that is different from the date of the earlier PT event.
Comment: A commenter recommended that CMS not revoke a certificate
for a repeat PT referral unless CMS could determine that the repeat
referral occurred in similar or the same circumstances to the initial
referral.
Response: As stated previously, except in the most egregious
instances of PT referral where the PT sample was referred to another
laboratory, the referring laboratory received the results from the
other laboratory, and the referring laboratory reported to the PT
program the other laboratory's results on or before the event cut-off
date, the laboratory's CLIA certificate will not be revoked for a
single instance of PT referral. Such an instance of PT referral will
result in alternative sanctions. This provides the laboratory an
opportunity to review all policies and procedures and an opportunity to
thoroughly train all staff to mitigate all chances of a second instance
of PT referral. The timeframe included in the definition of a repeat
referral has been defined as the two survey cycles prior to the time of
the PT referral in question. Two survey cycles generally equates to a
4-year period on average. This is not a precise calendar time period
but, with respect to a given laboratory, is carefully recorded as a
matter of actual and documented survey event dates. We believe that it
is reasonable to expect laboratories to maintain a heightened vigilance
for this timeframe to ensure that they do not have any repeated
referrals of PT samples. The narrow exception to the determination of
an intentional referral described in the Burden Reduction proposed rule
will, once finalized, be considered a single instance and will be
incorporated in the determination of whether a repeat PT referral has
taken place.
Comment: Several commenters questioned whether CMS will finalize
the Burden Reduction proposed rule which proposed reforms to the
Medicare and CLIA regulations that we identified as unnecessary,
obsolete or excessively burdensome and questioned how the September 23,
2013 proposed rule relates to the Burden Reduction proposed rule.
Response: In the Burden Reduction proposed rule, we proposed a
narrow exception to our longstanding interpretation of what constitutes
an ``intentional'' PT referral. The proposed narrow exception in the
Burden Reduction rule would work in concert with the framework
described in this final rule for enforcement for PT referral to ensure
the severity of the sanctions fits the nature and extent of the PT
referral violation.
Comment: Several commenters expressed concern with the first
category of sanctions against the laboratory and the owner and operator
for the most egregious forms of PT referral. While the commenters
agreed that the most egregious forms of PT referral warrant the most
serious sanctions and that the laboratory director should also be
sanctioned, there was concern about the automatic prohibition against
the laboratory owner. Each commenter who raised this issue expressed
concern that a mandatory 1 year prohibition for owners, that applies to
all laboratories of that owner, is not reasonable for large health
systems that often own a large number of laboratories in many
locations. The commenters expressed concern that patient care may be
impacted if such an owner is prohibited from obtaining or maintaining a
CLIA certificate for any laboratory that tests human specimens for
health care purposes. The commenters suggested that the one year ban
for the owner should be limited to the single laboratory where the PT
referral occurred.
Response: It is incumbent upon laboratories to organize in a manner
that allows them to mitigate circumstances so that when one or more
laboratories are sanctioned, the rest of the laboratory network is not
unduly impacted. However, we also recognize that there are benefits to
large health systems organizing in ways to promote efficiency of care
with the least cost to their patients. We agree that there should be
some discretion in the regulation to allow for flexibility in the
mandatory 1-year ban against owners of laboratories that, if barred
from ownership, would create access issues in the communities in which
they serve. However, when the CLIA certificate is revoked for the most
egregious violations, encompassing cases of repeat PT referral or cases
where a laboratory reports another laboratory's test results as its
own, we believe that the owner and operator should be banned from
owning or operating a laboratory for at least 1 year, so we will retain
that sanction. However, in response to comments, we are adding a
provision to limit the reach of the owner ban for certain laboratories
under the same ownership as the revoked laboratory if we find, after
review of relevant facts and circumstances, that patients would not be
at risk if the laboratory were exempted from the ban, and that there is
no evidence that a laboratory to be exempted from the ban participated
or was complicit in the PT referral, except that any laboratory of the
owner that received a PT sample from another laboratory, and failed to
timely report such receipt to CMS or to a CMS-approved accrediting
organization, may not be exempted from the owner ban. In assessing
whether patients would be potentially at risk if the laboratory were
exempted from the ban, we will consider factors including, but not
limited to, the following: The extent to which staff of the laboratory
or
[[Page 25467]]
laboratories that may be exempted from the owner ban have been
adequately trained, and will promptly have such training reinforced,
regarding PT; the history of compliance with the CLIA regulations;
evidence of any systemic quality issues for the laboratory or
laboratories that seek to be exempted from the owner ban; and the
potential for access to care problems for patients if the laboratory or
laboratories are not granted an exemption from the owner ban. We are
revising our regulations at Sec. 493.1840(b)(1) to incorporate this
exception.
Comment: Several commenters requested further clarification of when
CMS will limit the suspension or limitation to the individual
laboratory where the PT referral occurred rather than suspending or
limiting the CLIA certificate of all of the laboratories under the
control of the owner or operator. The commenters recommended that we
use a centralized process to determine whether suspension or limitation
is appropriate in each case rather than leaving the decision up to an
individual surveyor.
Response: As stated in the September 23, 2013 proposed rule, the
CLIA certificate will be suspended or limited (rather than revoked), in
combination with alternative sanctions, in those instances in which a
laboratory refers PT samples to a laboratory that operates under a
different CLIA number before the PT event close date and, while the
laboratory reports its own results to the PT program, it receives
results from the second laboratory prior to the event close date. In
contrast to revocation of the CLIA certificate and its accompanying ban
on the owner and operator, suspension usually applies only to the
individual laboratory in question rather than all laboratories that are
under the control of the owner or operator. Suspension or limitation
will always apply to the laboratory that sent the PT sample to another
laboratory (that operates under a different CLIA number) before the PT
event close date and, while the laboratory reports its own results to
the PT program, it receives results from the second laboratory prior to
the event close date. We may also suspend or limit the CLIA certificate
of other laboratories operating under the same owner depending upon the
facts and circumstances of the individual case. For example, if such a
laboratory received PT samples from another laboratory and did not
report the receipt of those PT samples to us, suspension or limitation
will also be considered for that laboratory. As stated previously, it
is incumbent upon laboratories to organize in a manner to mitigate
circumstances so that enforcement against a CLIA certificate does not
unduly impact other laboratories operating under the same CLIA number.
An exhaustive list of scenarios cannot be provided since each case of
PT referral is unique and there is no way to predict every possible
scenario. In determining whether to suspend or limit the CLIA
certificate, we will examine the extent of the PT referral practice as
well as its duration and apply the criteria of Sec. 493.1804(d). We
will develop further written surveyor guidance for the imposition of
the suspension and limitation in PT referral cases. This guidance will
be publicly available.
Comment: Several commenters expressed concern that a CMP will
always be applied to laboratories in PT referral scenarios in which the
referring laboratory does not receive test results prior to the event
cut-off date from another laboratory as a result of the PT referral.
Some stated that no sanctions should be applied in these cases because
they are minor infractions and this category has no flexibility where
it is most needed.
Response: While PT referrals may differ in severity and scope, we
consider a PT referral infraction one of the most serious violations of
the CLIA statute and regulations. PT is a major component of the CLIA
regulations and plays an integral role in the overall quality assurance
of a laboratory. We emphasize that there is no on-site, external
proctor for PT in laboratories, and the testing relies in large part on
an honor system. The PT program places heavy reliance on each
laboratory and laboratory director to self-police their analysis of PT
samples to ensure that the testing is performed in accordance with the
CLIA requirements. Because of these factors, we have determined that a
CMP is always appropriate in those cases where PT referral has been
substantiated. However, there is no ``one size fits all'' CMP for these
cases and there is flexibility in the determination of the amount of
the CMP. The severity and scope of each case will be evaluated closely
to determine appropriate CMP amounts in accordance with the regulation
atSec. 493.1834, which specifies the procedures that CMS follows to
impose a CMP and the range of the penalty amount.
We also note that we received other comments that were outside the
scope of the September 23, 2013 proposed rule; and therefore, are not
addressed in this final rule with comment period.
After consideration of the comments received, we are finalizing the
proposed definitions for ``repeat proficiency testing referral'' at
Sec. 493.2 and the changes to Sec. 493.1840, and the three proposed
conforming changes at the authority citation for Part 493 and at Sec.
493.1 and Sec. 493.1800(a)(2) to include references to the TEST Act.
In response to comments, we are also finalizing the addition of a new
provision at Sec. 493.1840(b)(1)(ii) to allow us to except certain
laboratories from the owner ban, on a laboratory by laboratory basis,
if certain circumstances are met.
V. Other Required Information
A. Requests for Data From the Public
Commenters can gain access to summarized FQHC data on an expedited
basis by downloading the files listed in this section, which are
available on the Internet without charge. For detailed claims data,
requestors would follow the current research request process which can
be found on the Research Data Assistance Center Web site at http://www.resdac.org/.
1. FQHC Summary Data. This file contains data summarized by CCN,
which can be used to model the proposed methodology and calculate
projected payments and impacts under the proposed PPS. The data file is
available at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FQHCPPS/index.html.
2. FQHC Proposed GAFs. This file contains the listed of proposed
GAFs by locality, as published in the Addendum of this final rule with
comment period. The data file is available at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FQHCPPS/index.html.
3. HCRIS Cost Report Data. The data included in this file was
reported on Form CMS-222-92. The dataset includes only the most current
version of each cost report filed with us and includes cost reports
with fiscal year ending dates on or after September 30, 2009. HCRIS
updates this file on a quarterly basis. The data file is available at
http://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/CostReports/HealthClinic.html.
B. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 30-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork
[[Page 25468]]
Reduction Act of 1995 requires that we solicit comment on the following
issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We solicited public comment on the information collection
requirements (ICRs) regarding the proposed FQHC rates and adjustments
in Sec. 405.2470.
The data that are used in computing the FQHS PPS rates and
adjustments are derived from the RHC/FQHC cost report form CMS-222-92,
and claims form UB-04 CMS 1450 (per CMS Pub. 100-04, Medicare Claims
Processing Manual, Chapter 1). The reporting requirements for FQHCs are
in Sec. 405.2470 of the Medicare regulations. We noted that while we
were not proposing any new ICRs, there is currently an OMB approved
information collection request associated with the RHC/FQHC cost report
which has an OMB control number of 0938-0107 and an expiration date of
August 31, 2014.
VI. Waiver of Proposed Rulemaking
We ordinarily publish a notice of proposed rulemaking in the
Federal Register and invite public comment on the proposed rule. The
notice of proposed rulemaking includes a reference to the legal
authority under which the rule is proposed, and the terms and
substances of the proposed rule or a description of the subjects and
issues involved. This procedure can be waived, however, if an agency
finds good cause that a notice-and-comment procedure is impracticable,
unnecessary, or contrary to the public interest and incorporates a
statement of the finding and its reasons in the rule issued.
In section III.B.2. of this final rule with comment period, we
present additional technical and conforming changes. These changes
include specifying that the determination of reasonable charges
continues to apply to FQHCs under the reasonable cost payment system
and changing the term ``Medicare +Choice'' to ``Medicare Advantage.''
We believe that these regulatory changes are technical and conforming
in nature, do not change our payment policies, and provide
clarifications all of which are in the public's interest. We note that
these changes do not change our policy and are technical in nature. As
such, we believe it unnecessary to provide an opportunity for public
comment on these non-controversial ministerial changes.
