[Federal Register Volume 61, Number 65 (Wednesday, April 3, 1996)]
[Rules and Regulations]
[Pages 14639-14658]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7787]
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[[Page 14640]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Parts 405 and 491
[BPD-728-F]
RIN 0938-AF14
Medicare Program; Payment for Federally Qualified Health Center
Services
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Final rule.
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SUMMARY: These regulations establish, as a Medicare benefit, outpatient
services furnished by a Federally Qualified Health Center (FQHC) and
establish requirements for coverage and payment of FQHC services. An
FQHC is one of the following: An entity that is receiving a grant under
section 329, 330, or 340 of the Public Health Service (PHS) Act; a non-
grant receiving entity that is determined by the Secretary to meet the
PHS Act requirements for receiving a grant; certain native American
health centers; and certain facilities that have previously been
identified as Federally funded health centers.
These regulations implement certain provisions of the Omnibus
Budget Reconciliation Act of 1990 and the Omnibus Budget Reconciliation
Act of 1993.
EFFECTIVE DATE: These regulations are effective on May 3, 1996.
FOR FURTHER INFORMATION CONTACT: Helen Klein, (410) 786-4641 (FQHC
coverage issues) Randy Ricktor, (410) 786-5650 (FQHC payment issues)
SUPPLEMENTARY INFORMATION:
I. Background
On June 12, 1992, we published in the Federal Register, at 57 FR
24961, a final rule with a comment period, which established a new
Medicare benefit, outpatient services furnished by FQHCs. This benefit
is authorized by section 4161(a) of the Omnibus Budget Reconciliation
Act of 1990 (OBRA '90), which amends section 1861(aa) of the Social
Security Act (the Act). The statutory provisions are effective on
October 1, 1991.
OBRA '90 defines an FQHC as an entity that is receiving a grant
under section 329, 330, or 340 of the PHS Act; 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 329, 330,
or 340 of the PHS Act; based on the recommendation of the Health
Resources and Services Administration (HRSA) within the Department of
Health and Human Services, is determined by the Secretary to meet the
requirements for receiving such a grant; or was treated by the
Secretary, for purposes of Medicare Part B, as a Federally funded
health center (FFHC) as of January 1, 1990.
Subsequent to the June 12, 1992 regulations, the Omnibus Budget
Reconciliation Act of 1993 (OBRA '93) further amended section 1861(aa)
of the Act relating to the definition of FQHCs. Section 13556 of OBRA
'93 expanded the definition of FQHCs to include outpatient programs
operated by tribes, tribal organizations under the Indian Self-
Determination Act, or by an urban Indian organization receiving funds
under Title V of the Indian Health Care Improvement Act. This provision
was effective as if it had been included in the OBRA '90 legislation.
Thus, such organizations may qualify for FQHC status, and under certain
circumstances, as early as October 1, 1991. We are implementing this
provision in a separate Federal Register rule.
The Act defines FQHC services as the same type of services provided
by rural health clinics (RHCs) under the Medicare program, plus
preventive primary health services.
II. Provisions of the Final Rule With Comment Period
The rule described in considerable detail the requirements an
entity must meet to qualify as an FQHC, what services the FQHC must
furnish, and the methodology we will use to determine how much we pay
an FQHC. We provided that an entity that meets the requirements must
enter into a signed agreement with us and must terminate any other
Medicare provider agreement.
Under provisions of our final rule, services that are payable under
the Medicare program when furnished by an FQHC are the same outpatient
services that are currently covered as RHC services, plus preventive
services. FQHC services do not include services furnished to hospital
patients. RHC services include services furnished by physicians,
physician assistants, nurse practitioners, nurse-midwives, qualified
clinical psychologists, clinical social workers, and services and
supplies furnished incident to professional services of these
practitioners. In certain home health agency shortage areas, RHC
services may also include visiting nurses' services.
Preventive services include medical social services, nutritional
assessment and referral, preventive health education, children's eye
and ear examinations, prenatal and post-partum care, well child care,
including periodic screening, immunizations, voluntary family planning
services, and services outlined in the recommendations of the U.S.
Preventive Services Task Force for patients age 65 and older.
Preventive services do not include eyeglasses, hearing aids, group or
mass information programs or health education classes, or preventive
dental services. Preventive services covered under special provisions
of Medicare, such as screening mammography, may be provided by an FQHC
only if the center meets the special provisions that govern those
benefits.
Our regulations state that qualified clinical psychologists and
clinical social workers who furnish FQHC services must be legally
authorized to perform those services under State law. We clarified that
nurse-midwives, clinical social workers, and clinical psychologists are
employees of the FQHC.
Payment provisions for FQHCs parallel the provisions for payment of
RHCs. We pay freestanding FQHCs on an all-inclusive rate basis, subject
to a test of reasonableness. We apply payment limits to the all-
inclusive rate per visit. We pay provider-based FQHCs in accordance
with 42 CFR parts 405 and 413 of the Medicare regulations. For
additional description, see the June 12, 1992 final rule (57 FR 24961).
Issues regarding the interaction between managed care and Medicare
entities, such as FQHCs, are under consideration by us, and therefore,
not addressed in this final rule.
III. Analysis of and Responses to Public Comments
In response to the publication of the final rule with a comment
period in the Federal Register on June 12, 1992, we received 48 public
comments. The comments were submitted by a wide variety of health care
centers, consultants and local and national organizations. We reviewed
all the comments, and the comments and our responses are in the order
that the issues appeared in the June 12, 1992 rule.
Qualification Requirements
Comment: A few commenters objected to application of the conditions
for coverage requirements in 42 CFR part 491 to FQHCs and believed it
is without legal basis. They noted that the language in the Medicaid
law is nearly identical, and Medicaid does not place health and safety
requirements on FQHCs. The commenters argued that by virtue of
receiving grants under the PHS Act, these centers already must meet
[[Page 14641]]
stringent standards established by HRSA and further standards are
unnecessary.
Response: When the Congress created the FQHC benefit, it envisioned
that FQHC services would be provided under the same conditions as RHCs
services are furnished. Thus, FQHC services are defined in section
1861(aa)(3)(A) of the Act as ``services of the type described in
subparagraphs (A) through (C) of paragraph 1 of section 1861(aa).'' As
a result, the services of FQHCs are to be identical to those of RHCs.
Similarly, section 1861(aa)(3)(B) of the Act provides that ``any
reference to a rural health clinic or a physician described in
paragraph (2)(B) is deemed a reference to a Federally qualified health
center, respectively.'' This means that physician-directed FQHCs are to
be treated identically to their RHC counterparts. Finally, section
1861(aa)(5) of the Act provides the same definitions of physician
assistants, nurse practitioners and clinical nurse specialists for RHCs
and FQHCs.
These provisions of the Act indicate that the Congress built upon
the statutory and regulatory provisions for coverage and payment of
RHCs and intended that we use those provisions as a model for the FQHC
program. Therefore, we believe that the Congress expected us to apply
the same rules to FQHCs that we apply to RHC services and to
professionals providing RHC services.
Based on the above, we believe there is a rationale for applying
all or part of the RHC requirements to the services furnished in FQHCs.
While HRSA may monitor the health and safety standards for a subset of
FQHCs that are grantees, for some FQHCs (in other words, ``look-
alikes,'' which are entities that are not receiving grants under the
PHS Act but meet grant requirements, and some former FFHCs), there is
no other alternative for monitoring the quality of the service
furnished. Without our oversight, there would be no assurance that
facilities furnish safe services.
In addition, the Congress has given us the responsibility to
establish standards to ensure the health and safety of beneficiaries in
all other statutorily-created types of facilities, and it would be
extraordinary to interpret the law as preventing application of such
standards in regard to FQHCs. There is nothing in the law that would
support the view that the Congress intended for us to be without the
power to assure the safety and efficacy of FQHC services.
We believe the health and safety requirements we established are
minimal and are not a burden on the vast majority of centers that want
to provide high quality care. In fact, we informally surveyed RHCs and
FQHCs regarding the difficulties involved in participating in the
Medicare program, and no one noted concerns with the health and safety
requirements we extended to FQHCs. Likewise, no commenters on this
document raised concerns with any particular requirement. However,
should further correspondence indicate documented difficulties with a
specific condition, we will be open to considering refinement, as
appropriate.
Finally, we note that we are implementing the requirements in a
fashion that is as administratively simple as possible. That is, we are
not surveying potential FQHCs prior to participation or on a routine
basis. Rather, centers merely attest to meeting the requirements. The
standards thus establish a set of expectations for FQHCs to monitor
themselves and provide an enforcement mechanism for those very few
centers that do not take adequate health and safety precautions. In the
absence of such health and safety standards, we would have no means to
protect beneficiaries from potentially serious health and safety
threats that have materialized with other types of providers and
suppliers over time. Given the statutory provision referencing RHC
procedures, we are confident that the Congress intended that we place
health and safety requirements on FQHCs.
We concede that Medicaid currently has no regulations for FQHCs, so
it is premature to argue that the Medicaid program does not have health
and safety requirements for FQHCs. However, the Medicaid program does
require provider agreements between the State agency and an FQHC before
the Medicaid program pays the FQHC.
Although the Medicare and Medicaid FQHC legislation is similar in
language, the two programs are separate and autonomous. The Medicaid
program is a Federal and State partnership and allows more flexibility
in determining FQHC approval. Since Medicaid regulations have not yet
been issued, we are not in a position to discuss any additional
requirements that may be added.
Comment: Several commenters noted that the statutory provisions for
FQHC eligibility refer to FQHCs using the term ``entity.'' The
regulations require that each site be approved, which the commenters
believed exceeds our statutory authority. If site-specific approval is
maintained, the commenters suggested that we clarify that an entity may
submit combined cost reports and use a combined payment rate for all
sites within that entity.
Response: While we independently approve each site for Medicare
participation and assign it a unique provider number, each site of a
potential FQHC need not independently meet the PHS Act grant
requirements. The fact that a site is within the scope of a grant or
approved look-alike application is sufficient. However, each site must
independently attest to meeting the conditions in part 491 subpart A.
We believe the site specific requirement also has advantages for
Medicare beneficiaries and FQHCs and is supported by law. Section
1861(aa)(2)(K) of the Act gives us the authority to establish standards
to ensure the health and safety of beneficiaries receiving services at
RHCs, and consequently, we believe, at FQHCs. We believe that
establishing specific requirements for individual site approval allows
us to fulfill this role. If facilities are not independently approved,
it is difficult to determine if each site is adequately meeting the
required health and safety standards.
