No. 26854 (New Rule): R414-9. Federally Qualified Health Centers

DAR File No.: 26854
Filed: 12/15/2003, 05:19
Received by: NL

 

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule was requested by Federally Qualified Health Centers (FQHC) to allow more flexibility in reimbursement and to ensure that all FQHC allowable costs are being reimbursed, as required by law. It also reflects a change in the State Plan relating to FQHC reimbursement.

 

Summary of the rule or change:

This is a new rule that creates an alternative method of payment for Federally Qualified Health Centers.

 

State statutory or constitutional authorization for this rule:

Sections 26-1-5, 26-18-2.1, and 26-18-2.3

 

This rule or change incorporates by reference the following material:

42 CFR 405.2401, 2002 ed

 

Anticipated cost or savings to:

the state budget:

There is no impact to the state budget because Federally Qualified Health Centers are reimbursed for their actual costs as opposed to a fee-for-service percentage of charges. In as much as the Department made periodic payments to FQHCs under the existing system, the addition of an alternate payment system that may more closely reflect actual costs should not impose additional costs to the state.

 

local governments:

There is no budget impact to local governments because Federally Qualified Health Centers are not affiliated with, operated by, or in competition with local governments.

 

other persons:

Federally Qualified Health Centers are reimbursed for their actual costs as opposed to a fee-for-service percentage of charges. This rulemaking gives those centers more options to assure proper, timely payment.

 

Compliance costs for affected persons:

There are no compliance costs for affected persons because the Federally Qualified Health Centers will continue to be reimbursed for their actual costs.

 

Comments by the department head on the fiscal impact the rule may have on businesses:

This rulemaking was requested by Federally Qualified Health Centers to allow more flexibility in reimbursement and to ensure that all FQHC allowable costs are being reimbursed, as required by law. It should have a positive impact on these Centers with little impact on the Medicaid budget. Scott D. Williams, Executive Director.

 

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Health
Health Care Financing, Coverage and Reimbursement Policy
CANNON HEALTH BLDG
288 N 1460 W
SALT LAKE CITY UT 84116-3231

 

Direct questions regarding this rule to:

Ross Martin at the above address, by phone at 801-538-6592, by FAX at 801-538-6099, or by Internet E-mail at [e-mail]

 

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

02/02/2004

 

This rule may become effective on:

02/03/2004

 

Authorized by:

Scott D. Williams, Executive Director

 

 

RULE TEXT

R414. Health, Health Care Financing, Coverage and Reimbursement Policy.

R414-9. Federally Qualified Health Centers.

R414-9-1. Introduction and Authority.

(1) This rule establishes Medicaid payment methodologies for federally qualified health centers (FQHCs).

(2) This rule is authorized by 42 CFR Subpart X, and Sections 26-1-5, 26-18-2.1, 26-18-2.3, UCA.

 

R414-9-2. Definitions.

In addition to the definitions in R414-1, the following definitions apply to this rule:

(1) "Federally Qualified Health Center" means an entity that is a Federally Qualified Health Center under the provisions of 42 CFR Subpart X.

(2) "Rural Health Clinic" means an entity that is a Rural Health Clinic under the provisions of 42 CFR Subpart X.

 

R414-9-3. Payment Choices for FQHCs.

(1) An FQHC may elect to be paid under either the Prospective Payment Method (PPS) as described in R414-9-4 or the Alternate Payment Method (APM) as described in R414-9-5.

(2) If an FQHC elects to change its payment method in subsequent years, it must elect to do so no later than thirty days prior to the beginning of the FQHC's fiscal year by written notice to the Department.

 

R414-9-4. Prospective Payment System.

The Department pays FQHCs under a Prospective Payment System (PPS) that conforms to the Federal methodology as contained in section 702 of the federal Benefits Improvement and Protection Act of 2001 (BIPA) and 42 CFR 405.2462 through 405.2472, 2002 edition, which are adopted by reference and modified as follows:

(1) The Department makes supplemental payments for the difference between the amounts paid by Managed Care Organizations (MCOs) that contract with FQHCs and the amounts the FQHCs are entitled to under the PPS as they are estimated and paid quarterly to the FQHCs. The Department makes quarterly interim payments no later than thirty days after the end of the quarter based on the most recent prior annual reconciliation. As necessary, the Department settles annual reconciliations with each FQHC.

(2) The Department requires FQHCs to contract with local Mental Health service (MH) providers that are paid a capitation rate by DHCF to avoid duplicate payments. FQHC MH charges are billed to MH providers which reimburse FQHCs on the basis of the MH provider fee schedule.

(3) For FQHCs servicing MCOs and capitated MH organizations, the Department annually determines and settles the difference between FQHC encounter rate and the MCO, MH, and third party liability reimbursement.

 

R414-9-5. Alternate Payment Method.

(1) The Department adopts an Alternate Payment Method (APM). An FQHC is required to calculate the Ratio of Beneficiary Charges to Total Charges Applied to Allowable Cost as part of its agreement with the federal government. As part of that calculation, it allocates allowable costs to Medicaid. The Department multiplies the Medicaid allowable costs to by the Medicaid charge percentage to determine the amount to pay. The Department makes interim payments on the basis of billed charges from the FQHC, which reduce the annual settlement amount. Third party liability collections by the FQHC for Medicaid patients also reduce the final cost settlements.

(2) An FQHC participating in the APM must provide the Department annual cost reports and other cost information required by the Department necessary to calculate the annual settlement within ninety days from the close of its fiscal year, including its calculations of its anticipated settlement. The Department reviews submitted cost reports and provides a preliminary payment, if applicable, to FQHCs. Within six months after the end of the FQHC's fiscal year, the Department conducts a review or audit of submitted cost reports and makes a final settlement. This allow for inclusion of late filed claims and adjustments processed after the submitted cost report was prepared. If the Department overpaid an FQHC, the FQHC must repay the overpayment. If the Department underpaid an FQHC, the Department shall pay the FQHC the underpaid amount.

(3) The Department compares the APM reimbursements with the reimbursements calculated using the PPS methodology described in R414-9-4 and pays the greater amount to the FQHC.

 

R414-9-6. Rural Health Clinics.

(1) The Department reimburses all RHCs through a Prospective Payment System (PPS) that conforms to the Federal methodology as contained in section 702 of the federal Benefits Improvement and Protection Act of 2001 (BIPA) and 42 CFR 405.2462 through 405.2472.

(2) The Department pays each RHC the amount, on a per visit basis, equal to the amount paid in the previous RHC fiscal year, increased by the percentage increase in the Medicare economic index for primary care services, and adjusted to take into account any increase or decrease in the scope of services furnished by the RHC during that fiscal year.

(3) For newly qualified RHCs after State fiscal year 2000, the Department establishes initial payments either by reference to payments to other RHCs in the same or adjacent areas with similar caseloads, or in the absence of other RHCs, by cost reporting methods. After the initial year, payment is set using the Medicare economic index methods used for other RHCs, and adjustments for increases or decreases in the scope of service furnished by the RHC during that fiscal year.

 

KEY: Medicaid, facility, reimbursement

26-1-5

26-18-3