In section II.E.2. of this final rule with comment period, we are
establishing a new set of HCPCS G-codes by which FQHCs are to report
their actual charges to beneficiaries. Consistent with longstanding
policy, the use of these payment codes does not dictate to FQHCs how to
set their charges. We are permitting FQHCs to utilize a G-code that
would reflect the sum of regular rates charged to both beneficiaries
and other paying patients for a typical bundle of services that would
be furnished per diem to a Medicare beneficiary. Because section
1834(o)(2)(A) of the Act requires implementation of the FQHC PPS
beginning on October 1, 2014, it is both impracticable and contrary to
the public interest to provide an additional period for public comment
before this methodology is implemented. Nonetheless, we are soliciting
an additional round of comments with respect to the G-codes, and will
consider further action if comments received from the public indicate a
need to amend or revise this component of implementation.
Therefore, for the reasons stated previously, we find good cause to
waive the notice of proposed rulemaking for these technical and
conforming changes to our regulations at Sec. Sec. 405.501,
405.2468(f)(4), and 410.152, and for our implantation structure for
reporting charges to Medicare as described in section II.E.2. of the
preamble to this final rule with comment period.
VII. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
VIII. Regulatory Impact Analysis
A. Statement of Need
This final rule with comment period is necessary to establish a
methodology and payment rates for a PPS for FQHC services under
Medicare Part B beginning on October 1, 2014, in compliance with the
statutory requirements of section 10501(i)(3)(A) of the Affordable Care
Act. This final rule with comment period is also necessary to make--(1)
contracting changes for RHCs; (2) conforming changes to other policies
related to FQHCs and RHCs; (3) changes to enforcement actions for
improper proficiency testing referrals.
B. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999) and the Congressional Review Act (5 U.S.C. 804(2).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) Having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with economically significant effects ($100 million or more in any 1
year). This final rule with comment period is an economically
significant rule because we estimate that the FQHC PPS will increase
payments to FQHCs by more than $100 million in 1 year. We believe that
this regulation would not have a significant financial impact on RHCs.
We estimate that this rulemaking is ``economically significant'' as
measured by the $100 million threshold, and
[[Page 25469]]
hence also a major rule under the Congressional Review Act.
Accordingly, we have prepared a RIA that, to the best of our ability,
presents the costs and benefits of the rulemaking.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and government
jurisdictions. All RHCs and FQHCs are considered to be small entities.
The great majority of hospitals and most other health care providers
and suppliers are small entities, either by being nonprofit
organizations or by meeting the SBA definition of a small business
(having revenues of less than $7.0 million to $35.5 million in any 1
year). The provisions in this final rule result in an increase of
approximately 32 percent in the Medicare payment to FQHCs, without
taking into account the application of the ``lesser of'' provision
discussed earlier, and no financial impact on RHCs. Individuals and
states are not included in the definition of a small entity.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. As its measure of
significant economic impact on a substantial number of small entities,
HHS uses a change in revenue of more than 3 to 5 percent. We have not
prepared an analysis for section 1102(b) of the Act because we have
determined that this final rule with comment period would not have a
significant impact on the operations of a substantial number of small
rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2014, that
is approximately $141 million. This rule does not include any mandates
that would impose spending costs on state, local, or tribal governments
in the aggregate, or by the private sector, that would exceed the
threshold of $141 million.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct compliance costs on state
and local governments, preempts state law, or otherwise has Federalism
implications. This final rule with comment period would not have a
substantial effect on state and local governments, preempt state law,
or otherwise have Federalism implications.
This final rule with comment period is subject to the Congressional
Review Act provisions of the Small Business Regulatory Enforcement
Fairness Act of 1996 (5 U.S.C. 801 et seq.) and has been transmitted to
the Congress and the Comptroller General for review.
C. Limitations of Our Analysis
Our quantitative analysis presents the projected effects of our
policy changes, as well as statutory changes effective on FQHCs for
cost reporting periods beginning on or after October 1, 2014. We
estimated the effects of individual policy changes by estimating
payments per visit while holding all other payment policies constant.
We use the best data available, but, generally, we do not attempt to
make adjustments for future changes in such variables as the number of
visits or the prevalence of new patients or IPPE and AWVs furnished to
Medicare beneficiaries. To the extent that there are changes in the
volume and mix of services furnished by FQHCs, the actual impact on
total Medicare revenues will be different from those shown in Table 3
(Impact of the PPS on Payments to FQHCs). In addition, because we have
limited information to accurately project actual FQHC charges, Table 3
does not take into account the application of ``lesser of'' provision
in section 1833(a)(1)(Z) of the Act. (For more information, see
sections II.E.2 and VII.D.1 of this final rule with comment period).
D. Anticipated Effects of the FQHC PPS
1. Effects on FQHCs
As required by section 1834(o)(2)(B)(i) of the Act, initial payment
rates (Medicare and coinsurance) under the FQHC PPS must equal 100
percent of the estimated amount of reasonable costs, as determined
without the application of the current system's UPLs or productivity
standards that can reduce a FQHC's per visit rate. We will pay FQHCs a
single encounter-based rate per beneficiary per day, while allowing for
an exception to the per diem PPS payment for subsequent injury or
illness and mental health services furnished on the same day as a
medical visit, adjusting for geographic differences in the cost of
inputs by applying an adaptation of the GPCI used to adjust payment
under the PFS, and further adjusting the encounter-based rate when a
FQHC furnishes care to a patient that is new to the FQHC or to a
beneficiary receiving a IPPE or AWV.
Based on comparisons of the final PPS rate to the AIRs (as listed
on the FQHC cost reports), the FQHC PPS is estimated to have an overall
impact of increasing total Medicare payments to FQHCs by approximately
32 percent. As discussed in section II.E.2. of this final rule with
comment period, while Medicare payments under the FQHC PPS shall be 80
percent of the lesser of the actual charge or the PPS rate, this impact
analysis is based on payment at the PPS rate does not take into account
the application of ``lesser of'' provision in 1833(a)(1)(Z) of the Act.
The FQHC PPS is effective for cost reports beginning on or after
October 1, 2014. This impact is fully implemented when all FQHCs are
paid under the FQHC PPS and reflects the additional payment rate update
based on the MEI for all of 2015 (fiscal year through the end of the
calendar year). (See section II.D. of this final rule with comment
period for a discussion of the use of the MEI update to calculate the
first year's base payment amount under the FQHC PPS.)
If we apply the ``lesser of'' provision in section 1833(a)(1)(Z) of
the Act and assume that FQHCs' charge structures would remain the same,
approximately 65 percent of FQHCs would be paid less under the FQHC PPS
rate than they are currently paid. However, FQHCs are responsible for
their own pricing structures, and we have limited information to
accurately project actual FQHC charges under the new PPS. Moreover, our
analysis of the potential impact of the application of the ``lesser
of'' provision in section 1833(a)(1)(Z) of the Act compares the
applicable per diem PPS rate with the charge or sum of charges for the
individual HCPCS codes listed on the claims in our sample. As discussed
in section II.E.2. of this final rule with comment period, we are
establishing HCPCS G-codes for FQHCs to report their Medicare FQHC
visits. We will pay FQHCs based on the lesser of the actual charge
reported for the G-code or the PPS rate on each claim. FQHCs will need
to establish charges for these G-codes, and we cannot accurately
project the charges that FQHCs will establish for these G-codes.
Because we have no means to predict behavioral response on charging by
the FQHC community, in the impact table (Table 3), we continue to
compare current payments to the PPS rates when discussing the impact of
the FQHC PPS, which would be the maximum impact that would be expected
after application
[[Page 25470]]
of the ``lesser of'' provision in section 1833(a)(1)(Z) of the Act.
Table 3 shows the impact on cost reporting entities and their
associated delivery sites of the fully implemented FQHC PPS payment
rates compared to current payments to FQHCs. The analysis is based on
cost reports from freestanding and provider-based FQHCs with cost
reporting periods ending between June 30, 2011, and June 30, 2013. We
note that the impact analysis includes cost reporting entities and
claims encounters that were excluded from the modeling as statistical
outliers based on estimated costs. A FQHC with multiple sites has the
option of filing a consolidated cost report, and the sample used to
calculate the impacts reflects 1,240 cost reporting entities that
represent 3,830 delivery sites.
The following is an explanation of the information represented in
Table 3:
Column A (Number of cost-reporting entities): This column
shows the number of cost-reporting entities for each impact category.
Urban/rural status and census division were determined based on the
geographic location of the cost reporting entity. Categories for
Medicare volume were defined from cost report data, based on tertiles
for the percent of total visits that were identified as Medicare
visits. Categories for total volume were defined from cost report data,
based on tertiles for the total number of visits for each cost
reporting entity.
Column B (Number of delivery sites): This column shows the
number of delivery sites associated with the cost reporting entities in
each impact category. (Note that delivery sites that are part of a
consolidated cost reporting entity might not fall into the same impact
category if considered individually. For example, a cost reporting
entity could include delivery sites in multiple census division, and
delivery sites were categorized based on the geographic location of the
cost reporting entity).
Column C (Number of Medicare daily visits): This column
shows the number of Medicare daily visits in the final data set that
were used to model payments under the FQHC PPS. As discussed in section
II.A.4. of this final rule with comment period and consistent with the
policy discussed in section II.B.1. of this final rule with comment
period, separately payable encounters for the same beneficiary at the
same FQHC were combined into a single daily visit, while allowing for a
separate medical visit, mental health visit, and subsequent illness/
injury visit.
Column D (Effect of statutorily required changes): This
column shows the estimated fully implemented combined impact on
payments to FQHCs of changes to the payment structure that are required
by statute. Removing both the UPL and the productivity screen is
estimated to increase total Medicare payments to FQHCs by about 30
percent. The combined impact in column D also reflects the FQHC PPS
requirement to calculate payment based on the costs of all FQHCs,
rather than on an individual FQHC's costs. We note that the impacts for
column D through H reflect the growth in the MEI from July 1, 2012
through September 30, 2014, prior to the application of the forecasted
MEI update for the 15-month period of October 1, 2014 through December
31, 2015.
Columns E through H (Effects of the Adjustments to the
Average Cost per Visit): These columns show the estimated fully
implemented impacts on Medicare payments to FQHCs due to the policy
changes. In developing the Medicare FQHC PPS, section 10501(i)(3)(A) of
the Affordable Care Act requires us to take into account the type,
intensity, and duration of FQHC services, and allows other adjustments,
such as geographic adjustments. As we discussed in section II.A.4. of
this final rule with comment period, the cost report data are
insufficient for modeling these types of adjustments, so we used the
HCPCS codes in the FQHC claims data to support the development of the
FQHC PPS rate and adjustments.
Column E (Effect of daily visit (per diem) rate): This
column shows the estimated fully implemented impact on payments to
FQHCs of the proposal to pay a single encounter-based rate per
beneficiary per day, while allowing an exception to the per diem PPS
payment for subsequent injury or illness and mental health services
furnished on the same day as a medical visit. As it is uncommon for
FQHCs to bill more than one visit per day for the same beneficiary,
this adjustment would have minimal effect on most FQHCs.
Column F (Effect of new patient/IPPE/AWV adjustment): This
column shows the estimated fully implemented impact on payments to
FQHCs of the proposal to adjust the encounter-based rate by 1.3416 when
a FQHC furnished care to a patient that was new to the FQHC or to a
beneficiary receiving an IPPE or AWV. As new patient visits, IPPEs, and
AWVs accounted for approximately 3 percent of all FQHC visits, this
adjustment would have limited reduction on the base encounter rate,
after application of budget neutrality, and a limited redistribution
effect among FQHCs.