There are advantages to the FQHC in this policy. The site-specific
approval requirement allows each site in the entity to continue to
operate despite individual problems that may arise in other sites under
the same corporate entity. Corporate entities are typically large
private or public organizations which have, as their organizational
components, facilities that must independently meet the conditions
established in 42 CFR part 491, subpart A. By requiring individual site
approval, all of the sites of an entity are not jeopardized if one site
does not meet health and safety requirements. If we were to use entity-
based approval, as suggested by the commenter, we would not allow an
individual site that continues to meet all of the conditions to provide
FQHC services if another site in that parent entity did not meet the
Medicare safety standards. In addition, requiring site-specific
approval enables us to provide enhanced service to our beneficiaries.
Specifically, we are able to respond to beneficiary requests for the
names and addresses of approved facilities that are providing Medicare
FQHC services.
Although each site within a corporate entity is independently
approved and given a unique Medicare provider number, entities have the
option to file a single consolidated cost report for the entire entity
or individual cost reports for each site within the entity. We provided
instructions in the intermediary and RHC/FQHC manuals
[[Page 14642]]
that address payment for FQHC network entities.
Finally, we do not believe that the law intended that every site
operated by an entity be entitled to FQHC status, especially if the
sites are not within the scope of the PHS Act grant, without
independently qualifying as ``look-alikes.'' Only by using site-
specific approval can we carry out the statutory intent of providing
FQHC status to a site that meets the conditions of the law, while
excluding a site that is part of an entity, but falls outside the scope
of a PHS Act grant or does not otherwise meet the FQHC eligibility
criteria.
Comment: One commenter requested clarification of our position
regarding provider-based FQHCs, which are not receiving grants under
the PHS Act, but meet grant requirements as ``look-alikes.'' The
commenter noted that the definition of a provider-based FQHC as an
integral and subordinate part of a provider and HRSA governance
requirements have prompted some centers to establish independent
governance and yet remain located at or near hospital grounds. The
commenter requested assurance that such co-location would not result in
provider-based designation.
Response: Section 405.2462 defines a provider-based FQHC as a
clinic or center that is an integral and subordinate part of a
hospital, skilled nursing facility, or home health agency participating
in Medicare (that is, a provider of services). The clinic or center is
operated with other departments of the provider under common licensure,
governance, and professional supervision. These stipulations must be
met for us to consider an FQHC as provider-based. Simply being located
in or near a hospital does not qualify an entity as a provider-based
facility. The converse is also true. An entity may be provider-based
despite the fact that it is located outside of the provider. A center
with independent governance cannot be considered a provider-based FQHC.
The basis for HRSA governance requirement is to ensure that the
services that are provided are responsive to the community. Therefore,
HRSA requires that a center approved under sections 329 and 330 of the
PHS Act have a governing board, the majority of which are users of the
facility.
Comment: One commenter urged that we review the definition and
scope of authority of community governing boards in FQHCs. The
commenter noted that the requirement for community governing boards
excludes from the FQHC benefit clinic facilities that are owned by
academic health science centers.
Response: The definition and scope of authority of community
governing boards are found in sections 329(f)(3)(G) and 330(e)(3)(G) of
the PHS Act. The sections specify that the center has established a
governing board which (1) is composed of individuals, a majority of
whom are being served by the center and who, as a group, represent the
individuals being served by the center, and (2) selects the services to
be provided by the center, schedules the hours during which such
services will be provided, approves the center's annual budget,
approves the selection of a director for the center, and, except in the
case of a public center, establishes general policies for the center.
The purpose of an FQHC is to provide community-based, family-
oriented primary care. The statutory governance requirement ensures
that the services that are provided are responsive to the health needs
and concerns of the community. An academic health science center can
qualify as an FQHC if its board meets the requirements of sections 329,
330 or 340 of the PHS Act and the provisions of this regulation.
Comment: One commenter noted that Sec. 491.5 requires that a center
be located in a rural or urban area that is designated as a shortage
area. The commenter requested that shortage area be clearly defined in
the regulations. Several commenters noted that the PHS law does not
require the FQHC to be located in a medically underserved area, but
merely to document that it serves a medically underserved population.
Response: Section 491.2 defines a shortage area as a geographic
area designated by the Department as having either a shortage of
personal health services (under section 1302 of the PHS Act) or a
shortage of primary medical care manpower (under section 332 of that
Act). The designation of shortage areas is quite complex and is handled
by HRSA.
Section 491.5(d) specifies the criteria for designation of shortage
areas. Factors considered include the ratio of primary care physicians
practicing in the area to the resident population and the infant
mortality rate.
The commenter is correct in that HRSA does not require that the
FQHC be located in a shortage area. Rather HRSA requires that the FQHC
either be located in a medically underserved area (MUA) or serve a
medically underserved population (MUP).
According to 42 CFR 51c.102(e), an MUP is defined as the population
of an urban or rural area designated by the Secretary as an area with a
shortage of personal health services. This designation was developed
because there were populations that required medical care but were
located in areas that did not receive MUA designation. The Secretary
analyzes the demographics and medical manpower of the population to
determine whether or not the population should receive designation.
Therefore, an MUP can be located in an area that is not an MUA.
In response to the concern expressed by this commenter, we are
revising Sec. 491.5(a) to specify that an FQHC may be located in a
shortage area or may serve a medically underserved population. We are
also adding a new paragraph (e) that defines medically underserved
population in the same way as HRSA does, as indicated above.
Comment: Two commenters objected to application of the ``four walls
test'' in Sec. 491.5 to an FQHC. They believed that this provision
limits cost-based payment to only those services provided at the clinic
or center site. The commenters noted that it may be difficult to have
some specialists come to the center site to provide care and
recommended that all services furnished under arrangements with the
FQHC be payable on a cost basis.
Response: The ``four walls test'' requires that the objects,
equipment and supplies necessary for the provision of the services
furnished directly by the clinic or center be housed in a permanent
structure or mobile unit that has fixed, scheduled locations. The
requirement that the clinic or center be housed in a permanent
structure ensures that the equipment, records, supplies and whatever
else is necessary to provide the defined services are in one permanent
place.
The ``four walls test'' is not a requirement that limits cost-based
payment to only those services provided at the clinic or center, and it
does not restrict a physician from providing services off-site. A
physician, including any specialist under contract to the FQHC, can
have an agreement with the FQHC to provide FQHC services off-site.
For reasons discussed later in this preamble, we have reconsidered
our policy on contracting for professional staff members other than
physicians. FQHCs may provide services of physician assistants, nurse
practitioners and other professionals under contract. These
professionals may provide services in skilled nursing facilities or in
the homes of beneficiaries. However, an FQHC may not bill services
provided to hospital patients as FQHC services.
Comment: Several commenters noted that Sec. 491.8 requires that
nurse practitioners or physician assistants be
[[Page 14643]]
available to furnish patient care services at least 60 percent of the
time. However, the Omnibus Budget Reconciliation Act of 1989 (OBRA '89)
changed the requirement to 50 percent. They recommended that we revise
the regulation to state that such coverage is required 50 percent of
the time.
Response: We note that the referenced RHC requirements pertaining
to staffing mix percentages in Sec. 491.8 do not apply to FQHCs. When
the FQHC regulations were published on June 12, 1992, the existing RHC
regulations had not been updated to include changes from the Omnibus
Budget Reconciliation Act of 1987 (OBRA '87), OBRA '89 and OBRA '90. As
a result, the FQHC regulations were incorporated into the existing RHC
regulations, which still reflected earlier statutory thresholds for
such coverage. We are preparing to issue a proposed rule that
incorporates these changes and will update the RHC provisions in
Sec. 491.8 and solicit public comment. We are, however, authorized by
OBRA '90 to issue a final rule for FQHCs that includes only the OBRA
'90 amendments.
Comment: One commenter objected to the exclusion of psychologists
from the list of practitioners in Sec. 491.8(a)(6), which specifies
staff that must be available in order for the center to be open. The
commenter recommended that we revise the regulation to include
specialty providers in all areas of operation of the centers. Further,
the commenter was concerned that the language with regard to medical
direction in Sec. 491.8(b)(1)(i) could be interpreted to require that a
physician may supervise psychological services that are within the
scope of the psychologist to furnish without medical direction.
Response: As noted above, OBRA '90 authorizes us to implement the
FQHC regulations as a final rule. We do not have authority under that
law to modify the RHC provisions without publishing a notice and
soliciting public comment. When the FQHC regulations were published
June 12, 1992, the existing RHC regulations had not been updated to
include any changes in the law. As a result, the regulations concerning
the policy board and medical supervision did not contemplate
involvement of psychologists, as psychologists' services were not RHC
covered services at the time the regulations were promulgated.
Section 1861(ii) of the Act provides coverage for clinical
psychologist services that would otherwise be covered if furnished by a
physician or as incident to a physician's service. In addition, under
this statutory provision clinical psychologists can provide services as
authorized under State law without the supervision of a physician. We
are revising Sec. 491.8(b)(1) to clarify that clinical psychologists
can provide services, as permitted under State law, without the
supervision of a physician in FQHCs.
Comment: Two commenters objected to the requirement in
Sec. 491.9(b)(2) regarding the development of patient care policies.
This paragraph requires that the policy development committee of the
center include at least one member who is not on the center's staff.
They expressed concern that the use of non-staff personnel is an
unnecessary expense and is burdensome. They also believed the
requirement is unnecessary given the level of review already in place
by HRSA for its grantees.
Response: We believe that the provisions of Sec. 491.9(b)(2) are
necessary to ensure the health and safety of beneficiaries. Patient
care policies were developed to provide guidelines on how a facility
will care for its patients. In addition, the policies ensure that the
providers adhere to appropriate procedures and protocols. The
requirement for a non-staff representative to assist in developing
patient care policies is necessary to ensure that the services are
responsive to the needs of the community. The non-staff representative
does not have financial interests in the provider and, as such, will
likely be more objective and unbiased in favor of the provider in the
decision making process. This requirement is intended to ensure that
the concerns of the population served will be paramount and that the
provider will address the specific health needs of the community. Given
the HRSA governance requirement for a constituent majority board, we
believe this requirement will not be burdensome to most FQHCs.
Comment: One commenter objected to annual surveys of RHCs and FQHCs
as wasteful.
Response: We are not planning to conduct routine surveys of FQHCs,
and FQHCs will not be routinely required to submit documentation to
HCFA demonstrating compliance with program requirements. However, we
plan to survey an FQHC if we receive a complaint about a health and
safety issue at the FQHC. During the survey, the FQHC must provide
documentation of compliance with the requirements in part 491.
Comment: Two commenters noted that FQHC grantees are subject to
extensive review by the HRSA on an annual basis. They believed this
review is sufficient to meet any evaluation assurances that should be
necessary. Therefore, the requirement in Sec. 491.11 that a clinic or
center carry out or arrange for an annual evaluation of its total
program should not be applicable to FQHCs.
