Subcommittee on Health Center Finance

Categories: Accounts Receivable, Billing, CHC, FQHC, Industry News

November 4, 2013

FQHC Medicare – Program Assistance Letter 2011-04

As we all know Medicare is growing and is expected to do so for years to come. In the FQHC world, Medicare accounts for just shy of 10% of revenues or $750 million in 2010. Outside of CHCs, Medicare is the undisputed behemoth of the healthcare industry. FQHCs make up roughly 1% of the annual disbursements from this payer. While this may seem inconsequential to some, this fact presents both opportunities and areas of caution for our industry. In one of the latest Program Assistance Letters (PAL), HRSA details the steps for FQHC and look a like organizations to enroll and bill claims to Medicare. This document can be found at http://bphc.hrsa.gov/policiesregulations/policies/pal201104.html . While the document is quite detailed allow me to offer a brief summary.

FQHC Medicare – Program Assistance Letter 2011-04
As we all know Medicare is growing and is expected to do so for years to come. In the FQHC world, Medicare accounts for just shy of 10% of revenues or $750 million in 2010. Outside of CHCs, Medicare is the undisputed behemoth of the healthcare industry. FQHCs make up roughly 1% of the annual disbursements from this payer. While this may seem inconsequential to some, this fact presents both opportunities and areas of caution for our industry. In one of the latest Program Assistance Letters (PAL), HRSA details the steps for FQHC and look a like organizations to enroll and bill claims to Medicare. This document can be found at http://bphc.hrsa.gov/policiesregulations/policies/pal201104.html . While the document is quite detailed allow me to offer a brief summary.

How Medicare Reimburses FQHCs
The document explains how an FQHC organization is defined in the eyes of the CMS. While important the attendees understand this definition, more interesting is the explanation of current reimbursement methods. Discussion includes the all inclusive rate and upper payment limit. Incidentally more than 75% of FQHC organizations are currently reimbursed at this upper payment limit.
The PAL does touch on the fact that organization can be reimbursed outside of the all-inclusive rate in some clinical circumstances. The document lists some preventative services and the technical component of limited other procedures. Additional research is needed to determine which services are eligible for reimbursement outside of the all inclusive rate at your organization.

Enrollment and Effective Dates
After receiving either FQHC or look a like status, an organization must then begin the process of becoming a Medicare provider. While the PAL does not review this process is great detail, FQHC organizations are required to complete the 855 form. While appearing to be a daunting task to complete, the FQHC can find assistance in its completion and ensure all accompanying documentation is attached. As one might expect time is of the essence as the ability to bill claims and receive reimbursement is based on the successful submission of the 855 form. The PAL details the process the approval takes and suggests the FQHC remain in contact and monitor the applications progress thru the process till approved. This approval date serves as the starting point for FQHCs to submit claims for payment. No backdating of the applications nor billing for visits prior to the approval date are allowed.
Included in the healthcare reform legislation is a new fee for Medicare applications of $500. An organization may apply to waive the fee by attaching a cover letter detailing the hardship it will place on the organization. As the fee was imposed less than 6 months ago no information is yet available on the success of FQHC organizations attempting to waive the fee

Which Organizational Units Must Enroll
The PAL delves into this issue is great detail. The standing policy is for FQHCs to enroll each clinic site as a “provider” for Medicare. The document offers supplemental CMS documentation stipulating that all FQHCs must comply. Administrators should discuss this important clarification with their finance and billing staffs upon return from the conference. The PAL also offers guidance on seasonal/temporary clinics and even mobile units. Please note that the PAL listed the possible penalties for non-compliance in bold in the document. While the requirement to register each site individually, a single cost report covering all sites is allowable.

Change to local Medicare Administrative Contractors
In the past few years a significant transition has occurred in relation to FQHC Medicare claims submission. For years all FQHC organizations submitted claims to one entity; NGS. In 2009, CMS issued new rules governing the processing of Medicare claims to new regional contractors or MACs as these organizations are known in the industry. These MACs process all claims in a geographic area regardless of the submitting provider, be it a hospital, home health care agency or FQHC. While a positive step in reducing administrative challenges for Medicare as a whole, the change affected FQHCs by mandating their claims be processed locally. As FQHCs nationally make up so few of the total Medicare claims volume, the new MAC carriers are not as experienced in the unique reimbursement methodology of our industry.

New FQHC enrollment
As of 2009 all new FQHC organizations must contract with their local MAC. Existing FQHCs are often utilizing a hybrid approach of NGS and local MACs for their sites. This is a temporary situation will be solved once the transition is complete. Several sites are currently fully transitioned and utilizing the MAC for all claims activity. These include Arizona, North and South Dakota, Wyoming, Montana and Utah. The PAL documents the process and in detail including where to find your local MAC and where the application and supporting documentation should be addressed.

Requirements to Update Medicare Information within 30-90 Days
The PAL delves into the often-confusing issue of when to update CMS as changes occur in the FQHC. The document clearly delineates the requirement of an FQHC to notify Medicare should changes occur with board members, legal business name, change in the location of clinics, legal issues and if the organization has contracted with a billing agency. Specifically the document lists the need to notify Medicare within 30 days of a change in board membership while most other instances of change offer a 90-day notification window. Again the PAL lists the administrative penalties for non compliance in bold font.

The Program Assistance Letter offers a great deal of clarity for FQHC organizations in how to properly enroll as a Medicare provider, instances in which an organization needs to notify CMS of updates to the status as a provider and the need for each clinic to be registered as a service location. It offers administrators the details needed to ensure their organizations could bill and be reimbursement as an FQHC provider. The PAL clears the previously cloudy process into greater clarity.

Subcommittee on Health Center Finance
08/26/2011
Robert B. Skeffington, CHBME
Priority Management Group, Inc.
700 School Street
Pawtucket, RI 02860