Column G (Effect of the FQHC GAF): This column shows the
estimated fully implemented impact on payments to FQHCs of adjusting
payments for geographic differences in costs by applying an adaptation
of the GPCIs used to adjust payment for physician work and practice
expense under the PFS.
Column H (Combined effect of all PPS adjustments): This
column shows the estimated fully implemented impact on payments to
FQHCs of the adjustments in columns E through G. The combined effects
of these adjustments on overall Medicare payment to FQHCs would be 0.1
percent as the effects of these adjustments would be primarily
redistributive and would have minimal impact on Medicare payments in
the aggregate. While the effect of these various adjustments was budget
neutral within the model, the impact analysis includes cost reporting
entities and claims encounters that were excluded from the modeling as
statistical outliers based on estimated costs.
Column I (Combined effect of all policy changes and MEI
adjustment): This column shows the estimated fully implemented impact
on payments to FQHCs of removing the UPL and productivity screen in
Column D, the adjustments to the PPS rates in the preceding columns,
and the application of the forecasted MEI update for the 15-month
period of October 1, 2014 through December 31, 2015.
Table 3 reflects the impacts on cost reporting entities and their
associated delivery sites. This table shows both the impact on payments
to FQHCs of the statutorily required changes to the payment structure
(Column D) and the redistributive effects of the adjustments to the
average cost per visit (Columns E through H). Column I reflects the
combined impact on cost reporting entities of the overall PPS rates and
adjustments and MEI update. This table does not model application of
the provision that Medicare pay FQHCs the lesser of the actual charge
or the PPS payment rate; instead, is assumes payment at the full PPS
rate. Actual payments to FQHCs will depend on the actual charges they
establish under the PPS.
[[Page 25471]]
Table 3--Impact of the PPS on Payments to FQHCs
--------------------------------------------------------------------------------------------------------------------------------------------------------
(I) Effect
(C) Number (D) Effect (E) Effect (F) Effect (H) of all
(A) Number (B) Number of of of daily of new (G) Effect Combined policy
of cost- of medicare statutorily visit (per patient/ of FQHC effect of changes
reporting delivery daily required diem) rate IPPE/AWV GAF (%) all PPS and MEI
entities sites visits changes (%) (%) adjustment adjustments adjustment
(%) (%) (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
All FQHCs................................. 1,240 3,830 5,585,393 29.9 0.0 0.1 0.1 0.1 31.9
Urban/rural Status:
Urban................................. 712 1,945 2,738,585 24.3 0.0 0.1 3.2 3.3 30.2
Rural................................. 373 900 1,447,261 41.9 0.1 0.0 -3.1 -3.1 39.4
Mixed rural-urban..................... 155 985 1,399,547 30.1 0.0 0.0 -2.7 -2.7 28.3
Medicare Volume:
Low (<6.9% of total visits)........... 413 1,102 897,136 24.8 0.0 0.4 3.5 3.9 31.4
Medium (6.9%-13.2% of total visits)... 414 1,403 1,857,689 27.4 0.0 0.1 0.6 0.7 30.1
High (>13.2% of total visits)......... 413 1,325 2,830,568 33.4 0.0 -0.1 -1.3 -1.4 33.3
Total Volume:
Low (<17,340 total visits)............ 413 555 450,262 33.6 0.0 0.2 -0.1 0.1 35.6
Medium (17,340-42,711 total visits)... 414 983 1,387,779 31.8 0.0 0.2 -1.4 -1.1 32.1
High (>42,711 total visits)........... 413 2,292 3,747,352 28.8 0.0 0.0 0.6 0.6 31.4
Census Division:
New England........................... 99 255 709,020 27.4 -0.1 -0.1 2.2 2.1 32.0
Middle Atlantic....................... 111 334 452,168 25.9 -0.1 0.2 3.6 3.7 32.5
East North Central.................... 158 497 651,546 31.3 0.0 0.1 -3.2 -3.2 28.9
West North Central.................... 81 214 266,360 31.6 -0.1 0.1 -5.3 -5.3 26.4
South Atlantic........................ 200 753 1,100,268 32.1 0.1 -0.1 -3.0 -3.0 29.9
East South Central.................... 87 340 379,357 37.3 0.0 0.0 -6.9 -6.9 29.6
West South Central.................... 120 332 388,565 30.5 0.0 0.2 -5.0 -4.8 26.1
Mountain.............................. 107 341 392,506 31.3 0.0 0.4 -2.1 -1.6 31.0
Pacific............................... 272 758 1,243,251 27.2 0.1 0.0 7.5 7.6 38.7
U.S. Territories...................... 5 6 2,352 43.9 0.1 1.5 -1.1 0.5 46.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. Effects on RHCs
While we expect that removing the restriction on contracting will
result in cost savings for RHCs that employ an NP or PA and will no
longer need to conduct employment searches to meet their additional
staffing needs, the financial impact on RHCs is expected be small and
cannot be quantified.
There is no Medicare impact on RHCs as a result of the
implementation of the FQHC PPS.
3. Effects on Other Providers and Suppliers
There would be no financial impact on other providers or suppliers
as a result of the implementation of the FQHC PPS.
4. Effects on the Medicare and Medicaid Programs
We estimate that annual Medicare spending for FQHCs during the
first 5 years of implementation would increase as follows:
Table 4--Estimated Increase in Annual Medicare Payments to FQHCs *
------------------------------------------------------------------------
Estimated
increase in
Fiscal year payments ($ in
millions)
------------------------------------------------------------------------
2015................................................. 170
2016................................................. 250
2017................................................. 260
2018................................................. 280
2019................................................. 300
------------------------------------------------------------------------
* These impacts do not take into account the application of ``lesser
of'' provision in section 1833(a)(1)(Z) of the Act. (For more
information, see sections II.E.2 and VII.D.1 of this final rule with
comment period).
As discussed in section II.E.2. of this final rule comment period,
while Medicare payments under the FQHC PPS shall be 80 percent of the
lesser of the actual charge or the PPS rate, this table is based on
payment at the PPS rate does not take into account the application of
``lesser of'' provision in 1833(a)(1)(Z) of the Act because we have
limited information to accurately project actual FQHC charges. We
intend for the estimated aggregate payment rates under the FQHC PPS to
equal 100 percent of the estimated amount of reasonable costs, as
determined without the application of the current system's UPLs or
productivity standards. We note that the estimated increase in payments
for FY 2015 is smaller than for subsequent years because FQHCs will be
transitioning into the PPS throughout FY 2015 based on their own cost
reporting periods.
After the first year of implementation, the PPS payment rates must
be increased by the percentage increase in the MEI. After the second
year of implementation, PPS rates will be increased by the percentage
increase in a market basket of FQHC goods and services as established
through regulations, or, if not available, the MEI. While we will
consider the merits of estimating a FQHC market basket for use in base
payment updates after the second year of the PPS, payment estimates
were updated annually by the MEI for purposes of this analysis.
There is no financial impact on the Medicaid program as a result of
the implementation of the Medicare FQHC PPS.
5. Effects on Medicare Beneficiaries
Coinsurance under the FQHC PPS would be 20 percent of the lesser of
the FQHC's charge or the PPS rate. Under the current reasonable cost
payment system, beneficiary coinsurance for FQHC services is assessed
based on the FQHC's charge, which can be more than coinsurance based on
the AIR. An analysis of a sample of FQHC claims data for dates of
service between January 1, 2011 through June 30, 2013 indicated that
beneficiary coinsurance based on 20 percent of the FQHC's charges was
approximately $29 million higher, or 20 percent more, than if
coinsurance had been assessed based on 20 percent of the lesser of the
FQHC's charge or the applicable all-inclusive rate.
[[Page 25472]]
Based on comparisons of the final PPS rate to the AIRs, the FQHC
PPS is estimated to have an overall impact of increasing total Medicare
payments to FQHCs by approximately 32 percent, prior to taking into
account the impact of the ``lesser of'' provision. This overall 32
percent increase translates to a 32 percent increase to beneficiary
coinsurance if it were currently assessed based on the FQHC's AIR and
if, under the PPS, it would always be assessed based on the PPS rate.
Because the charge structure among FQHCs varies, and beneficiary
liability for the same mix of FQHC services could differ significantly
based on the differences in charge structures, we have insufficient
data to estimate the change to beneficiary coinsurance due to the FQHC
PPS.
E. Effects of Other Policy Changes
1. Effects of Policy Changes for FQHC's and RHC's
a. Effects of RHC Contracting Changes
Removal of the restrictions on RHCs contracting with nonphysician
practitioners when the statutory requirement to employ an NP or a PA is
met will provide RHCs with greater flexibility in meeting their
staffing requirements. The ability to contract with NPs, PAs, CNMs, CP,
and CSWs will provide RHCs with additional flexibility with respect to
recruiting and retaining non-physician practitioners, which may result
in increasing access to care in rural areas. There is no cost to the
federal government and we cannot estimate a cost savings for RHCs.
b. Effects of the FQHC and RHC Conforming Changes
There are no costs associated with the clarifying, technical, and
conforming changes to the FQHC and RHC regulations.
2. Effects of CLIA Changes for Enforcement Actions for Proficiency
Testing Referral
As discussed in section IV. of this final rule with comment period,
we have made a number of clarifications and changes pertaining to the
regulations governing adverse actions for PT referral under CLIA,
which, in combination with other actions implement the TEST Act and
will ensure conformance between the TEST Act and our regulations. The
TEST Act provides the Secretary with the discretion to apply
alternative sanctions in lieu of potential principal sanctions in cases
of intentional PT referral. Alternative sanctions may include any
combination of civil money penalties, directed plan of correction (such
as required remedial training of staff), temporary suspension of
Medicare or Medicaid payments, or state onsite monitoring.
From 2007 through 2011 there were 41 cases of cited, intentional PT
referral. Of these 41 cases (averaging approximately 8 per year), we
estimate that 28 (or approximately 6 per year on average) may have fit
the terms of this rule to have alternative sanctions applied. Based on
discussions with the most recently affected laboratories that were
cited for PT violations, we estimate that the average cost of the
sanctions applicable under current regulations is approximately
$578,400 per laboratory. The largest single type of cost is the expense
to the laboratory or hospital to contract out for management of the
laboratory, and to pay laboratory director fees, due to the 2-year ban
that prohibits the owner and operator from owning or operating a CLIA-
certified laboratory in accordance with revocation of the CLIA
certificate. We have not included legal expenses in this cost estimate,
as it is not possible to estimate the extent to which laboratories may
still appeal the imposition of the alternative sanctions in this
proposed rule. If the expense of alternative sanctions averaged
$150,000 per laboratory, we estimate the annual fiscal savings of the
changes to average approximately $2.6 million ($578,400 minus $150,000
for 6 laboratories). While the total savings may not be large, the
savings to the individual laboratory or hospital that is affected can
be significant. However, we note that the $2.6 million estimate may
overstate or understate the provision's savings to laboratories. For
example, if under current regulations the prior management is fired
instead of being reassigned to other duties for the 2-year period, some
of the costs of paying for the new management's salaries, benefits and
training may be able to be drawn from funding that had previously been
earmarked to pay those expenses for their predecessors. That is, the
costs associated with the new employee could be offset by the savings
gained when the former employee is terminated. Any such offset will
result in lower savings than was estimated earlier. However, there are
also unknowns that may result in larger savings than estimated earlier.