Response: An FQHC is expected to conduct annual evaluations in
accordance with Sec. 491.11, which specifies what the annual program
evaluation must include and what the evaluation must determine, but it
does not prescribe how the annual program evaluation must be conducted
or the kind of evaluation that must be conducted. The purpose of the
annual evaluation is to evaluate utilization of services, evaluate
compliance with established policies, and determine if changes are
needed. We would expect that every organization would conduct this
self-assessment at least annually regardless of Medicare requirements.
With regard to the concern that HRSA reviews are adequate and, in
support of elimination of this requirement for FQHCs, we note that not
all FQHCs are grantees under the PHS Act; thus, all FQHCs would not be
subject to the HRSA standards. In support of retaining the requirement,
we note that the standard should not be burdensome to the centers
because, to the extent that HRSA reviews cover the scope of the
requirement, additional evaluation and documentation will not be
necessary. Thus, should we survey an FQHC for compliance with part 491
conditions in response to a complaint, documentation submitted to HRSA
for HRSA program purposes would be acceptable as evidence of compliance
with 42 CFR 491.11 if the review included the items specified in the
requirement.
Comment: Another commenter was in favor of annual compliance
reporting and recommended that, to ease administrative burden, HCFA and
HRSA use a single form, and HCFA provide additional details specifying
when such reporting is to be completed and where it is to be forwarded.
Response: We are not requiring annual compliance reporting. FQHCs
must review themselves, and they must maintain documentation of their
review in the event that we choose to survey a center. We will evaluate
an FQHC only if we discover a problem or receive a complaint. In such
cases, the review would encompass only the matter addressed in the
Medicare regulations, but we would coordinate the review with HRSA to
avoid duplicative efforts. Section 491.11 requires that an FQHC perform
an annual self-evaluation of its program. We believe this is a
reasonable requirement so that an FQHC assesses utilization of
services, compliance with
[[Page 14644]]
established policies, and determines if changes are needed.
Comment: One commenter wanted to know when a listing of FQHCs would
be available.
Response: There is a list of FQHCs currently available from the
Health Standards and Quality Bureau, System Management Branch, 6325
Security Blvd., Baltimore, Maryland, 21207. The charge for the list is
$25.00. For more information, you may telephone Mike Moran at (410)
597-5851.
Content and Term of the Agreement
Comment: One commenter requested that we clarify the
recertification process for FQHCs.
Response: For Medicare purposes, there will be no routine
recertification of FQHCs. Once a facility is approved, it will remain a
Medicare-participating FQHC until termination of the agreement, as
provided in Sec. 405.2436. We plan to survey an FQHC if we receive a
complaint about a health and safety issue at an FQHC or if a health and
safety problem is identified in another way.
HRSA has an annual process to determine eligibility for FQHC
status. For grantees, this consists of an application process for
funding, and for look-alikes, this consists of an annual application
and review, either of which could result in HRSA recommending
decertification of the FQHC to HCFA.
Comment: Two commenters noted that the RHC law and regulations
provide that an RHC retains its status even if the area in which it is
located loses its rural shortage area designation. They requested
similar protection for FQHCs.
Response: Section 1861(aa)(2)(K) of the Act specifies that an RHC
may maintain its approval even if the area in which it is located loses
its rural shortage area designation. In accordance with the Act,
Sec. 491.5(b)(1) allows an RHC to retain its approval. The Act,
however, does not include a similar provision for an FQHC.
We note that the current language in the regulation does not
clearly state that the protection for area designation applies
exclusively to RHCs. Therefore, we are revising Sec. 491.5(b)(1) to
clarify this.
Comment: One commenter objected to the requirement that centers
must terminate other provider agreements prior to, or simultaneous
with, signing an FQHC participation agreement. The commenter believed
that there is no statutory support for this requirement, and this
requirement may adversely affect some centers. One example cited by the
commenter is that an RHC could be adversely affected if it gave up its
RHC status to become an FQHC and the area is redesignated from
medically underserved because the protection afforded an RHC is not
offered to an FQHC.
Response: We are revising Sec. 405.2430(a)(1)(iii) to clarify that
a freestanding FQHC must terminate other provider agreements for
entities that operate at the same time as the FQHC. The intent of this
provision is to prohibit an entity from using the same space, staff,
and resources simultaneously as two distinct provider types. We believe
this provision is necessary to ensure the health and safety of our
beneficiaries and to avoid program abuse.
We do not intend by this provision that an FQHC and another
provider/supplier type may not be commonly owned or housed in the same
building. Rather, the intent of the provision limiting freestanding
FQHCs to a single provider agreement is to prevent the entity from
using the same staff, space, and resources for two or more different
provider types at the same time.
We believe that this provision is necessary to ensure the health
and safety of our beneficiaries. That is, if an FQHC is using the same
space, staff and resources as two different providers at the same time,
there is no assurance that the staff will be devoting its efforts to
the FQHC operation and not the other provider type. Without these
assurances, it is possible that beneficiaries could come to the FQHC
expecting to receive adequate health care, only to learn that the other
provider type is using the FQHC's resources at that time.
In addition, we established a very simplified cost report mechanism
for FQHCs. This cost report does not permit the allocation of costs
among multiple provider types. If we were to allow the simultaneous use
of the same space, staff and resources as multiple providers, we would
need to develop a more sophisticated cost report. A more complicated
report could place an administrative burden on the centers, the vast
majority of which do not wish to engage in multiple provider
activities.
We note that the Medicare program does not generally allow the
concurrent use of a facility as multiple health care providers. For
example, the regulations require that ambulatory surgical centers be
used exclusively for providing surgery to patients who do not require
hospitalization. Furthermore, the skilled nursing facility regulations
require separate space, staff and resources (or distinct part) for its
non-certified portion. Thus, we believe there is ample precedent for
the requirement we are establishing.
Coinsurance
Comment: One commenter noted the distinction between the basis of
coinsurance (charges) and the basis of payment (all inclusive rate) and
asked for clarification.
Response: The commenter is correct. There is a difference between
the basis of coinsurance and the basis of payment. In accordance with
section 1833(a)(3) of the Act, payment for FQHC services may not exceed
80 percent of its cost. Section 1866(a)(2)(A) of the Act, referred to
in section 1830(a)(3), addresses coinsurance liability of
beneficiaries, providing that coinsurance be based on charges.
Consequently, our regulations provide that an FQHC may not charge
beneficiaries more than 20 percent of the charge for the service
furnished regardless of the payment the FQHC receives from Medicare.
We believe that, on average, many FQHCs will recover their costs
under this provision. While it is possible that, in situations
involving minimal services, the FQHC will recover less than its cost,
it will recover more than its costs in certain other visits involving
high charge services.
We acknowledge that FQHCs must use a sliding fee schedule for
beneficiaries within 200 percent of poverty levels. Thus, FQHCs with a
high proportion of Medicare beneficiaries subject to the sliding fee
could receive less than cost from their Medicare population. However,
we believe that the law is clear regarding Medicare payment and
beneficiary coinsurance liability.
Effective Date
Comment: One commenter requested clarification of the effective
date for those centers that had previously obtained ``look-alike''
status under the Medicaid program.
Response: In accordance with Sec. 405.2434(b)(2), an FQHC's
effective date may be October 1, 1991, if it met all Federal
requirements on that date and if it applied to be a Medicare FQHC by
August 11, 1992. An entity that requested to become an FQHC by filing a
signed agreement within 60 days of publication of the regulation could
elect to choose an effective date from October 1, 1991 (the effective
date of the law) up to and including August 11, 1992. An entity does
not qualify as an FQHC on October 1, 1991 unless it met all Federal
requirements on that date. The preamble to the June 12, 1992 regulation
states that Medicare will pay for FQHC
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services furnished on or after October 1, 1991 by entities that met the
criteria in the regulation on that date and file a signed statement
within 60 days of the date of publication.
More specifically, an entity that is not receiving a grant under
the PHS Act but meets grant requirements, and applied for and obtained
FQHC status under the Medicaid program, and was approved without a
waiver could be paid for services from October 1991 if the entity met
the requirements in part 491 and applied to Medicare timely. The
earliest date for which an entity can qualify is October 1, 1991. HRSA
makes a recommendation about an entity's status after the entity has
applied and met all HRSA requirements, and we make the decision to
approve the entity as an FQHC. If an entity was approved as a Medicaid
FQHC ``look-alike'' without waiver after October 1, 1991, the earliest
date of FQHC approval for such a center is the date we approve the
entity as an FQHC.
Comment: One commenter objected to the August 11, 1992 date for
filing for approval as an FQHC from October 1991. The commenter
believed that we should permit exceptions to the August 11, 1992, date
for centers that provide a ``good cause'' explanation for their delay.
Response: We and the National Association of Community Health
Centers (NACHC) have made extensive efforts to assist centers in
applying to become FQHCs. Letters were sent to each grantee, ``look-
alike,'' and FFHC to make them aware of the process for FQHCs to
receive payment as an FQHC from October 1, 1991.
We have already processed payment adjustments to take into account
entities that acted timely to apply for FQHC status effective October
1, 1991. Making payment to 1991 for FQHCs that did not file in time
would be administratively burdensome because it involves the entity
refunding previously collected deductibles to beneficiaries and billing
for past preventive services. We believe the ``window'' we permitted
for FQHCs to qualify to October 1991 was generous, and we believe that
our letters and the letters from NACHC gave facilities adequate time
and information to apply and qualify. Therefore, we are maintaining the
policy in our 1992 rule.
Scope of Services
Comment: One commenter believed the law defines FQHC services as
those generally furnished by community health centers (CHCs). He noted
that this is considerably different from RHC services and recommended
revision of the scope of services to reflect this.
Response: The Act does not define FQHC services as the services
provided by CHCs. Section 1861(aa)(3)(A) and (B) of the Act defines the
scope of FQHC benefits in terms of those benefits enumerated in the RHC
law (section 1861(aa)(1)(A)-(C) of the Act) and preventive primary
health services that a center is required to provide under sections
329, 330 and 340 of the PHS Act. The law does not require that a center
be a CHC to qualify as an FQHC; it does provide that a facility may
qualify as an FQHC if it meets the requirements to become a CHC under
section 330 of the PHS law. We do not have the authority to expand the
FQHC scope of benefits beyond those specified in the law.
Comment: Several commenters objected to the regulation's definition
of preventive primary health services. Some commenters believed that
all services required under section 330 of the PHS Act, such as
transportation services, should be covered as preventive services.
Response: Section 1861(aa)(3) of the Act specifies that FQHC
services include those benefits defined as RHC services in section
1861(aa)(1)(A)-(C) of the Act and preventive primary health services
that are required under sections 329, 330 and 340 of the PHS Act. A
service must first be recognized as a preventive primary health service
under PHS law and HRSA guidelines to be included as a preventive
primary health service for Medicare FQHC purposes. If a service is not
included as a primary preventive service under the PHS Act and the HRSA
guidelines, there is no authority for Medicare to cover the service.