For example, we have no data on whether terminated management
historically received severance packages. If they did, those savings
would have to be added to the savings we noted earlier. Such changes in
severance payments would represent transfer effects of the proposed
rule, rather than net social costs or benefits. In general, it is only
to the extent that new laboratory directors put forth more effort than
temporarily-banned laboratory directors (due, for example, to the need
to familiarize themselves with laboratories they have not previously
operated) or that support staff put forth more effort to make the new
management arrangements than they would addressing alternative
sanctions that society's resources would be freed for other uses by the
new provision; thus, a comprehensive estimate of laboratory savings
would represent some combination of transfers and net social benefits.
While we recognize these potential inaccuracies in our estimates, we
lack data to account for these considerations.
F. Alternatives Considered
This final rule with comment period contains a range of policies,
including some provisions related to specific statutory provisions. The
preceding sections of this rule provide descriptions of the statutory
provisions that are addressed, identifies those policies when
discretion has been exercised, presents rationale for our final
policies and, where relevant, alternatives that were considered.
G. Accounting Statement and Table
As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars_a004_a-4/), we have prepared an
accounting statement table showing the classification of the impacts
associated with implementation of this final rule with comment period.
[[Page 25473]]
Table 5--Accounting Statement: Classification of Estimated Expenditures Under the FQHC PPS
----------------------------------------------------------------------------------------------------------------
Units
-----------------------------------------------
Category Estimates Discount rate Period
Year dollar (%) covered
----------------------------------------------------------------------------------------------------------------
Transfers
Federal Annualized Monetized Transfers (in 200 2014 7 2014-2018
millions)..................................
204 2014 3 2014-2018
---------------------------------------------------------------
From Whom to Whom........................... Federal Government to FQHCs that receive payments under
Medicare.
----------------------------------------------------------------------------------------------------------------
H. Conclusion
The previous analysis, together with the remainder of this
preamble, provides our Regulatory Flexibility Analysis and a Regulatory
Impact Analysis.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 405
Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medical devices, Medicare, Reporting and
recordkeeping requirements, Rural areas, and X-rays.
42 CFR Part 410
Health facilities, Health professions, Kidney diseases,
Laboratories, Medicare, Reporting and recordkeeping requirements, Rural
areas, X-rays.
42 CFR Part 491
Grant programs--health, Health facilities, Medicaid, Medicare,
Reporting and recordkeeping requirements, Rural areas.
42 CFR Part 493
Administrative practice and procedure, Grant programs--health,
Health facilities, Laboratories, Medicaid, Medicare, Penalties,
Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR Chapter IV as set forth below:
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
0
1. The authority citation for part 405 continues to read as follows:
Authority: Secs. 205(a), 1102, 1861, 1862(a), 1869, 1871, 1874,
1881, and 1886(k) of the Social Security Act (42 U.S.C. 405(a),
1302, 1395x, 1395y(a), 1395ff, 1395hh, 1395kk, 1395rr and
1395ww(k)), and sec. 353 of the Public Health Service Act (42 U.S.C.
263a).
Sec. 405.501 [Amended]
0
2. Section 405.501(b) is amended by removing the phrase ``Federally
qualified health centers and'' and adding in its place the phrase
``FQHCs that are authorized to bill under a reasonable cost system,
and''.
0
3. Section 405.2400 is revised as follows:
Sec. 405.2400 Basis.
Subpart X is based on the provisions of the following sections of
the Act:
(a) Section 1833--Amounts of payment for supplementary medical
insurance services.
(b) Section 1861(aa)--Rural health clinic services and Federally
qualified health center services covered by the Medicare program.
(c) Section 1834(o)--Federally qualified health center prospective
payment system beginning October 1, 2014.
0
4. In Sec. 405.2401, paragraph (b) is amended as follows:
0
A. Removing the definition of ``Act''.
0
B. Revising the definition of ``Allowable costs''.
0
C. Removing the definition of ``Carrier''.
0
D. Adding the definitions of ``Certified nurse midwife (CNM),''
``Clinical psychologist (CP)'', and ``Clinical social worker (CSW)'' in
alphabetical order.
0
E. Revising the definitions of ``Coinsurance'' and ``Deductible''.
0
F. Adding the definitions of ``Employee'' and ``HRSA'' in alphabetical
order.
0
G. Revising paragraphs (1) through (3) of the definition of ``Federally
qualified health center (FQHC)''.
0
H. Removing the definition of ``Intermittent nursing care''.
0
I. Adding the definition of ``Medicare Administrative Contractor
(MAC)'' in alphabetical order.
0
J. Removing the definitions of ``Nurse-midwife'', ``Nurse practitioner
and physician assistant'', and Part-time nursing care''.
0
K. Adding the definitions of ``Nurse practitioner (NP)'', ``Physician
assistant (PA)'' and ``Prospective payment system (PPS)'' in
alphabetical order.
0
L. Revising the definitions of ``Reporting period'' and ``Rural health
clinic''.
0
M. In the definition of ``Visiting nurse services,'' removing the
phrase ``registered nurse'' and adding in its place the phrase
``registered professional nurse''.
The revisions and additions read as follows:
Sec. 405.2401 Scope and definitions.
* * * * *
(b) * * *
Allowable costs means costs that are incurred by a RHC or FQHC that
is authorized to bill based on reasonable costs and are reasonable in
amount and proper and necessary for the efficient delivery of RHC and
FQHC services.
* * * * *
Certified nurse midwife (CNM) means an individual who meets the
applicable education, training, and other requirements of Sec.
410.77(a) of this chapter.
Clinical psychologist (CP) means an individual who meets the
applicable education, training, and other requirements of Sec.
410.71(d) of this chapter.
Clinical social worker (CSW) means an individual who meets the
applicable education, training, and other requirements of Sec.
410.73(a) of this chapter.
Coinsurance means that portion of the RHC's charge for covered
services or that portion of the FQHC's charge or PPS rate for covered
services for which the beneficiary is liable (in addition to the
deductible, where applicable).
* * * * *
Deductible means the amount incurred by the beneficiary during a
calendar year as specified in Sec. 410.160 and Sec. 410.161 of this
chapter.
Employee means any individual who, under the common law rules that
apply in determining the employer-employee relationship (as applied for
purposes of
[[Page 25474]]
section 3121(d)(2) of the Internal Revenue Code of 1986), is considered
to be employed by, or an employee of, an entity. (Application of these
common law rules is discussed in 20 CFR 404.1007 and 26 CFR 31.3121(d)-
1(c).)
Federally qualified health center (FQHC) * * *
(1) Is receiving a grant under section 330 of the Public Health
Service (PHS) Act, or is receiving funding from such a grant under a
contract with the recipient of such a grant and meets the requirements
to receive a grant under section 330 of the PHS Act;
(2) Is determined by the HRSA to meet the requirements for
receiving such a grant;
(3) Was treated by CMS, for purposes of Medicare Part B, as a
comprehensive federally funded health center as of January 1, 1990; or
* * * * *
HRSA means the Health Resources and Services Administration.
* * * * *
Medicare Administrative Contractor (MAC) means an organization that
has a contract with the Secretary to administer the benefits covered by
this subpart as described in Sec. 421.404 of this chapter.
Nurse practitioner (NP) means individuals who meet the applicable
education, training, and other requirements of Sec. 410.75(b) of this
chapter.
* * * * *
Physician assistant (PA) means an individual who meet the
applicable education, training, and other requirements of Sec.
410.74(c) of this chapter.
Prospective payment system (PPS) means a method of payment in which
Medicare payment is made based on a predetermined, fixed amount.
Reporting period generally means a period of 12 consecutive months
specified by the MAC as the period for which a RHC or FQHC must report
required costs and utilization information. The first and last
reporting periods may be less than 12 months.
Rural health clinic (RHC) means a facility that has--
(1) Been determined by the Secretary to meet the requirements of
section 1861(aa)(2) of the Act and part 491 of this chapter concerning
RHC services and conditions for approval; and
(2) Filed an agreement with CMS that meets the requirements in
Sec. 405.2402 to provide RHC services under Medicare.
* * * * *
0
5. Section 405.2402 is amended as follows:
0
A. Revising the section heading.
0
B. Revising paragraphs (b) introductory text and (c) introductory text.
0
C. Revising paragraph (d).
0
D. Removing paragraph (e).
0
E. Redesignating paragraph (f) as paragraph (e).
0
F. Revising newly redesignated paragraph (e).
The revisions read as follows:
Sec. 405.2402 Rural health clinic basic requirements.
* * * * *
(b) Acceptance of the clinic as qualified to furnish RHC services.
If the Secretary, after reviewing the survey agency or accrediting
organization recommendation, as applicable, and other evidence relating
to the qualifications of the clinic, determines that the clinic meets
the requirements of this subpart and of part 491 of this chapter, the
clinic is provided with--
* * * * *
(c) Filing of agreement by the clinic. If the clinic wishes to
participate in the program, it must--
* * * * *
(d) Acceptance by the Secretary. If the Secretary accepts the
agreement filed by the clinic, the Secretary returns to the clinic one
copy of the agreement with a notice of acceptance specifying the
effective date.
(e) Appeal rights. If CMS declines to enter into an agreement or if
CMS terminates an agreement, the clinic is entitled to a hearing in
accordance with Sec. 498.3(b)(5) and (6) of this chapter.
0
6. Section 405.2403 is amended as follows:
0
A. Revising the section heading.
0
B. Amending paragraphs (a) introductory text and (a)(2) by removing the
term ``rural health clinic'' and by adding in its place the term
``RHC''.
0
C. Amending paragraph (a)(3)(ii)(B) by removing the term ``rural health
clinic's'' and adding in its place the term ``RHC's''.
0
D. Amending paragraphs (a)(1), (a)(2), (a)(3)(i), (a)(4)(i), and
(a)(4)(ii) by removing the term ``clinic'' and adding in its place the
term ``RHC''.
The revision reads as follow:
Sec. 405.2403 Rural health clinic content and terms of the agreement
with the Secretary.
* * * * *
0
7. Section 405.2404 is amended as follows:
0
A. Revising the section heading.
0
B. Amending the heading of paragraph (a), and paragraphs (b)(1)
introductory text, (b)(2), (b)(3), (c), and (e) introductory text, by
removing the term ``rural health clinic'' each time it appears and by
adding in its place the term ``RHC''.
0
C. Amending paragraphs (a)(1), (a)(2)(i), (a)(2)(ii)(A), and (a)(3) by
removing the term ``clinic'' each time it appears and adding in its
place the term ``RHC''.
0
D. Amending paragraph (a)(2)(i) by removing the term ``clinic's'' and
adding in its place the term ``RHC's''.
0
E. Amending (a)(2)(ii) introductory text by removing the phrase ``if he
determines'' and adding in its place ``if the Secretary determines''.
0
F. Amending paragraph (a)(3) by removing the phrase ``that shall be
deemed'' and adding in its place the phrase ``the Secretary deems it''.
0
G. Amending paragraph (b)(1) introductory text by removing the term
``he'' and adding in its place the phrase ``he or she''.
0
H. Amending paragraph (b)(1)(i) by removing ``; or'' and adding in its
place ``;''.
0
I. Amending paragraph (b)(2) by removing the phrase ``The Secretary
will give'' and adding in its place the phrase ``The Secretary gives''.
0
J. Revising paragraph (d).
The revisions read as follows:
Sec. 405.2404 Termination of rural health clinic agreements.