42 CFR parts 51c and 56 define preventive services as medical
social services, nutritional assessment and referral, preventive health
education, children's eye and ear examinations, prenatal and post-
partum care, perinatal services, well child care (including periodic
screening), immunizations and voluntary family planning. Based on the
U.S. Preventive Services Task Force Report for persons age 65 or older,
HRSA further requires its grantees to provide additional preventive
services that are specified in Sec. 405.2448.
Transportation services are helpful in promoting access to
preventive health care, especially for individuals living in
underserved areas. Such services, however, are not defined as
preventive services by HRSA, thus we do not have the authority to
include such services as FQHC preventive services.
Comment: One commenter recommended that the rule be clarified to
allow for the inclusion of advanced practice mental health nurses under
the FQHC benefit. The commenter believed it was the intent of the law
to include these practitioners under ``specialized nurse
practitioners;'' however, they are not all technically classified as
nurse practitioners.
Response: The Act does not recognize or specifically refer to the
services of advanced practice mental health nurses. We do not have the
authority to expand the FQHC scope of benefits beyond those the
services of practitioners described in the Act. The FQHC scope of
benefits includes some, but not all, categories of advanced practice
nursing. For example, it does not include clinical nurse specialists.
Other categories of advanced practice nursing such as physician
assistants and nurse practitioners may provide mental health services
covered under the FQHC benefit. Services provided by clinical nurse
specialists, for example, could be covered only if they were ``incident
to'' services as provided in section 1861(aa)(1)(B) of the Act. This
section provides for coverage of services furnished incident to the
services of physicians, certain mid-level practitioners, clinical
psychologists, or clinical social workers.
Comment: Numerous commenters objected to the provision that limits
FQHC services to those furnished outside a hospital. FQHCs routinely
follow their patients to the hospital setting and noted that it is
burdensome to bill the carrier separately for these services as non-
FQHC services. Further, this mechanism provides an opportunity for
duplicate billing. Some commenters noted that RHCs may bill for
hospital services and believe the same policy should be applicable to
FQHCs.
Response: There are two reasons why FQHC services are limited to
those furnished outside of the hospital: (1) Section 1861(aa)(3) of the
Act requires that FQHC services be provided only to outpatients, and
(2) section 1862(a)(14) of the Act prohibits payment for services
furnished to hospital patients, except as specified in the law. Section
1862(a)(14) of the Act, in enumerating those who may receive payment
for services furnished in a hospital, does not include either RHCs or
FQHCs. Therefore, payment cannot be made for FQHC services to hospital
patients.
The Social Security Amendments of 1983, Pub. L. 98-21, on April 7,
1983, added section 1862(a)(14) to the Act. This section prohibits
payment under Medicare for any service provided to a hospital inpatient
that is not furnished by the hospital itself or furnished under
arrangements made by the hospital with
[[Page 14646]]
the entity furnishing the service. Section 1862(a)(14) of the Act also
states that certain services are specifically excluded from this
prohibition. The exclusion is limited to physicians' services, services
described by section 1861(s)(2)(K)(i) of the Act (certain physician
assistant services, nurse practitioner, clinical nurse specialist, and
nurse-midwife services), qualified psychologist services, and services
of a certified registered nurse anesthetist.
Section 1862(a)(14) of the Act was further revised by section
9343(c) of the Omnibus Budget Reconciliation Act of 1986 (OBRA '86),
Pub. L. 99-509, to apply to hospital outpatients as well as hospital
inpatients. As a result, the law now prohibits payment, except as
specifically enumerated, for both hospital outpatients and inpatients.
By its terms, then, section 1862(a)(14) of the Act prohibits Medicare
payment for FQHC services provided to a hospital patient.
However, we do not believe it is the intent of the law to prohibit
FQHC practitioners from following their patients to a hospital setting.
The law provides two alternative payment mechanisms for such services.
First, the FQHC may look to the hospital for payment for the services.
Second, FQHC practitioners can follow patients to a hospital and
provide services, but the practitioner may not bill those services as
FQHC services. Instead, FQHC physician visits are covered under other
Part B provisions of Medicare as physician services, and the FQHC
practitioner must bill the Medicare carrier to receive payment.
Section 1842(b)(6) of the Act provides that a facility, under
certain conditions, may bill the program for the services of its
employees. In such a case, it is not necessary that a FQHC practitioner
employed by an FQHC bill for the services provided in hospitals;
rather, the FQHC may bill the program on behalf of its employees using
the form HCFA-1500. These bills must be sent to the local carrier
instead of the intermediary processing cost-based claims are paid using
the routine part B payment methodology (in most cases resource-based
relative value system fee schedules).
Despite the commenters' allegations to the contrary, an RHC cannot
bill for hospital services. The same statutory requirements that extend
to an FQHC apply to an RHC as well.
Comment: Several commenters objected to the exclusion of diagnostic
x-rays from the definition of FQHC services. They supported inclusion
of such services under the FQHC benefit as incident to a physician's
service. They argued that this would promote administrative ease in
bill submission.
Response: Section 1861(aa)(1)(A) of the Act defines RHC (and, thus
FQHC) services to include physicians' services and such services and
supplies as are covered under section 1861(s)(2)(A) of the Act if
furnished as an incident to a physician's professional service and
items and services described in section 1861(s)(10) of the Act
(pneumococcal and influenza vaccine).
The technical component of x-ray services, as distinct from
physician services, is covered under section 1861(s)(3) of the Act.
Therefore, it is not included in the definition of FQHC services. We
have no authority to change this requirement under current law.
However, we are interpreting the law as permitting the professional
component of the x-ray to be included as an FQHC-covered service as a
physician service. Moreover, though the technical component of x-ray
services is not covered under the FQHC benefit, it may be claimed under
Part B of Medicare by billing the carrier.
Comment: One commenter noted that the exclusion of radiology and
hospital services from the scope of FQHC services presents a problem in
waiver of the deductible. By virtue of its mission, an FQHC is treating
a population that generally has insufficient funds to meet necessary
medical expenses. The exclusion of some services from the scope of FQHC
services will result in a deductible liability for those excluded
services and present a financial hardship for low income beneficiaries.
The commenter recommended that we waive the deductible for all services
provided in an FQHC, regardless of whether they are FQHC services or
not.
Response: Section 1833(b)(5) of the Act provides that the Medicare
deductible does not apply to FQHC services. Section 1861(aa)(3) (A) and
(B) of the Act defines the scope of FQHC services in terms of those
services furnished by an RHC and preventive primary health services
that a center is required to provide under the PHS law and HRSA
guidelines.
The rationale for excluding the technical component of radiology
services to hospital inpatients from the definition of FQHC services
has been discussed in the prior two responses. Section 1861(s)(3), and
not 1861(s)(2)(A), of the Act is the basis for the diagnostic x-ray
benefit; thus, the technical component of x-ray services is not
included within the FQHC benefit. In accordance with sections
1861(aa)(3) and 1862(a)(14) of the Act, FQHC services cannot be
provided to hospital patients. We have no authority to waive the
deductible for these services, which are not FQHC services.
We acknowledge that paying the deductible for these services may be
difficult for some beneficiaries. Beneficiaries suffering financial
hardship may be eligible for assistance under the Qualified Medicare
Beneficiaries (QMB) Program. A qualified Medicare beneficiary is an
individual who is entitled to Medicare hospital insurance benefits
under Part A, with or without payment of premiums, who also has an
income that does not exceed 100 percent of the Federal poverty level
and has resources that do not exceed twice the maximum amount
established for Supplemental Security Income eligibility.
Under the QMB program, Federal financial participation is available
to State Medicaid agencies for medical assistance for the beneficiary's
Medicare cost sharing expenses. The expenses include Medicare Part A
and Part B deductibles and coinsurance. Medicaid pays the coinsurance
and the deductible. This will help beneficiaries to avoid the out-of-
pocket costs. The QMB program provides a mechanism to assist those
beneficiaries with limited means to pay the deductible.
Comment: One commenter noted that although nurse-midwives are
mentioned in several places throughout the FQHC regulation,
Sec. 405.2446, which defines the FQHC covered scope of services, does
not include nurse-midwives.
Response: We agree with the commenter and are revising
Sec. 405.2446 to include the services of nurse-midwives as covered FQHC
services. We intend to propose a change to the definition of nurse-
midwife in a proposed rule on RHCs currently in process, which will
also affect FQHCs. In the meantime, State law governs which nurse-
midwives qualify to provide services in FQHCs.
Comment: One commenter recommended coverage of clinical nurse
specialists as FQHC practitioners. These health care practitioners are
registered nurses with master's degrees in a defined clinical area of
nursing. They are similar to nurse practitioners and are educated and
trained to provide preventive services and primary care. OBRA '90
recognizes these health care practitioners as independent providers in
rural areas. Therefore, the commenter believed that we should cover the
individual services of these practitioners within the scope of FQHC
services. In addition, the commenter wanted the phrase ``clinical nurse
specialist'' added to the definition of an FQHC visit.
[[Page 14647]]
Response: The Act does not clearly provide coverage for clinical
nurse specialists services in an RHC or FQHC. Although the definition
of a clinical nurse specialist is included in section 1861(aa)(5) of
the Act, the Act does not explicitly include these practitioners in the
scope of the benefit.
Comment: One commenter recommended that the adjective
``specialized'' be removed as a modifier to nurse practitioner as most
States do not use this term in licensing nurse practitioners.
Response: We have been advised by nursing associations that the
term ``nurse practitioner,'' which is defined in Sec. 405.2401(c)(17),
encompasses all specialties among nurse practitioners. Consequently, it
is not necessary to use the term ``specialized'' and we are removing
the definition of ``specialized nurse practitioner'' from
Sec. 405.2401.
Primary Preventive Services
Comment: Several commenters objected that we did not include dental
services as preventive care covered under the FQHC benefit. They noted
that the U.S. Preventive Services Task Force Report includes an oral
health component and argued that such services are essential for
elderly patients. Further, preventive primary dental services are
separately mandated in section 329 and 330 of the PHS Act. Therefore,
the commenters believed that the Congress did not intend to exclude
dental services from the FQHC benefit and that its failure to amend
section 1862(a)(12) of the Act was a technical oversight.
Response: Dental services are not included in the HRSA definition
of preventive primary health services; they are considered a separate
benefit under HRSA services. The PHS Act provides for preventive dental
services as a primary health care benefit separate from preventive
primary health services. That is, section 329(a)(6)(C) of the PHS Act
defines preventive primary health services, while a different section
of the law, section 329(a)(6)(F), defines preventive dental services.
In defining the scope of FQHC preventive services, the Act specifically
refers only to preventive primary health care services in sections 329,
330 and 340 of the PHS Act.