* * * * *
(d) Notice to the public. Prompt notice of the date and effect of
termination must be given to the public, through publication in local
newspapers by either of the following:
(1) The RHC, after the Secretary has approved or set a termination
date.
(2) The Secretary, when he or she has terminated the agreement.
* * * * *
0
8. Section 405.2410 is amended as follows:
0
A. In paragraph (a)(1), removing the term ``rural health clinic'' and
adding in its place the term ``RHC''.
0
B. In paragraph (a)(2), removing the term ``Federally qualified health
center'' and adding in its place the term ``FQHC''.
0
C. Revising paragraph (b).
The revision reads as follows:
Sec. 405.2410 Application of Part B deductible and coinsurance.
* * * * *
(b) Application of coinsurance. Except for preventive services for
which Medicare pays 100 percent under Sec. 410.152(l) of this chapter,
a beneficiary's responsibility is either of the following:
(1) For RHCs and FQHCs that are authorized to bill on the basis of
the reasonable cost system--
(i) A coinsurance amount that does not exceed 20 percent of the
RHC's or
[[Page 25475]]
FQHC's reasonable customary charge for the covered service; and
(ii)(A) The beneficiary's deductible and coinsurance amount for any
one item or service furnished by the RHC may not exceed a reasonable
amount customarily charged by the RHC for that particular item or
service; or
(B) For any one item or service furnished by a FQHC, a coinsurance
amount that does not exceed 20 percent of a reasonable customary charge
by the FQHC for that particular item or service.
(2) For FQHCs authorized to bill under the PPS, a coinsurance
amount which is 20 percent of the lesser of--
(i) The FQHC's actual charge; or
(ii) The FQHC PPS rate for the covered service.
0
9. Section 405.2411 is amended as follows:
0
A. Revising paragraph (a) introductory text.
0
B. In paragraphs (a)(1) through (a)(3), removing ``;'' and adding in
its place ``.''.
0
C. Revising paragraphs (a)(4) and (5).
0
D. Adding a new paragraph (a)(6).
0
E. Revising paragraph (b).
The revisions and addition read as follows:
Sec. 405.2411 Scope of benefits.
(a) The following RHC and FQHC services are reimbursable under this
subpart:
* * * * *
(4) Services and supplies furnished as incident to a nurse
practitioner, physician assistant, certified nurse midwife, clinical
psychologist, or clinical social worker service.
(5) Visiting nurse services when provided in accordance with
1861(aa)(1) of the Act and Sec. 405.2416.
(6) Clinical psychologist and clinical social worker services as
specified in Sec. 405.2450.
(b) RHC and FQHC services are--
(1) Covered when furnished in a RHC, FQHC, or other outpatient
setting, including a patient's place of residence;
(2) Covered when furnished during a Part A stay in a skilled
nursing facility only when provided by a physician, nurse practitioner,
physician assistant, certified nurse midwife or clinical psychologist
employed or under contract with the RHC or FQHC at the time the
services are furnished; and
(3) Not covered in a--
(i) Hospital as defined in section 1861(e) of the Act; or
(ii) Critical access hospital as defined in section 1861(mm)(1) of
the Act.
0
10. Section 405.2412 is revised to read as follows:
Sec. 405.2412 Physicians' services.
Physicians' services are professional services that are furnished
by either of the following:
(a) By a physician at the RHC or FQHC.
(b) Outside of the RHC or FQHC by a physician whose agreement with
the RHC or FQHC provides that he or she will be paid by the RHC or FQHC
for such services and certification and cost reporting requirements are
met.
Sec. 405.2413 [Amended]
0
11. Section 405.2413 is amended as follows:
0
A. Amending paragraph (a)(2) by removing the term ``rural health
clinic's'' and by adding in its place the term ``RHC's or FQHC's''.
0
B. Amending paragraph (a)(6) by removing the term ``clinic's'' and by
adding in its place the term ``RHC's or ``FQHC's'' and by removing the
term ``clinic'' and by adding in its place the term ``RHC''.
0
12. Section 405.2414 is amended as follows:
0
A. Revising the section heading and paragraphs (a) introductory text
and (a)(1).
0
B. In paragraphs (a)(2) and (3), removing ``;'' and adding in its place
``.''.
0
C. Revising paragraph (a)(4).
0
D. In paragraph (a)(5), removing the phrase ``They would'' and adding
in its place the phrase ``The services would''.
0
E. In paragraph (c), removing the phrase ``physician assistants, nurse
midwives or specialized nurse practitioners'' and adding in its place
the phrase ``physician assistants or certified nurse midwives''.
The revisions read as follows:
Sec. 405.2414 Nurse practitioner, physician assistant, and certified
nurse midwife services.
(a) Professional services are payable under this subpart if the
services meet all of the following:
(1) Furnished by a nurse practitioner, physician assistant, or
certified nurse midwife who is employed by, or receives compensation
from, the RHC or FQHC.
* * * * *
(4) Are of a type which the nurse practitioner, physician assistant
or certified nurse midwife who furnished the service is legally
permitted to perform by the State in which the service is rendered.
* * * * *
0
13. Section 405.2415 is revised to read as follows:
Sec. 405.2415 Services and supplies incident to nurse practitioner,
physician assistant, certified nurse midwife, clinical psychologist, or
clinical social worker services.
(a) Services and supplies incident to a nurse practitioner,
physician assistant, certified nurse midwife, clinical psychologist, or
clinical social worker service are payable under this subpart if the
service or supply is all of the following:
(1) Of a type commonly furnished in physicians' offices.
(2) Of a type commonly rendered either without charge or included
in the RHC's or FQHC's bill.
(3) Furnished as an incidental, although integral part of
professional services furnished by a nurse practitioner, physician
assistant, certified nurse midwife, clinical psychologist, or clinical
social worker.
(4) Furnished in accordance with applicable State law.
(5) Furnished under the direct supervision of a physician, nurse
practitioner, physician assistant, certified nurse midwife, clinical
psychologist or clinical social worker.
(6) In the case of a service, furnished by a member of the RHC's
health care staff who is an employee of the RHC.
(b) The direct supervision requirement is met in the case of any of
the following persons only if the person is permitted to supervise
these services under the written policies governing the RHC or FQHC:
(1) Nurse practitioner.
(2) Physician assistant.
(3) Certified nurse midwife.
(4) Clinical psychologist.
(5) Clinical social worker.
(c) Only drugs and biologicals which cannot be self-administered
are included within the scope of this benefit.
0
14. Section 405.2416 is amended as follows:
0
A. Revising paragraphs (a) introductory text and (a)(1).
0
B. In paragraph (a)(2), removing ``;'' and adding in its place ``.''.
0
C. Revising paragraphs (a)(3) and (4).
0
D. Revising paragraphs (b) introductory text and (b)(1).
The revisions read as follows:
Sec. 405.2416 Visiting nurse services.
(a) Visiting nurse services are covered if the services meet all of
the following:
(1) The RHC or FQHC is located in an area in which the Secretary
has determined that there is a shortage of home health agencies.
* * * * *
(3) The services are furnished by a registered professional nurse
or licensed
[[Page 25476]]
practical nurse that is employed by, or receives compensation for the
services from the RHC or FQHC.
(4) The services are furnished under a written plan of treatment
that is both of the following:
(i)(A) Established and reviewed at least every 60 days by a
supervising physician of the RHC or FQHC; or
(B)(1) Established by a nurse practitioner, physician assistant or
certified nurse midwife; and
(2) Reviewed at least every 60 days by a supervising physician.
(ii) Signed by the supervising physician, nurse practitioner,
physician assistant or certified nurse midwife of the RHC or FQHC.
(b) The nursing care covered by this section includes the
following:
(1) Services that must be performed by a registered professional
nurse or licensed practical nurse if the safety of the patient is to be
assured and the medically desired results achieved.
* * * * *
Sec. 405.2417 [Amended]
0
15. Section 405.2417 is amended as follows:
0
A. In the introductory text, removing the phrase ``rural health
clinic'' and adding in its place ``RHC or FQHC''
0
B. In paragraph (a), removing the phrase ``rural health clinic'' and
adding in its place ``RHC or FQHC'', and removing ``;'' and adding in
its place ``.''.
0
C. In paragraph (b), removing ``; or'' and adding in its place ``.''.
0
16. Section 405.2430 is amended as follows:
0
A. Revising paragraphs (a)(1) introductory text, (a)(1)(i), and
(a)(1)(ii).
0
B. In paragraph (a)(4), removing the phrase ``Federally qualified
health center'' and adding in its place the term ``FQHC''.
0
C. Revising paragraph (b).
0
D. Removing paragraph (c).
0
E. Redesignating paragraph (d) as paragraph (c).
The revisions read as follows:
Sec. 405.2430 Basic requirements.
(a) * * *
(1) In response to a request from an entity that wishes to
participate in the Medicare program, CMS enters into an agreement with
an entity when all of the following occur:
(i) HRSA approves the entity as meeting the requirements of section
330 of the PHS Act.
(ii) The entity assures CMS that it meets the requirements
specified in this subpart and part 491 of this chapter, as described in
Sec. 405.2434(a).
* * * * *
(b) Prior HRSA FQHC determination. An entity applying to become a
FQHC must do the following:
(1) Be determined by HRSA as meeting the applicable requirements of
the PHS Act, as specified in Sec. 405.2401(b).
(2) Receive approval by HRSA as a FQHC under section 330 of the PHS
Act (42 U.S.C. 254b).
* * * * *
0
17. Section 405.2434 is amended as follows:
0
A. In the introductory text, removing the phrase ``Federally qualified
health center'' and adding in its place the term ``FQHC''.
0
B. In paragraph (a)(1) by removing the phrase ``Federally qualified
health center'' and adding in its place the term ``FQHC'' each time it
appears.
0
C. In paragraph (a)(2) by removing the term ``Centers'' and adding in
its place the term ``FQHCs''.
0
D. Revising paragraphs (b), (c)(1), and (c)(4).
0
E. In paragraph (c)(3) by removing the phrase ``Federally qualified
health center'' and adding in its place the term ``FQHC'' each time it
appears.
0
F. In paragraphs (d)(1), (d)(3) introductory text, (e)(1), (e)(2), and
(e)(3) by removing the phrase ``Federally qualified health center''
each time it appears and adding in its place the term ``FQHC''.
0
G. In paragraphs (d)(3)(ii) and (e)(2) by removing the phrase
``Federally qualified health center's'' and adding in its place the
term ``FQHC's'' .
The revisions read as follows:
Sec. 405.2434 Content and terms of the agreement.
* * * * *
(b) Effective date of agreement. The effective date of the
agreement is determined in accordance with the provisions of Sec.
489.13 of this chapter.
(c) * * *
(1) For non-FQHC services that are billed to Part B, the
beneficiary is responsible for payment of a coinsurance amount which is
20 percent of the amount of Part B payment made to the FQHC for the
covered services.
* * * * *
(4) The FQHC may charge the beneficiary for items and services that
are not FQHC services. If the item or service is covered under Medicare
Part B, the FQHC may not charge the beneficiary more than 20 percent of
the Part B payment amount.
* * * * *
Sec. 405.2436 [Amended]
0
18. Section 405.2436 is amended as follows:
0
A. In paragraphs (a) introductory text, (a)(2), (b)(1)(i), (b)(2)(i),
(b)(3), (c)(1) introductory text, (c)(2), (c)(3), and (d) by removing
the phrase ``Federally qualified health center'' each time it appears
and adding in its place the term ``FQHC''.
0
B. In paragraphs (b)(1) introductory text, (b)(1)(ii), (b)(2)
introductory text, and (d) by removing the phrase ``Federally qualified
health center's'' and adding in its place the term ``FQHC's''.
0
19. Section 405.2440 is amended by revising the introductory text to
read as follows.
Sec. 405.2440 Conditions for reinstatement after termination by CMS.
When CMS has terminated an agreement with a FQHC, CMS does not
enter into another agreement with the FQHC to participate in the
Medicare program unless CMS--
* * * * *
Sec. 405.2442 [Amended]
0
20. Section 405.2442 is amended as follows:
0
A. In paragraph (a) introductory text by removing the phrase
``Federally qualified health center'' each time it appears and adding
in its place the term ``FQHC''.
0
B. In paragraph (b) by removing the phrase ``Federally qualified health
center's'' and adding in its place the term ``FQHC's''.
Sec. 405.2444 [Amended]
0
21. Section 405.2444 is amended as follows:
0
A. In paragraph (c) by removing the phrase ``Federally qualified health
center'' and adding in its place the term ``FQHC''.
0
B. In paragraphs (a)(2), (b), and (c) by removing the term ``center''
each time it appears, and by adding in its place the term ``FQHC''.
0
22. Section 405.2446 is amended as follows:
0
A. Revising paragraphs (a), (b)(2), (3), (4), and (6).
0
B. Removing paragraph (b)(8).
0
C. Redesignating paragraphs (b)(9) and (10) as (b)(8) and (9),
respectively.
0
D. In paragraphs (c) and (d), removing the phrase ``Federally qualified
health center'' and adding in its place the term ``FQHC''.
The revisions read as follows:
Sec. 405.2446 Scope of services.
(a) For purposes of this section, the terms rural health clinic and
RHC when they appear in the cross references in paragraph (b) of this
section also mean
[[Page 25477]]
Federally qualified health centers and FQHCs.
(b) * * *
(2) Services and supplies furnished as incident to a physician's
professional service, as specified in Sec. 405.2413.
(3) Nurse practitioner, physician assistant or certified nurse
midwife services as specified in Sec. 405.2414.
(4) Services and supplies furnished as incident to a nurse
practitioner, physician assistant, or certified nurse midwife service,
as specified in Sec. 405.2415.
* * * * *
(6) Services and supplies furnished as incident to a clinical
psychologist or clinical social worker service, as specified in Sec.
405.2452.
* * * * *
0
23. Section 405.2448 is amended as follows:
0
A. Revising paragraphs (a) introductory text, (a)(1) and (2).
0
B. Removing paragraph (a)(3).
0
C. Redesignating paragraph (a)(4) as (a)(3).
0
D. In paragraph (b) introductory text by removing the phrase
``Federally qualified health centers'' and adding in its place the term
``FQHCs''.
0
E. In paragraph (d) by removing the phrase ``a Federally qualified
health center service, but may be provided at a Federally qualified
health center if the center'' and adding in its place the phrase ``a
FQHC service, but may be provided at a FQHC if the FQHC''.
The revisions read as follows:
Sec. 405.2448 Preventive primary services.
(a) Preventive primary services are those health services that--
(1) A FQHC is required to provide as preventive primary health
services under section 330 of the PHS Act; and
(2) Are furnished--
(i) By a or under the direct supervision of a physician, nurse
practitioner, physician assistant, certified nurse midwife, clinical
psychologist or clinical social worker; or
(ii) By a member of the FQHC's health care staff who is an employee
of the FQHC or by a physician under arrangements with the FQHC.
* * * * *
Sec. 405.2449 [Amended]
0
24. Section 405.2449 is amended as follows:
0
A. In the introductory text by removing the phrase ``Federally
qualified health center'' and adding in its place the term ``FQHC''.
0
B. In paragraph (b) by removing ``; and'' and adding in its place
``.''.
Sec. 405.2452 [Amended]
0
25. Section 405.2452 is amended as follows:
0
A. In paragraph (a)(2), by removing the phrase ``Federally qualified
health center's'' and adding in its place the term ``FQHC's''.
0
B. In paragraph (a)(6), removing the term ``center'' and adding in its
place the term ``FQHC''.
0
C. In paragraph (b), by removing the phrase ``federally qualified
health center'' and adding in its place the term ``FQHC''.
0
26. Section 405.2460 is revised to read as follows:
Sec. 405.2460 Applicability of general payment exclusions.
The payment conditions, limitations, and exclusions set out in
subpart C of this part, part 410 and part 411 of this chapter are
applicable to payment for services provided by RHCs and FQHCs, except
that preventive primary services, as defined in Sec. 405.2448, are
statutorily authorized for FQHCs and not excluded by the provisions of
section 1862(a) of the Act.
0
27. Section 405.2462 is revised to read as follows:
Sec. 405.2462 Payment for RHC and FQHC services.
(a) Payment to provider-based RHCs and FQHCs that are authorized to
bill under the reasonable cost system. A RHC or FQHC that is authorized
to bill under the reasonable cost system is paid in accordance with
parts 405 and 413 of this subchapter, as applicable, if the RHC or FQHC
is--
(1) An integral and subordinate part of a hospital, skilled nursing
facility or home health agency participating in Medicare (that is, a
provider of services); and
(2) Operated with other departments of the provider under common
licensure, governance and professional supervision.
(b) Payment to independent RHCs and freestanding FQHCs that are
authorized to bill under the reasonable cost system. (1) RHCs and FQHCs
that are authorized to bill under the reasonable cost system are paid
on the basis of an all-inclusive rate for each beneficiary visit for
covered services. This rate is determined by the MAC, in accordance
with this subpart and general instructions issued by CMS.
(2) The amount payable by the MAC for a visit is determined in
accordance with paragraphs (e)(1) and (2) of this section.
(c) Payment to FQHCs that are authorized to bill under the
prospective payment system. A FQHC that is authorized to bill under the
prospective payment system is paid a single, per diem rate based on the
prospectively set rate for each beneficiary visit for covered services.
This rate is adjusted for the following:
(1) Geographic differences in cost based on the Geographic Practice
Cost Indices (GPCIs) in accordance with section 1848(e) of the Act and
42 CFR 414.2 and 414.26 are used to adjust payment under the physician
fee schedule during the same period, limited to only the work and
practice expense GPCIs.
(2) Furnishing of care to a beneficiary that is a new patient with
respect to the FQHC, including all sites that are part of the FQHC. A
new patient is one that has not been treated by the FQHC's organization
within the previous 3 years.
(3) Furnishing of care to a beneficiary receiving a comprehensive
initial Medicare visit (that is an initial preventive physical
examination or an initial annual wellness visit) or a subsequent annual
wellness visit.
(d)(1) Except for preventive services for which Medicare pays 100
percent under Sec. 410.152(l) of this chapter, Medicare pays--
(i) 80 percent of the all-inclusive rate for FQHCs that are
authorized to bill under the reasonable cost system; and
(ii) 80 percent of the lesser of the FQHC's actual charge or the
PPS encounter rate for FQHCs authorized to bill under the PPS.
(2) No deductible is applicable to FQHC services.
(e) For RHCs visits, payment is made in accordance with one of the
following:
(1) If the deductible has been fully met by the beneficiary prior
to the RHC visit, Medicare pays 80 percent of the all-inclusive rate.
(2) If the deductible has not been fully met by the beneficiary
before the visit, and the amount of the RHC's reasonable customary
charge for the services that is applied to the deductible is less than
the all-inclusive rate, the amount applied to the deductible is
subtracted from the all-inclusive rate and 80 percent of the remainder,
if any, is paid to the RHC.
(3) If the deductible has not been fully met by the beneficiary
before the visit, and the amount of the RHC's reasonable customary
charge for the services that is applied to the deductible is equal to
or exceeds the all-inclusive rate, no payment is made to the RHC.
(f) To receive payment, the FQHC or RHC must do all of the
following:
(1) Furnish services in accordance with the requirements of subpart
X of part 405 of this chapter and subpart A of part 491 of this
chapter.
[[Page 25478]]
(2) File a request for payment on the form and manner prescribed by
CMS.
0
28. Section 405.2463 is revised to read as follows:
Sec. 405.2463 What constitutes a visit.
(a) Visit--General. (1) For RHCs, a visit is either of the
following:
(i) Face-to-face encounter between a RHC patient and one of the
following:
(A) Physician.
(B) Physician assistant.
(C) Nurse practitioner.
(D) Certified nurse midwife.
(E) Visiting registered professional or licensed practical nurse.
(G) Clinical psychologist.
(H) Clinical social worker.
(ii) Qualified transitional care management service.
(2) For FQHCs, a visit is either of the following:
(i) A visit as described in paragraph (a)(1)(i) of this section.
(ii) A face-to-face encounter between a patient and either of the
following:
(A) A qualified provider of medical nutrition therapy services as
defined in part 410, subpart G, of this chapter.
(B) A qualified provider of outpatient diabetes self-management
training services as defined in part 410, subpart H, of this chapter.
(b) Visit--Medical. (1) A medical visit is a face-to-face encounter
between a RHC or FQHC patient and one of the following:
(i) Physician.
(ii) Physician assistant.
(iii) Nurse practitioner.
(iv) Certified nurse midwife.
(v) Visiting registered professional or licensed practical nurse.
(2) A medical visit for a FQHC patient may be either of the
following:
(i) Medical nutrition therapy visit.
(ii) Diabetes outpatient self-management training visit.
(3) Visit--Mental health. A mental health visit is a face-to-face
encounter between a RHC or FQHC patient and one of the following:
(i) Clinical psychologist.
(ii) Clinical social worker.
(iii) Other RHC or FQHC practitioner, in accordance with paragraph
(b)(1) of this section, for mental health services.
(c) Visit--Multiple. (1) For RHCs and FQHCs that are authorized to
bill under the reasonable cost system, encounters with more than one
health professional and multiple encounters with the same health
professional that take place on the same day and at a single location
constitute a single visit, except when the patient--
(i) Suffers an illness or injury subsequent to the first visit that
requires additional diagnosis or treatment on the same day;
(ii) Has a medical visit and a mental health visit on the same day;
or
(iii) Has an initial preventive physical exam visit and a separate
medical or mental health visit on the same day.
(2) For RHCs and FQHCs that are authorized to bill under the
reasonable cost system, Medicare pays RHCs and FQHCs for more than 1
visit per day when the conditions in paragraph (c)(1) of this section
are met.
(3) For FQHCs that are authorized to bill under the reasonable cost
system, Medicare pays for more than 1 visit per day when a DSMT or MNT
visit is furnished on the same day as a visit described in paragraph
(c)(1) of this section are met.
(4) For FQHCs billing under the prospective payment system,
Medicare pays for more than 1 visit per day when the patient--
(i) Suffers an illness or injury subsequent to the first visit that
requires additional diagnosis or treatment on the same day; or
(ii) Has a medical visit and a mental health visit on the same day.
0
29. Section 405.2464 is revised to read as follows:
Sec. 405.2464 Payment rate.
(a) Determination of the payment rate for RHCs and FQHCs that are
authorized to bill on the basis of reasonable cost. (1) An all-
inclusive rate is determined by the MAC at the beginning of the cost
reporting period.
(2) The rate is determined by dividing the estimated total
allowable costs by estimated total visits for RHC or FQHC services.
(3) The rate determination is subject to any tests of
reasonableness that may be established in accordance with this subpart.