Further, section 1862 of the Act contains an exclusion for dental
services, prohibiting payment for services in connection with the care,
treatment, filling, removal or replacement of teeth or structures
directly supporting the teeth. OBRA '90 did not amend section
1862(a)(12) of the Act to remove the exclusion of dental services for
FQHCs. However, it did amend other provisions of section 1862(a). As a
result, the regulations exclude dental services from the definition of
FQHC preventive primary health services and will continue to do so.
Although the U.S. Preventive Services Task Force Report includes an
oral health component for the elderly, that oral component is
categorized as a counseling service by the Task Force. The report
intended that a primary care practitioner would briefly examine a
patient's mouth for visible signs of disease and counsel the patient to
see a dentist if there is a need for routine prophylactic services. If
the beneficiary had need of prophylactic or other dental services, he
or she would be referred to a dentist. The oral health component is not
the same as dental services.
Comment: Several commenters objected to the exclusion of screening
mammography services as an FQHC preventive service. Although this
service is payable under Part B, they note that application of the
deductible and having to make an appointment to have the mammogram
performed at another facility would deter some of the most needy
population from getting this valuable service.
Response: Sections 1834(c) and 1861(s)(13) of the Act provide for
coverage of screening mammography for certain women entitled to
Medicare, subject to frequency limitations, quality standards and
special payment rules. The Act provides coverage of screening
mammography services only in a facility that meets the Medicare
requirements for certification. An FQHC may provide and bill for
screening mammography services under the mammography benefit as long as
it meets the applicable quality standards and coverage requirements.
The quality standards are designed to protect the health and safety of
Medicare beneficiaries.
As explained above, the scope of benefits under FQHCs does not
include radiological services. In addition, the Act contains special
provisions for the coverage of screening mammography as a Medicare
benefit, and those provisions apply to FQHCs in the same manner as they
apply to other entities.
Comment: One commenter believed that we should recognize services
listed in the U.S. Preventive Services Task Force Report for people
under age 65 as preventive services for purposes of the FQHC benefit.
Response: By definition, the Medicare program is a Federal health
insurance program for people age 65 or older and certain disabled
individuals. Section 1861(aa)(3)(B) of the Act specifies that FQHC
services include preventive primary health services that a center is
required to provide under sections 329, 330 and 340 of the PHS Act. A
service must first be recognized as a preventive primary health service
under HRSA guidelines in order to be included as an FQHC preventive
primary health service.
HRSA defines preventive primary health services in 42 CFR parts 51c
and 55 as medical social services, nutritional assessment and referral,
preventive health education, children's eye and ear examinations,
prenatal and post-partum care, perinatal services, well child care
(including periodic screening), immunizations, and voluntary family
planning services. These are the required preventive primary health
services as defined by HRSA. Thus, these are the preventive primary
health services that we require in an FQHC.
In preparing the final rule with comment period for FQHC preventive
services, we noted that this list of services was not likely to
significantly benefit the majority of Medicare beneficiaries. We worked
with HRSA to expand the HRSA-required preventive primary health
services. The ``Guide to Clinical Preventive Services,'' prepared under
the supervision of the U.S. Preventive Services Task Force, provides
further recommendations for clinical practice on additional preventive
interventions. HRSA adopted the policy that the list of preventive
primary health services recommended by the task force in the ``Guide to
Clinical Preventive Services'' for people aged 65 or older is
consistent with the preventive primary health services that its
grantees are already required to provide.
The commenter believed that we should recognize services
recommended for people under age 65 as preventive services for purposes
of the FQHC benefit. The ``Guide to Clinical Preventive Services''
lists the same preventive services for both the under age 65 and the
over age 65 populations, with the exception of counseling regarding
sexual practices. The sexual practices category includes sexually
transmitted diseases, partner selection, contraceptive devices, and
unintended pregnancy. Since, the HRSA regulations at 42 CFR part 55
already include the majority of these services under preventive health
education and family planning, we do not believe it is appropriate to
explicitly include these in the list of preventive primary care
services under Medicare.
Comment: One commenter noted the value of proper nutrition in
health outcomes, particularly with diseases of
[[Page 14648]]
hypertension, obesity and diabetes. The commenter requested
clarification regarding the provision of dietician services under the
``incident to'' provision if they are provided by a consultant.
Response: The FQHC benefit includes services furnished by certain
professionals. Section 1861(aa)(1) of the Act defines these
professionals as a physician, nurse practitioner, physician assistant,
clinical psychologist or clinical social worker. The benefit also
includes services furnished ``incident to'' the services of these
professionals as long as the individual furnishing the service is an
employee of the FQHC.
Dietician services could be covered FQHC services if provided to
the beneficiary as ``incident to'' services. Dietician services must
meet the criteria for ``incident to'' services established in sections
406 and 410 of the Medicare RHC and FQHC Manual. These sections state
that services and supplies incident to a physician's or mid-level
practitioner's professional services are covered as FQHC services as
long as they are: furnished as an incidental, although integral, part
of a professional's services; of a type commonly furnished either
without charge or included in the FQHC's bill; of a type commonly
furnished in a physician's office; services provided by clinic
employees other than those services listed in section 400A of the
Medicare RHC and FQHC Manual furnished under the direct, personal
supervision of a physician or mid-level practitioner; and furnished by
a member of the clinic or center's staff who is an employee of the
clinic or center. These criteria follow the longstanding criteria for
services ``incident to'' physician services.
The Medicare RHC and FQHC Manual provides that there must be a
physician's or mid-level practitioner's personal service furnished to
which the non-physician's services is an incidental, although integral,
part. This does not mean, however, that each occasion of service by a
nonphysician need also always be the occasion of the actual rendition
of personal professional services by the physician or mid-level
practitioner. This requirement is also met for nonphysician services
furnished during a course of treatment in which the physician or mid-
level practitioner performs an initial and subsequent service with a
frequency that reflects his or her active participation in, and
management of, the course of treatment. This means that there must have
first been a direct, personal, professional service furnished by a
physician or mid-level practitioner to initiate the course of treatment
of which the nonphysician service is an incidental part. In addition,
there must be subsequent services performed by the physician or mid-
level practitioner of a frequency that indicates his or her continuing
active participation in and arranging the patient's course of
treatment.
Dietician services that are provided in an FQHC may be covered if
they are provided directly by a physician or appropriate mid-level
practitioner or are incident to his or her services. This does not
include services that are provided independently by a dietician without
the active involvement of the FQHC physician or mid-level
practitioners.
Consistent with our longstanding policy, as reflected in section
406 of the Medicare RHC and FQHC Manual, ``incident to'' services must
be furnished by a member of the clinic staff who is an employee of the
clinic. Thus, in order for dietician services to be covered FQHC
services, the dietician must be an employee of the FQHC. To determine
the employer/employee relationship, the ``usual common law rules,''
that are referred to in section 210(j)(2) of the Act, are applied. In
applying these rules, we consider not only who pays a person's salary
and fringe benefits but also other factors including who has hiring and
firing authority and who pays Federal Income Contributions Act (FICA)
taxes and withholds income tax.
The requirement that personnel who perform ``incident to'' services
must be employees of the clinic or center for purposes of coverage is a
longstanding Medicare policy. The basis for this requirement is in
section 1861(s)(2)(A) of the Act. This section limits coverage of
``incident to'' services to those services that are commonly furnished
in physicians' offices and are commonly either furnished without charge
or included in the physicians' bills. We have consistently interpreted
this provision to exclude coverage of ``incident to'' services provided
by non-employees of physicians, and in this case, of clinics. In
addition, the employer/employee relationship requirement ensures that
physicians will have the authority to exercise appropriate medical
supervision and management control over the qualifications and
performance of non-physicians for whose services he or she will be
billing Medicare. Since the PHS Act encourages FQHCs to contract to
provide services, we do not wish to create barriers to, and burdens on,
FQHCs that wish to contract for non-physician professional services.
Therefore, payment may be made for services provided by FQHC contracted
professionals. However, this FQHC provision does not apply to RHC
services. We plan to address this issue in a future proposed rule.
Comment: One commenter recommended that nutritional education and
counseling be listed as a separate preventive primary health service.
Response: As noted above, the Act links preventive primary health
services to the PHS requirements. Although HRSA guidelines include
nutritional assessment, they do not include nutritional counseling and
education. Because the HRSA guidelines do not specifically include
nutritional education and counseling as a preventive primary health
service, we do not have the authority to include these as preventive
services in the FQHC regulations.
Nutritional education and counseling are tools to maintain or
improve an individual's nutritional status. Generally, nutritional
education and counseling can be defined as a means of educating the
patient. Nutritional education and counseling for a Medicare
beneficiary could be covered if it is provided to the beneficiary as a
service that is ``incident to'' the service of a particular
practitioner. The beneficiary must see an attending FQHC professional
for a medical reason to which the nutritional education and counseling
is incident. For example, nutritional education for a diabetic patient
being actively monitored by an FQHC practitioner could be covered as an
``incident to'' service.
We note that encounters with a nurse or dietitian that are not
associated with a visit by an FQHC practitioner are not billable as
visits. The costs of the personnel providing the educational services,
however, may be included in the center's allowable costs.
Comment: One commenter requested clarification of what is meant by
nutrition assessment and who could perform the assessment. The
commenter recommended that a registered dietitian is the best qualified
professional to provide the service.
Response: HRSA guidelines include nutritional assessments and
referrals as preventive primary health services; therefore they are
covered as FQHC preventive primary health services. Because nutritional
assessments are FQHC covered preventive services, any professional in
an FQHC can provide these services. We believe that most physicians,
nurse practitioners, and physician assistants, have the skills
necessary to conduct a nutritional assessment as a preventive primary
health service for Medicare beneficiaries.
[[Page 14649]]
However, the physician may use the services of a dietician employed
by the FQHC for those beneficiaries who require extensive assistance in
making dietary changes. As noted above, the services of a dietician may
be covered under the FQHC benefit when the service is provided to the
beneficiary as ``incident to'' the services of a physician, nurse
practitioner, or a physician's assistant service. An FQHC professional
must see the beneficiary for a medical reason to which the services of
a dietician are incident. The initial face-to-face encounter with the
attending professional is necessary for the service to be billed as an
FQHC visit. The definition of a visit is discussed at Sec. 405.2463.
Comment: Several commenters voiced strong objections to the
exclusion of group counseling as a preventive service. They believed it
is more efficient for the center to furnish needed counseling services,
such as diabetic education, in a group setting rather than to use
valuable physician time.
Response: As noted above, the Act links the definition of
preventive primary health services under the FQHC benefit to the PHS
law. Group counseling is not included as a preventive primary health
service in the PHS law. As a result, we do not have the authority to
include such services as FQHC preventive services.
In addition, group counseling is seldom a medical service, and
generally, no active medical treatment is provided during a classroom
situation. Moreover, there is an absence of scientific evidence that
group counseling, such as smoking cessation classes, alters behavior or
health status of individuals. Although group counseling services, such
as diabetic education, are not covered preventive services, individual
counseling services could be considered covered FQHC services if they
are provided to the beneficiary as an ``incident to'' service.
Comment: One commenter noted that items five and six in the
preventive services list both say prenatal. The commenter believed that
one of the preventive services should be perinatal care.
Response: Section 1861(aa)(3)(B) of the Act specifies that FQHC
services include preventive primary health services that a center is
required to provide under sections 329, 330 and 340 of the PHS Act. In
developing the FQHC regulations, we looked to 42 CFR parts 51c and 56
of the HRSA regulations. These regulations are repeated in
Sec. 405.2448 exactly as they are in the HRSA regulations; the HRSA
regulations do not include perinatal services. However, the PHS law
(see 45 U.S.C 329(a)(6)(C)) does provide for perinatal services.
Therefore, we are revising Sec. 405.2448 to include perinatal care as a
covered preventive service.
Comment: Several commenters objected to the requirement in the
preventive services definition that services be furnished by a
physician or an employee of the center. The commenters noted that many
centers make extensive use of contract services in the provision of
preventive care services that may not be needed on a daily basis.
Response: The FQHC benefit includes a provision for services
furnished ``incident to'' the services of FQHC professionals as long as
the individuals furnishing the services are employees of the FQHC. As
we noted above, it is a longstanding Medicare policy, based on our
interpretation of section 1861(s)(2)(A) of the Act, that an individual
who performs ``incident to'' services must be an employee of the clinic
or center for purposes of coverage.
The list of FQHC preventive primary health services includes the
type of services that does not generally require the skill level of a
specialist. It is our intent that preventive primary health services,
for the most part, involve a screening process to detect health
conditions that could indicate adverse health outcomes. Patients should
be referred for diagnostic services if the initial screening indicates
a potential problem. Thus, we believe that the preventive primary
health services specified in the regulations can be provided by the
staff of the FQHC. As a result, we are retaining the requirement that
FQHC preventive services be provided by either a physician or an
employee of the center.
Comment: One commenter questioned how his facility, which provides
noninvasive diagnostic services can be reimbursed through FQHCs.
Response: It is not clear what the commenter meant by ``noninvasive
diagnostic services.'' Diagnostic laboratory services must be billed by
the entity providing the services. Consequently, if the commenter
intended to refer to laboratory services, the entity must bill for such
services itself. As noted previously, diagnostic radiological services
are not covered FQHC services. Thus, an entity could not be paid under
the FQHC benefit for the technical component of radiological services.
Although diagnostic radiological services are not covered FQHC
services, a supplier can be paid for these services furnished to FQHC
patients under normal Medicare Part B payment rules.
Comment: One commenter expressed concern that physicians and nurse
practitioners are untrained in hearing testing and the fitting of
hearing aids. The commenter recommended that Medicare ensure that
beneficiaries have access to hearing aid distributors either for the
initial FQHC covered hearing screening service or for follow-up
services. The commenter suggested that we require that any patient
whose screening shows that follow-up care is necessary be referred to a
State licensed or National Board for Certification-Hearing Instrument
Sciences (NBC-HIS) certified hearing aid distributor.
Response: According to section 1862(a)(7) of the Act, diagnostic
audiological services for the purpose of fitting a hearing aid are not
Medicare covered services. It would be inappropriate for the Medicare
program to regulate referrals for such noncovered services.
The HRSA guidelines provide that hearing screening is a preventive
primary health service. The skills that are needed to provide
diagnostic services for hearing screening are minimal, and they can be
acquired by staff with minimal training. Therefore, we believe that
FQHC staff generally are qualified to perform hearing screening
services for Medicare beneficiaries.
According to the Medicare Carrier's Manual, section 2070.3,
additional diagnostic services beyond hearing screening are covered by
Medicare when a physician orders such testing for the purpose of
obtaining additional information necessary for his or her evaluation of
the need for or appropriate type of medical or surgical treatment for a
hearing deficit or related medical problem. However, additional service
is not covered when the medical or surgical treatment is already known
by the physician or is not under consideration and the diagnostic
services are performed only to determine the need for or the
appropriate type of hearing aid.
Comment: One commenter advised us of an upcoming HRSA directive
requiring testing for tuberculosis of certain high risk patients. Since
this will be a required preventive primary health service for all
grantees, the commenter recommended that the Medicare list of
preventive services be similarly amended.
Response: Since the Act links the definition of primary preventive
services in an FQHC to the services required by HRSA of its grantees
under sections 329, 330 and 340 of the PHS Act, we believe that the
regulations should reflect HRSA guidelines. HRSA has sent a memorandum
to grantees to
[[Page 14650]]
notify them that tuberculosis testing will be included as a preventive
primary health service. Therefore, we are revising Sec. 405.2448 to
specify that FQHC covered preventive primary health services include
testing of certain high risk patients for tuberculosis.
Clinical Psychologist and Clinical Social Workers
Comment: One commenter requested clarification as to why the RHC
regulations were not similarly amended to include clinical
psychologists and clinical social workers in accordance with changes
made in the law years earlier.
Response: OBRA '87 added coverage of clinical psychologists in RHCs
and OBRA '89 added coverage of clinical social workers in RHCs. We are
in the process of developing a proposed rule to make those changes to
the RHC regulations. Unlike the OBRA '89 provisions affecting RHCs,
OBRA '90 authorized us to issue final regulations and add coverage of
FQHCs without first issuing a proposed rule and soliciting public
comment.
Comment: One commenter noted that the regulations state that
clinical psychologist and clinical social worker services are covered
if provided by a center employee. The commenter believed that it is
often more efficient to contract for such service in the FQHC setting
and recommends modification of the regulations to cover such purchased
services.
Response: Previously, we permitted facilities to contract only for
physician services. After considering the comment, we came to the
conclusion that it would be inconsistent with the provisions of the PHS
Act (as explained elsewhere in this preamble) to prohibit an FQHC from
contracting for the services of clinical psychologists and clinical
social workers. Therefore, we are revising Sec. 405.2450 to provide
that the services of clinical psychologists and clinical social workers
may be covered if they are furnished by an individual who owns, is
employed by, or furnishes services under contract to the FQHC. We are
also revising Secs. 405.2468 and 491.9(a)(3) to clarify that a clinical
social worker or clinical psychologist may furnish services under
contract to the FQHC.
Comment: One commenter objected to the limitation on clinical
social worker service to those necessary to the diagnosis or treatment
of mental illnesses. They noted that, given the special needs of the
patient population served by FQHCs, social workers may perform other
health related services for patients.
Response: Section 1861(hh)(2) of the Act provides that clinical
social worker services include services performed by a clinical social
worker for the diagnosis and treatment of mental illnesses. The Act
does not indicate that any different definition of services provided by
a clinical social worker should apply for purposes of the FQHC benefit.
The comment implies that the services of clinical social workers
are needed to provide non-medical services to the FQHC population. Even
if such services might be helpful to the FQHC population, non-medical
services are not covered by Medicare under any circumstances.
Comment: Several commenters objected to the application of the
62\1/2\ percent mental health limitation to the FQHC clinical
psychologist and clinical social worker. They argued that if the
Congress had intended this limitation to apply, it would have
explicitly stated so in the Act.
Response: Section 1833(c) of the Act states:
Notwithstanding any other provision of this part, with respect
to expenses incurred in any calendar year in connection with the
treatment of mental, psychoneurotic and personality disorders of an
individual who is not an inpatient of a hospital at the time such
expenses are incurred, there shall be considered as incurred
expenses for purposes of subsections (a) and (b) only 62\1/2\
percent of such expenses.
This section of the Act clearly indicates that there is a mental health
treatment limitation of 62\1/2\ percent for clinical psychologist and
clinical social worker and other practitioner treatment services
consistent with State law and makes clear that the limitation applies
unless it is explicitly waived elsewhere in the law. This result is
consistent with section 1861(hh)(2) of the Act, which defines clinical
social worker services as services performed by a clinical social
worker for the diagnosis and treatment of mental illnesses.
Since there is no statutory exception for FQHCs, the limitation on
payment for mental health treatment applies to all FQHCs, free-standing
and provider-based.
Payment Issues
Productivity Screening Guidelines
Comment: A commenter stated that the productivity standard of 4200
visits for a full time equivalent physician is not a reasonable
standard and acknowledged that HRSA uses this standard but stated that
HRSA applies the standard differently in regard to HRSA's encounters as
opposed to HCFA's visits.
Response: Our use of the term ``visit'' is meant to be synonymous
with the term ``encounter'' used by HRSA. The same concern about
conflicting use of terms by us and HRSA was raised when we implemented
productivity screens for the RHC program. At that time, we and HRSA
agreed on the meaning of the terms ``encounter,'' as used by HRSA, and
``visit,'' as used by us; they were to be used interchangeably. (This
issue was addressed in a final notice, Rural Health Clinic Payment
Limits and Productivity Screening Guidelines, published in the Federal
Register on December 1, 1982 at 47 FR 54165). We and HRSA agreed to a
common definition of these two terms to eliminate any difficulties
caused by the use of different terms. Clinics also found it difficult
to comply with the separate productivity guidelines and reporting
requirements used by us and HRSA. As a result we adopted the
productivity screening guidelines used by HRSA. We continue to use the
HRSA guidelines.
Since the time that we and HRSA originally reached agreement on the
common meaning of ``encounter'' and ``visit,'' the RHC program has
expanded and the FQHC program has been implemented. We have reexamined
our definition. We are modifying the definition of a ``visit'' to
accommodate the addition of clinical psychologists and clinical social
workers (Sec. 405.2463). This change is discussed in more detail in
answer to other comments. We will continue to use the HRSA productivity
guideline of 4200 visits for full time equivalent.
Comment: A number of commenters stated that the screening
guidelines are not appropriate for all FQHCs. For instance, a commenter
stated that, without special attention, small rural health centers and
those in frontier areas would be penalized by the productivity and
overhead screens. Two other commenters stated that the standard should
be lowered and that separate and lower standards should be developed to
apply to FQHCs with home visiting and teaching programs. The commenter
stated that Federal policy is clearly moving in the direction of
providing incentives to increase the number of primary care physicians
and that health centers will be increasingly asked to take on the role
of residency training and argued that a productivity standard should
not impede this policy direction. Additionally, two other commenters
stated that the hourly standard, used in the past by the FFHCs, of 2.4
visits per hour is a more realistic standard than the one we had
published.
[[Page 14651]]
Response: We use the same guidelines applied by HRSA in the grant
review process and the ongoing monitoring of its programs. We believe
it is appropriate to use uniform productivity guidelines rather than
developing separate guidelines. If, however, an FQHC cannot meet these
guidelines, the FQHC's intermediary has the authority to modify the
productivity guidelines. An FQHC that has atypical circumstances may
request exceptions to the guidelines from its intermediary.