(4) The MAC, during each reporting period, periodically reviews the
rate to assure that payments approximate actual allowable costs and
visits and adjusts the rate if:
(i) There is a significant change in the utilization of services;
(ii) Actual allowable costs vary materially from allowable costs;
or
(iii) Other circumstances arise which warrant an adjustment.
(5) The RHC or FQHC may request the MAC to review the rate to
determine whether adjustment is required.
(b) Determination of the payment rate for FQHCs billing under the
prospective payment system. (1) A per diem rate is calculated by CMS by
dividing total FQHC costs by total FQHC daily encounters to establish
an average per diem cost.
(2) The per diem rate is adjusted as follows:
(i) For geographic differences in the cost of inputs according to
Sec. 405.2462(c)(1).
(ii) When the FQHC furnishes services to a new patient, as defined
in Sec. 405.2462(c)(2).
(iii) When a beneficiary receives either of the following:
(A) A comprehensive initial Medicare visit (that is, an initial
preventive physical examination or an initial annual wellness visit).
(B) A subsequent annual wellness visit.
0
30. Section 405.2466 is amended to read as follows:
0
A. By revising paragraph (a) and paragraph (b) heading.
0
B. In paragraph (b)(1) introductory text by removing the term
``intermediary'' and by adding in its place the term ``MAC''.
0
C. In paragraphs (b)(1)(i), and (b)(1)(ii) by removing the term ``rural
health clinic'' each time it appears and by adding in its place the
term ``RHC'' and by removing the term ``Federally qualified health
center'' and by adding in its place the term ``FQHC''.
0
D. Revising paragraph (b)(1)(iii).
0
E. In paragraph (b)(1)(iv) by removing the term ``rural health
clinics'' and by adding in its place the term ``RHCs''.
0
F. In paragraphs (b)(1) introductory text, (b)(2), (c)(1), (c)(2), and
(d)(2) by removing the word ``clinic'' each time it appears and by
adding in its place the term ``RHC''.
0
G. In paragraphs (b)(1) introductory text, (b)(2), (c)(1), (c)(2), and
(d)(2) by removing the word ``center'' each time it appears and by
adding in its place the term ``FQHC''.
0
H. Revising paragraphs (c) introductory text and (d)(1).
0
I. In paragraph (d)(2) by removing the term ``intermediary'' each time
it appears and by adding in its place the term ``MAC''.
The revisions read as follows:
Sec. 405.2466 Annual reconciliation.
(a) General. Payments made to RHCs or FQHCs that are authorized to
bill under the reasonable cost system during a reporting period are
subject to annual reconciliation to assure that those payments do not
exceed or fall short of the allowable costs attributable to covered
services furnished to Medicare beneficiaries during that period.
(b) Calculation of reconciliation for RHCs or FQHCs that are
authorized to bill under the reasonable cost system. (1) * * *
(iii) The total payment due the RHC is 80 percent of the amount
calculated by subtracting the amount of deductible incurred by
beneficiaries that is
[[Page 25479]]
attributable to RHC services from the cost of these services. FQHC
services are not subject to a deductible and the payment computation
for FQHCs does not include a reduction related to the deductible.
* * * * *
(c) Notice of program reimbursement. The MAC notifies the RHC or
FQHC that is authorized to bill under the reasonable-cost system:
* * * * *
(d) * * *
(1) Underpayments. If the total reimbursement due the RHC or FQHC
that is authorized to bill under the reasonable cost system exceeds the
payments made for the reporting period, the MAC makes a lump-sum
payment to the RHC or FQHC to bring total payments into agreement with
total reimbursement due the RHC or FQHC.
* * * * *
0
31. Add Sec. 405.2467 to read as follows:
Sec. 405.2467 Requirements of the FQHC PPS.
(a) Cost reporting. For cost reporting periods beginning on or
after October 1, 2014, FQHCs are paid the lesser of their actual
charges or the FQHC PPS rate that does all of the following:
(1) Includes a process for appropriately describing the services
furnished by FQHCs.
(2) Establishes payment rates for specific payment codes based on
such appropriate descriptions of services.
(3) Takes into account the type, intensity and duration of services
furnished by FQHCs.
(4) May include adjustments (such as geographic adjustments)
determined by the Secretary.
(b) HCPCS coding. FQHCs are required to submit HCPCS codes in
reporting services furnished.
(c) Initial payments. (1) Beginning October 1, 2014, for the first
15 months of the PPS, the estimated aggregate amount of PPS rates is
equal to 100 percent of the estimated amount of reasonable costs that
would have occurred for that period if the PPS had not been
implemented.
(2) Payment rate is calculated based on the reasonable cost system,
prior to productivity adjustments and any payment limitations.
(d) Payments in subsequent years. (1) Beginning January 1, 2016,
PPS payment rates will be increased by the percentage increase in the
Medicare economic index.
(2) Beginning January 1, 2017, PPS rates will be increased by the
percentage increase in a market basket of FQHC goods and services as
established through regulations, or, if not available, the Medicare
economic index.
0
32. Section 405.2468 is amended by:
0
A. In paragraph (a) by removing the term ``intermediary'' and by adding
in its place the term ``MAC''.
0
B. In the headings of paragraphs (b) and (c), by removing the term
``rural health clinic'' and by adding in its place the term ``RHC''.
0
C. In the heading of paragraph (b) by removing the term ``Federally
qualified health center'' and by adding in its place the term ``FQHC''.
0
D. In paragraphs (b)(4), (b)(5), (d)(2)(iv), and (d)(2)(v) by removing
the word ``clinic'' each time it appears and by adding in its place the
term ``RHC''.
0
E. In paragraphs (b)(4), (b)(5), (d)(2)(iv), (d)(2)(v) by removing the
word ``center'' each time it appears and by adding in its place the
term ``FQHC''.
0
F. Revising paragraphs (b)(1), (c) and (d)(1).
0
G. In paragraph (f)(4) by removing the term ``Medicare +Choice'' and
adding in its place the term ``Medicare Advantage''.
The revisions read as follows:
Sec. 405.2468 Allowable costs.
* * * * *
(b) * * *
(1) Compensation for the services of a physician, physician
assistant, nurse practitioner, certified nurse-midwife, visiting
registered professional or licensed practical nurse, clinical
psychologist, and clinical social worker who owns, is employed by, or
furnishes services under contract to a FQHC or RHC.
* * * * *
(c) Tests of reasonableness of cost and utilization. Tests of
reasonableness authorized by sections 1833(a) and 1861(v)(1)(A) of the
Act may be established by CMS or the MAC with respect to direct or
indirect overall costs, costs of specific items and services, or costs
of groups of items and services. For RHCs and FQHCs that are authorized
to bill under the reasonable cost system, these tests include, but are
not limited to, screening guidelines and payment limits.
(d) * * *
(1) Costs in excess of amounts established by the guidelines are
not included unless the RHC or FQHC that is authorized to bill under
the reasonable cost system provides reasonable justification
satisfactory to the MAC.
* * * * *
0
33. Section 405.2469 is revised to read as follows:
Sec. 405.2469 FQHC supplemental payments.
(a) Eligibility for supplemental payments. FQHCs under contract
(directly or indirectly) with MA organizations are eligible for
supplemental payments for FQHC services furnished to enrollees in MA
plans offered by the MA organization to cover the difference, if any,
between their payments from the MA plan and what they would receive
either:
(1) Under the reasonable cost payment system if the FQHC is
authorized to bill under the reasonable cost payment system, or
(2) The PPS rate if the FQHC is authorized to bill under the PPS.
(b) Calculation of supplemental payment. The supplemental payment
for FQHC covered services provided to Medicare patients enrolled in MA
plans is based on the difference between--
(1) Payments received by the FQHC from the MA plan as determined on
a per visit basis and the FQHCs all-inclusive cost-based per visit rate
as set forth in this subpart, less any amount the FQHC may charge as
described in section 1857(e)(3)(B) of the Act; or
(2) Payments received by the FQHC from the MA plan as determined on
a per visit basis and the FQHC PPS rate as set forth in this subpart,
less any amount the FQHC may charge as described in section
1857(e)(3)(B) of the Act.
(c) Financial incentives. Any financial incentives provided to
FQHCs under their MA contracts, such as risk pool payments, bonuses, or
withholds, are prohibited from being included in the calculation of
supplemental payments due to the FQHC.
(d) Per visit supplemental payment. A supplemental payment required
under this section is made to the FQHC when a covered face-to-face
encounter occurs between a MA enrollee and a practitioner as set forth
in Sec. 405.2463.
Sec. 405.2470 [Amended]
0
34. Section 405.2470 is amended by:
0
A. In paragraphs (a)(1), (b)(1), (c)(3), (c)(4), and (c)(5) by removing
the term ``intermediary'', and by adding in its place the term ``MAC''.
0
B. In paragraph (b)(2), by removing the term ``intermediary's'' and by
adding in its place the term ``MAC's''.
0
C. In paragraphs (a) introductory text, (c)(1), (c)(2)(i), and
(c)(2)(ii) by removing the term ``rural health clinic'' and by adding
in its place the term ``RHC''.
0
D. In paragraphs (a) introductory text, (c)(1), (c)(2)(i), and
(c)(2)(ii) by removing the term ``Federally qualified health center''
and by adding in its place the term ``FQHC''.
[[Page 25480]]
0
E. In paragraphs (b)(1), (b)(2), (c)(1), (c)(2) introductory text,
(c)(3), (c)(4), (c)(5), and (c)(6) by removing the term ``clinic'' each
time it appears and by adding in its place the term ``RHC''.
0
F. In paragraphs (b)(1), (b)(2), (c)(1), (c)(2) introductory text,
(c)(3), (c)(4), (c)(5) and (c)(6) by removing the term ``center'' each
time it appears and by the term ``FQHC''.
0
35. Section 405.2472 is amended by revising paragraph (a) to read as
follows:
Sec. 405.2472 Beneficiary appeals.
* * * * *
(a) The beneficiary is dissatisfied with a MAC's determination
denying a request for payment made on his or her behalf by a RHC or
FQHC;
* * * * *
PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS
0
36. The authority citation for part 410 continues to read as follows:
Authority: Sec. 1102, 1834, 1871, 1881, and 1893 of the Social
Security Act (42 U.S.C. 1302, 1395m, 1395hh, and 1395ddd).
0
37. Section 410.152 is amended by revising paragraph (f) to read as
follows:
Sec. 410.152 Amounts of payment.
* * * * *
(f) Amount of payment: Rural health clinic (RHC) and Federally
qualified health center (FQHC) services. Medicare Part B pays, for
services by a participating RHC or FQHC that is authorized to bill
under the reasonable cost system, 80 percent of the costs determined
under subpart X of part 405 of this chapter, to the extent those costs
are reasonable and related to the cost of furnishing RHC or FQHC
services or reasonable on the basis of other tests specified by CMS.
* * * * *
PART 491--CERTIFICATION OF CERTAIN HEALTH FACILITIES
0
38. The authority citation for part 491 continues to read as follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302); and sec. 353 of the Public Health Service Act (42 U.S.C.
263a).
0
39. Section 491.8 is amended by revising paragraph (a)(3) to read as
follows:
Sec. 491.8 Staffing and staff responsibilities.
(a) * * *
(3) The physician assistant, nurse practitioner, nurse-midwife,
clinical social worker or clinical psychologist member of the staff may
be the owner or an employee of the clinic or center, or may furnish
services under contract to the clinic or center. In the case of a
clinic, at least one physician assistant or nurse practitioner must be
an employee of the clinic.
* * * * *
PART 493--LABORATORY REQUIREMENTS
0
40. The authority citation for part 493 is revised to read as follows:
Authority: Sec. 353 of the Public Health Service Act, secs.
1102, 1861(e), the sentence following sections 1861(s)(11) through
1861(s)(16) of the Social Security Act (42 U.S.C. 263a, 1302,
1395x(e), the sentence following 1395x(s)(11) through 1395x(s)(16)),
and the Pub. L. 112-202 amendments to 42 U.S.C. 263a.
0
41. Section 493.1 is amended by revising the second sentence to read as
follows:
Sec. 493.1 Basis and scope.
* * * It implements sections 1861(e) and (j), the sentence
following section 1861(s)(13), and 1902(a)(9) of the Social Security
Act, and section 353 of the Public Health Service Act, as amended by
section 2 of the Taking Essential Steps for Testing Act of 2012. * * *
0
42. Section 493.2 is amended by adding the definition of ``Repeat
proficiency testing referral'' in alphabetical order, to read as
follows:
Sec. 493.2 Definitions.
* * * * *
Repeat proficiency testing referral means a second instance in
which a proficiency testing sample, or a portion of a sample, is
referred, for any reason, to another laboratory for analysis prior to
the laboratory's proficiency testing program event cut-off date within
the period of time encompassing the two prior survey cycles (including
initial certification, recertification, or the equivalent for
laboratories surveyed by an approved accreditation organization).
* * * * *
0
43. Section 493.1800 is amended by revising paragraph (a)(2)
introductory text to read as follows:
Sec. 493.1800 Basis and scope.
(a) * * *
(2) The Clinical Laboratory Improvement Act of 1967 (section 353 of
the Public Health Service Act) as amended by CLIA 1988, as amended by
section 2 of the Taking Essential Steps for Testing Act of 2012--
* * * * *
0
44. Section 493.1840 is amended by revising paragraph (b) to read as
follows:
Sec. 493.1840 Suspension, limitation, or revocation of any type of
CLIA certificate.
* * * * *
(b) Adverse action based on improper referrals in proficiency
testing. If CMS determines that a laboratory has intentionally referred
its proficiency testing samples to another laboratory for analysis, CMS
does one of the following:
(1)(i) Revokes the laboratory's CLIA certificate for at least 1
year, prohibits the owner and operator from owning or operating a CLIA-
certified laboratory for at least 1 year, and may impose a civil money
penalty in accordance with Sec. 493.1834(d), if CMS determines that--
(A) A proficiency testing referral is a repeat proficiency testing
referral as defined at Sec. 493.2; or
(B) On or before the proficiency testing event close date, a
laboratory reported proficiency testing results obtained from another
laboratory to the proficiency testing program.
(ii) Following the revocation of a CLIA certificate in accordance
with paragraph (b)(1)(i) of this section, CMS may exempt a laboratory
owner from the generally applicable prohibition on owning or operating
a CLIA-certified laboratory under paragraph (a)(8) of this section on a
laboratory-by-laboratory basis if CMS finds, after review of the
relevant facts and circumstances, that there is no evidence that--
(A) Patients would be put at risk as a result of the owner being
exempted from the ban on a laboratory-by-laboratory basis;
(B) The laboratory for which the owner is to be exempted from the
general ownership ban participated in or was otherwise complicit in the
PT referral of the laboratory that resulted in the revocation; and
(C) The laboratory for which the owner is to be exempted from the
general ownership ban received a PT sample from another laboratory in
the prior two survey cycles, and failed to immediately report such
receipt to CMS or to the appropriate CMS-approved accrediting
organization.
(2) Suspends or limits the CLIA certificate for less than 1 year
based on the criteria in Sec. 493.1804(d) and imposes alternative
sanctions as appropriate, in accordance with Sec. 493.1804(c) and (d),
Sec. 493.1806(c), Sec. 493.1807(b), Sec. 493.1809 and, in the case
of civil money penalties, Sec. 493.1834(d), when CMS determines that
paragraph (b)(1)(i)(A) or (B) of this section does not apply but that
the laboratory obtained test results for the proficiency testing
samples from another laboratory on or before the proficiency testing
event close date. Among other possibilities, alternative
[[Page 25481]]
sanctions will always include a civil money penalty and a directed plan
of correction that includes required training of staff.
(3) Imposes alternative sanctions in accordance with Sec.
493.1804(c) and (d), Sec. 493.1806(c), Sec. 493.1807(b), Sec.
493.1809 and, in the case of civil money penalties, Sec. 493.1834(d),
when CMS determines that paragraph (b)(1)(i) or (2) of this section do
not apply, and a PT referral has occurred, but no test results are
received prior to the event close date by the referring laboratory from
the laboratory that received the referral. Among other possibilities,
alternative sanctions will always include a civil money penalty and a
directed plan of correction that includes required training of staff.
* * * * *
Dated: April 3, 2014.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
Approved: April 9, 2014.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
Note: The following Addendum will not appear in the Code of
Federal Regulations.
Addendum: FQHC Geographic Adjustment Factors (FQHC GAFs)
As described in section II.C.2. of this final rule with comment
period, we used the CY 2015 GPCI values and cost share weights, as
published in the CY 2014 PFS final rule with comment period, to model
the geographic adjustments for the FQHC PPS rates. The FQHC GAFs that
will be used for payment under the FQHC PPS will be adapted from the
GPCIs used to adjust payment under the PFS for that same period.
The 2014 FQHC GAFs in the following table are adapted from the CY
2014 PFS GPCIs, as finalized in the CY 2014 PFS final rule with comment
period. The 2014 FQHC GAFs are the values that will be used to adjust
payment under the FQHC PPS for the period of October 1 through December
31, 2014. The 2014 FQHC GAFs in the following table do not reflect the
1.0 floor on the PFS work GPCI that is effective from January 1, 2014,
through March 31, 2014, which was authorized by the Pathway for SGR
Reform Act of 2013.
The 2015 FQHC GAFs in the following table are adapted from the CY
2015 PFS GPCIs, as finalized in the CY 2014 PFS final rule with comment
period. The 2015 FQHC GAFs listed were used to model the geographic
adjustments for the FQHC PPS rates. Under current law and regulation,
these same values would be used to adjust payments under the FQHC PPS
during CY 2015.
We note that updates to the PFS GPCIs due to changes in law or
implemented through regulation would also apply to the FQHC GAFs, such
as changes to the CY 2015 PFS GPCIs that may be included in the final
CY 2015 PFS rule. The FQHC GAFs would be re-calculated and updated
through program instruction so that they remain consistent with the PFS
GPCIs.
------------------------------------------------------------------------
Locality name 2014 FQHC GAF 2015 FQHC GAF
------------------------------------------------------------------------
1 Alabama............................... 0.933 0.936
2 Alaska................................ 1.307 1.316
3 Arizona............................... 0.985 0.993
4 Arkansas.............................. 0.920 0.920
5 Anaheim/Santa Ana, CA................. 1.123 1.120
6 Los Angeles, CA....................... 1.096 1.100
7 Marin/Napa/Solano, CA................. 1.154 1.165
8 Oakland/Berkeley, CA.................. 1.152 1.154
9 San Francisco, CA..................... 1.216 1.224
10 San Mateo, CA........................ 1.210 1.216
11 Santa Clara, CA...................... 1.204 1.209
12 Ventura, CA.......................... 1.105 1.100
13 Rest of California................... 1.053 1.053
14 Colorado............................. 1.003 1.005
15 Connecticut.......................... 1.067 1.069
16 DC + MD/VA Suburbs................... 1.121 1.123
17 Delaware............................. 1.024 1.021
18 Fort Lauderdale, FL.................. 1.014 1.006
19 Miami, FL............................ 1.017 1.011
20 Rest of Florida...................... 0.973 0.971
21 Atlanta, GA.......................... 1.005 1.002
22 Rest of Georgia...................... 0.940 0.940
23 Hawaii/Guam.......................... 1.075 1.077
24 Idaho................................ 0.935 0.930
25 Chicago, IL.......................... 1.033 1.026
26 East St. Louis, IL................... 0.962 0.961
27 Suburban Chicago, IL................. 1.041 1.033
28 Rest of Illinois..................... 0.944 0.944
29 Indiana.............................. 0.948 0.948
30 Iowa................................. 0.929 0.933
31 Kansas............................... 0.933 0.935
32 Kentucky............................. 0.925 0.926
33 New Orleans, LA...................... 0.983 0.986
34 Rest of Louisiana.................... 0.930 0.935
35 Southern Maine....................... 0.998 0.994
36 Rest of Maine........................ 0.940 0.944
37 Baltimore/Surr. Cntys, MD............ 1.059 1.058
38 Rest of Maryland..................... 1.024 1.025
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39 Metropolitan Boston.................. 1.082 1.085
40 Rest of Massachusetts................ 1.038 1.040
41 Detroit, MI.......................... 1.010 0.996
42 Rest of Michigan..................... 0.957 0.954
43 Minnesota............................ 1.005 1.006
44 Mississippi.......................... 0.916 0.914
45 Metropolitan Kansas City, MO......... 0.968 0.968
46 Metropolitan St Louis, MO............ 0.975 0.972
47 Rest of Missouri..................... 0.905 0.903
48 Montana.............................. 0.974 0.977
49 Nebraska............................. 0.938 0.939
50 Nevada............................... 1.026 1.027
51 New Hampshire........................ 1.021 1.027
52 Northern NJ.......................... 1.109 1.107
53 Rest of New Jersey................... 1.071 1.072
54 New Mexico........................... 0.955 0.954
55 Manhattan, NY........................ 1.108 1.106
56 NYC Suburbs/Long I., NY.............. 1.124 1.122
57 Poughkpsie/N NYC Suburbs, NY......... 1.039 1.040
58 Queens, NY........................... 1.123 1.121
59 Rest of New York..................... 0.966 0.967
60 North Carolina....................... 0.953 0.956
61 North Dakota......................... 0.982 0.981
62 Ohio................................. 0.959 0.953
63 Oklahoma............................. 0.913 0.919
64 Portland, OR......................... 1.025 1.026
65 Rest of Oregon....................... 0.975 0.978
66 Metropolitan Philadelphia, PA........ 1.044 1.052
67 Rest of Pennsylvania................. 0.957 0.962
68 Puerto Rico.......................... 0.808 0.816
69 Rhode Island......................... 1.035 1.037
70 South Carolina....................... 0.946 0.946
71 South Dakota......................... 0.974 0.976
72 Tennessee............................ 0.937 0.936
73 Austin, TX........................... 1.002 1.008
74 Beaumont, TX......................... 0.942 0.947
75 Brazoria, TX......................... 1.002 1.005
76 Dallas, TX........................... 1.014 1.014
77 Fort Worth, TX....................... 0.995 1.000
78 Galveston, TX........................ 1.010 1.016
79 Houston, TX.......................... 1.009 1.013
80 Rest of Texas........................ 0.953 0.957
81 Utah................................. 0.946 0.946
82 Vermont.............................. 0.992 0.992
83 Virginia............................. 0.986 0.987
84 Virgin Islands....................... 1.001 1.001
85 Seattle (King Cnty), WA.............. 1.084 1.086
86 Rest of Washington................... 1.004 1.005
87 West Virginia........................ 0.901 0.902
88 Wisconsin............................ 0.973 0.970
89 Wyoming.............................. 0.989 0.992
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[FR Doc. 2014-09908 Filed 4-29-14; 4:15 pm]
BILLING CODE 4120-01-P