Provider-Based/Freestanding FQHCs
Comment: Commenters questioned the need for different payment
methodologies for freestanding and provider-based FQHCs and why
provider-based FQHCs use an intermediary other than the intermediary
used by the freestanding FQHCs and stated that the Act does not provide
for a distinction between provider-based and freestanding FQHCs.
Response: As we stated in the June 12, 1992 final rule, the same
qualification and coverage rules apply to both provider-based FQHCs and
independent FQHCs. Section 1833(a)(3) of the Act allows the Secretary
latitude in defining the payment methodology for FQHCs. Consistent with
the RHC payment methodology, we believe, at this time, that two
different methodologies should apply to provider-based and freestanding
FQHCs, as well. Like an RHC, an FQHC that is an integral part of a
provider should follow the rules applicable to the provider, since it
is a provider component. Having the provider's intermediary pay the
FQHC under the same cost reporting and payment procedures used by other
components of the provider is more efficient, both from the standpoint
of the intermediary and the provider. This promotes consistency and
rationality in the payment system, eliminates duplicate audits and
minimizes the possibility of program abuse.
Comment: A commenter pointed out that there is a cap for payment to
freestanding FQHCs but not provider-based FQHCs.
Response: While there is no payment limit (cap) for provider-based
FQHCs as there is for freestanding FQHCs, the allowable costs of
provider-based FQHCs' are controlled by the Medicare principles of
reimbursement. These principles permit us to determine if costs are
reasonable and limit reimbursable costs to those that are allowable and
necessary for the efficient delivery of services.
Comment: One commenter stated that freestanding FQHCs electing
payment on a reasonable charge basis will not be reimbursed for
preventive services and requested that the regulation clarify that
provider-based FQHCs will be paid for preventive services. Another
commenter suggested that the payment for these additional preventive
services be specifically addressed and recommended that payment for
these services be on an actual cost basis.
Response: All freestanding FQHCs are paid on an all-inclusive rate
basis subject to tests of reasonableness. Freestanding FQHCs do not
have the option to elect payment on a reasonable charge basis. Further,
Sec. 405.2446(b) specifies that FQHC services that are paid for under
the Medicare program include preventive services specified in
Sec. 405.2448. This coverage applies to all FQHCs, freestanding as well
as provider based. In addition, we do not believe that it is necessary
to address specifically the payment method for these preventive
services. Except for their purpose, these preventive services do not
differ from the other services provided in a provider-based FQHC and
therefore, are paid under the same reasonable cost principles as all
other services.
Comment: One commenter questioned whether the lesser of costs or
charges limitation, which currently is applied to provider-based FQHCs,
should be applicable to any type of FQHC, as section 1833(a)(2) of the
Act specifically provides that this limitation does not apply to FQHCs.
Response: Section 1833(a)(2) of the Act requires that the lesser of
costs or charges limitation apply with respect to the facilities not
excepted under that subparagraph; the requirement simply does not apply
to FQHCs. Authority for payment for FQHCs is contained in section
1833(a)(3) of the Act, which provides that payment for FQHCs is based
on reasonable costs that are ``related to the cost of furnishing such
services or which are based on such other tests of reasonableness as
the Secretary may prescribe in regulations * * *''.
Given this broad grant of authority to use ``other tests of
reasonableness,'' we are authorized to apply tests of reasonableness
that are required to be applied to other Medicare facilities, such as
the lesser of costs or charges provision.
Visits
Comment: Several commenters expressed concern with the number of
visits per day we allow for payment purposes. They suggested that if a
patient sees more than one physician or practitioner or has a medical
and mental health service on the same day more than one visit should be
allowed.
Response: We have considered the comments, and we are amending the
regulations to permit payment for more than one visit per day under
certain circumstances. We are revising the definition of visit in
Sec. 405.2401 and moving it to Sec. 405.2463, ``What constitutes a
visit.'' We now provide that Medicare pays for an additional visit per
day if a patient has a ``medical visit'' and an ``other health visit''
on the same day. A ``medical visit'' is defined as a face-to-face
encounter between a clinic or center patient and a physician, physician
assistant, nurse practitioner, nurse-midwife, or visiting nurse. An
``other health visit'' is defined as a face-to-face encounter between
an FQHC patient and a clinical psychologist, clinical social worker, or
other health professional for therapeutic mental health services. This
change permits payment for more than one visit, but it does not change
any other part of the method for determining allowable visits. We still
would allow only one medical visit per day. Readers should note that an
increase in visits will affect the FQHC all-inclusive rate calculation,
as provided in Sec. 405.2464.
Pneumococcal Vaccine
Comment: A commenter noted that the preamble stated that
pneumococcal vaccine would be paid at 100 percent of the Medicare
reasonable cost of the vaccine and its administration. However, the
Annual Reconciliation section of the regulation did not address how we
would pay for pneumococcal vaccine.
Response: We are revising Sec. 405.2466(b), Annual Reconciliation,
to provide that, for RHCs and FQHCs, payment for pneumococcal vaccine
and its administration is made at 100 percent of Medicare reasonable
cost.
Additionally, we are making a corresponding revision to the Annual
Reconciliation section of the regulation for influenza vaccine. In
accordance with sections 4071 and 4072 of OBRA '87, influenza vaccine
and its administration became a covered Medicare service under section
1861(s)(10)(A) of the Act effective May 1, 1993.
Section 1833(a)(3) of the Act specifies that services described in
section 1861(s)(10)(A) are exempt from payment at 80 percent of
reasonable costs. For RHCs and FQHCs, payment for influenza vaccine and
its administration is at 100 percent of reasonable cost. Like
pneumococcal vaccine, influenza vaccine will be treated as a pass
through
[[Page 14652]]
and not included in the all-inclusive rate or subject to the payment
limit.
Prior to this change, costs of influenza vaccine were included in
the calculation of the all-inclusive rate and subject to the FQHC
payment limit. Therefore, the FQHC payment limit(s) has been adjusted
to reflect the removal of influenza vaccine from the calculation of the
all-inclusive rate. Removal of the influenza vaccine and its
administration results in a reduction of approximately 1 percent to the
FQHC payment limits.
Note: Influenza vaccine costs were included in the original
calculation of the preventive service adjustment as discussed in the
June 12, 1992 final rule, at 57 FR 24972.
Contracted Services
Comment: A commenter stated that if a physician is an independent
contractor on the staff of the facility and not a physician whose
services are purchased on a limited basis the physician should not be
characterized as a contracted physician that is subject to the fee
schedule.
Response: To determine whether a physician is considered an
employee, the ``usual common law rules,'' referred to in section
210(j)(2) of the Act, are applied. These rules not only consider who
pays the practitioner's salary but other factors such as who has hiring
and firing authority, and who pays FICA taxes and withholds income tax.
When a physician is considered staff of the FQHC, the physician's
salary is included on the cost report and is used in determining the
facility's all-inclusive payment rate.
Comment: A commenter stated that the allowable cost of contracted
physician services is limited to the resource based relative value
scale (RBRVS) fee schedule for the Medicare program, which is
significantly below market. The commenter further stated that this
limit would restrict the FQHCs' ability to attract needed physicians
and specialists to their communities. The commenter stated that we
should establish another test of reasonableness.
Additionally, another commenter stated that a more appropriate test
of reasonableness for contracted services would be the amount that non-
participating physicians may receive for services they provide to
Medicare beneficiaries.
Response: We believe that payment for contracted physician services
should be limited to amounts accepted by the large majority of
physicians. According to the Report to Congress on Physician
Participation, Assignment, and Extra Billing in the Medicare Program,
dated October 2, 1992, there has been a continuing increase in the
number of physicians accepting assignment on claims. When a physician
accepts assignment on a claim, he or she agrees to accept the Medicare
allowed amount as payment in full for the services provided to the
beneficiary. The Report to Congress stated that allowed charges for
Medicare assigned claims represented 83.6 percent of the total allowed
charges in 1991. This is consistent with trends indicating that
physician assignment rates have increased and have maintained a high
level. Moreover, readers should note that the limit on contracted
physician services is a screening guideline and not an absolute payment
limit. The guideline is applied to assess the reasonableness of
payments for physician services purchased by the center. The fiscal
intermediary may modify application of this screen for atypical
circumstances. For example, the screen may be modified if the
intermediary determines that access to care is significantly affected.
We believe that the amounts paid under the physician fee schedule are
appropriate limits for contracted physician services.
Payment Limit
In response to the FQHC payment methodology published on June 12,
1992, we received comments from 18 commenters regarding the application
of a payment limit. Six of these were from health centers and eight
were from organizations and persons representing the health centers'
interests. The remaining four commenters were organizations
representing hospitals, physicians, and nurses. Discussion of comments
regarding the FQHC payment limit have been organized into the following
categories: General Payment Limit; Adjustment For Projected FQHC Visit
Mix; Primary Care Family Practice Adjustment; Urban and Rural
Determination; Urban and Rural Payment Difference; and Exceptions
Option.
General Payment Limit
Comment: Many of the commenters questioned the method used to
calculate the payment limits. Commenters stated that a payment limit of
this nature is not required by the Congress, is not consistent with
Congressional intent and exceeds statutory authority. Commenters were
concerned that we used the RHC payment limit as a base for determining
the reasonable costs for FQHC services. In addition, commenters stated
that the payment limit methodology is not based on empirical data, not
based on cost and is not equitable.
Response: The same statutory payment authority applies to RHCs and
FQHCs. This authority provides the Secretary latitude in determining a
payment methodology and in determining costs based on tests of
reasonableness defined in regulations. In order to implement this new
benefit in a manner consistent with the language of the law, we adopted
the RHC methodology for use in the FQHC program. We believe that the
Congress designed the FQHC program as a parallel program to the RHC
program. Not only is the payment authority identical but the core
services are also the same. The Congress added preventive services to
this core set of services for FQHCs, and these services are unique to
the FQHC program.
Inherent in the adoption of the RHC methodology is the use of the
productivity screens and an overall limit on payment. The RHC payment
limit established for independent facilities in 1978 and updated in
1982 was not only accepted by the Congress, it was written into law in
OBRA '87 as a test of reasonableness for costs of RHC services,
including clinical psychologist services, which were added to the
benefit in the same legislation. The law provided for an update to the
limit for 1988 and an annual update each year thereafter. We agree that
an annual update is important for the viability of both the RHC and
FQHC benefits. We also believe that, while it is critical to apply an
overall limit to ensure efficiency and economy, we must establish a
limit that takes into account the differences in the two benefits.
The FQHC methodology we created adjusts for differences between the
RHC and FQHC benefits using available cost data. We have made
adjustments to the RHC limit accounting for the general increase in
physician payments resulting from the physician fee schedule amounts, a
projected higher ratio in FQHCs than in RHCs of physician visits
compared to mid-level practitioner visits, the addition of primary
preventive services, and the fact that some FQHCs are located in urban
areas.
In constructing our preventive service adjustment, we used
allowable charge data. We believe that the calculation of this
adjustment is consistent with the methodology used to compute the RHC
limit, which used allowable charge data and is now statutorily set. We
do not see any conflict between our methods and the intent of the
Congress.
Comment: One commenter stated that the payment limits are
unreasonable with respect to actual reasonable costs. The commenter
stated that FFHCs in
[[Page 14653]]
Massachusetts received rates in the $78 to $88 range with a limit of
approximately $96. The commenter contended that the FQHC payment limits
understate the actual cost per visit for these section 329 and 330
grantees that were previously paid as FFHCs. Another commenter
recommended that we adopt the FFHC State-wide payment limits for the
next 3 years while the reasonable costs of FQHCs are studied. The
commenter stated that a limit should be developed based on future data.
Response: We do not believe it is appropriate to compare FFHC and
FQHC limits. The FQHC payment methodology and scope of services is
different from those in the former FFHC program. The comments indicate
confusion regarding the differences between the two benefits. Even with
these basic differences, we are concerned that we do not disadvantage
centers that were paid as FFHCs and that is why we are allowing an
exception for these entities for a 3-year period.
FFHCs were formerly paid on a ``cost related to reasonable charge
basis,'' which also resulted in an all-inclusive rate per visit based
on facility-specific costs. Application and computation of the FFHC
all-inclusive rate is significantly different from application and
computation of the FQHC rate. The FQHC all-inclusive rate is paid when
there is an encounter between a patient and a physician, physician
assistant, nurse practitioner, clinical psychologist, or clinical
social worker. The FFHC all-inclusive rate was paid only when there was
an encounter between a patient and a physician. The FQHC all-inclusive
rate per visit is calculated based on total allowable FQHC cost divided
by physician, physician assistant, nurse practitioner, clinical
psychologist, and clinical social worker visits. The FFHC rate per
visit was calculated based on total allowable FFHC costs divided by
physician visits. As a result, the FFHC all-inclusive rate formula had
a divisor of only physician visits thus yielding a higher rate per
visit.
Further, the scope of services for the FQHC and FFHC benefits is
different. Section 1861(aa)(3) of the Act identifies FQHC services as
physician, physician assistant, nurse practitioner, clinical
psychologist and clinical social worker services, and services and
supplies incident to the services of these practitioners. In addition,
preventive primary health services that a center is required to provide
under sections 329, 330 and 340 of the PHS Act are also included as
FQHC services. Medicare freestanding FQHCs are paid an all-inclusive
rate for these services for each encounter that meets the definition of
a visit. FQHCs could receive additional payment for Medicare covered
services that are outside of the FQHC scope of services.
The FFHC scope of services could potentially have included all
Medicare Part B services. Therefore, total allowable FFHC services
could have included a broader array of services. Medicare Part B
services outside of the FQHC scope of services (such as other
diagnostic and therapeutic services that a clinic obtains from an
independent laboratory) were covered FFHC services, and included in the
rate paid to FFHCs. All Medicare Part B services performed in an FFHC
were included in determining the all-inclusive rate and paid for under
the FFHC methodology for each FFHC visit. For these reasons, we do not
believe the FFHC payment limits are appropriate for the FQHC benefit.
Comment: One commenter stated that the use of FFHC information in
combination with RHC data to develop the FQHC payment limits does not
assure adequate reasonable cost reimbursement for all FQHCs. The RHC
and FFHC programs are optional programs in which organizations choose
to participate. Entities granted FQHC status under OBRA '90 that did
not participate in the FFHC program may be significantly different from
FFHCs and RHCs in case load.
Response: As discussed in a prior response, we believe that the
Congress designed the FQHC program as a parallel program to the RHC
program, and we used the RHC payment limit as a basis for developing
the FQHC payment limits. We adjusted the RHC payment limit based on
FFHC data for a projected higher physician visit mix and for the urban
differential. We understand the concern that the cost experience of
FFHCs may not necessarily be representative of the costs of FQHCs as a
whole. We analyzed 1990 data provided by the Public Health Service's
Bureau of Primary Health Care Common Reporting Requirements (BCRR)
Report to determine whether the cost per encounter would differ for
FFHCs and other section 329 and 330 grantees. The data indicate that
the median cost per visit for FFHCs was slightly higher than the median
cost per visit for community and migrant health centers that were not
paid as FFHCs. Since FFHC costs were actually higher than other section
329 and 330 grantees, we believe that using FFHC data would result in
adequate reasonable cost payments.
We also considered the application of a case mix adjustment;
however, we do not believe one is necessary given the FQHC scope of
services. We believe that, since the primary mission of the FQHC
program is to provide outpatient primary care services, the services
should not vary substantially from one patient population to another.
As discussed in the preamble to the June 12, 1992 final rule with
comment period, we will collect and analyze FQHC cost report data to
determine if a payment limit adjustment is necessary. If after
analysis, we find it necessary to adjust the methodology used to
determine the FQHC limits currently in place, we will issue a proposed
notice and the public will have an opportunity to comment.
Comment: One commenter stated that we should describe the specific
tests of reasonableness in regulation text so that these methods may
not be changed without public review and comment.
Response: We agree that a change in specific tests of
reasonableness used to determine the all-inclusive rate should receive
the benefit of public notice and comment. We will issue a proposed
notice and the public will have the opportunity to comment if it is
necessary for us to change the productivity or utilization screens used
to determine the FQHC all-inclusive rate or to change the methodology
used to calculate the FQHC payment limit.
Adjustment for Projected FQHC Visit Mix
Comment: One commenter stated that the Secretary did not use
factual data to determine the difference in cost created by the
projected difference in case mix. The commenter believed there is no
evidence that the ratio of physician to mid-level payments made under
Part B have any relation to cost.
Response: Since entities eligible for section 329, 330, and 340
grants will comprise the majority of entities qualifying for the FQHC
program, we anticipate that the frequency of physician services in
FQHCs will be comparable to the frequency of such services in the
former FFHC program, which consisted of section 329 and 330 grantees
paid an all-inclusive rate. As discussed in the preamble to the June
12, 1992 rule, we studied RHC and FFHC visit data to determine whether
there is a difference in the number of physician visits as a percentage
of total visits between the RHC benefit and FFHC program. Visit data
from RHC cost reports indicated that physician visits were 59 percent
of total visits while data from FFHC cost reports indicated that
[[Page 14654]]
physicians visits were 83 percent of total visits.
We recognize that no specific FQHC study has been conducted to
determine the differences in costs between the services of a physician
and those of a mid-level practitioner. We used the amount of payment
for nurse practitioners and physician assistants under usual Part B
rules as a measure of the cost differences between a physician and a
mid-level practitioner. Under Medicare Part B, the amount of payments
for nurse practitioners (section 1833(r)(2)(B) of the Act) and
physician assistants (section 1842(b)(12)(B) of the Act) are generally
75 percent (in the case of services provided in a hospital) and 85
percent (in the case of other services) of what a physician would be
paid for the same service. We used the midpoint of these two
percentages to arrive at 80 percent as proxy for the cost differences
between mid-level practitioners and physicians.
Lacking more specific FQHC cost data, we believe that the payment
amount under Medicare Part B is a reasonable basis for determining
average cost differences between visits of physicians and mid-level
practitioners and for increasing the payment limit to account for the
projected higher number of physician visits under the FQHC benefit as
compared to the RHC benefit. As discussed earlier, we plan to evaluate
actual FQHC cost data. After analysis, we will determine the
appropriateness of the visit mix adjustment.
Primary Care Family Practice Adjustment (15 Percent)
Comment: Section 6102 of OBRA '89 added section 1848 of the Act,
which is the authority for the physician fee schedule. During the first
year of transition to the physician fee schedule there was a general
increase in payment of 15 percent for services provided by primary care
and family practice physicians. As discussed in the preamble to the
interim final rule, we made an adjustment to the FQHC payment limits
accounting for this increase.
One commenter stated that the 15 percent adjustment to the payment
limit only covers the first year of the transition to the fee schedule.
The remaining 4 years to fully implement the fee schedule will result
in further increases. These increases should be recognized.
Response: We have given consideration to the commenter's position.
By 1996, the average payment amount for services typically provided by
family practice physicians will increase by an estimated 28 percent
under the fee schedule, as compared to reasonable charge payments.
Since our intent in creating and applying the family practice
adjustment is to reflect the circumstances of physicians being paid
under the fee schedule, we have decided to provide a comparable
increase to the FQHC payment limits. We are increasing the practitioner
component of the FQHC payment limits by 13 percent to bring the total
increase amount to 28 percent to simulate the estimated increase in
average payment amounts for primary care physicians. This adjustment
will be phased in over 3 years. For calendar year 1994, we have
increased the practitioner portion of the FQHC payment limits by 6.5
percent to correspond with the increase in payments for primary care
services which has resulted from the continued transition to the full
physician fee schedule. We previously announced this increase in the
RHC/FQHC Manual. We will increase the payment limits by 3.25 percent in
calendar year 1995 and calendar year 1996 to account for the full 28
percent increase.
The 28 percent increase is based on estimates published in the
Federal Register (56 FR 59618) regarding the physician fee schedule
regulation dated November 25, 1991; Table 1--Physician Fee Schedule
Impact By Specialty. The 28 percent increase reflects the original
estimation of the difference in payment amounts between what would have
been paid under the reasonable charges payment methodology as compared
to payments under the RBRVS fee schedule for services typically
provided by family practice physicians. We believe it provides the most
appropriate representation of the estimated differences in payment
amounts. We have decided not to reflect the impact of the Medicare
Volume Performance Standards since FQHC services are not subject to
these targets. By adjusting the FQHC limits, we would avoid
disadvantaging FQHC physicians and practitioners relative to physicians
paid under the fee schedule.
Comment: One commenter stated that payments for other practitioners
should also reflect the 15 percent increase.
Response: Implementation of the physician fee schedule resulted in
a general estimated increase of 15 percent in 1992 for family practice
physicians. We applied this increase to the practitioner component of
the payment limit which resulted in a $6.99 increase for fiscal year
1991. This increase applies to the payment limit for each FQHC visit,
mid-level practitioner covered visits, as well as physician visits.
Urban and Rural Determination
Comment: Two commenters indicated that the determination of urban
and rural is unclear. Specific concerns focused on the need for
clarification of specific population standards and whether adjustments
to the classification (as provided for hospitals in Sec. 412.230) are
applicable to FQHCs.
Response: The definition of urban and rural is based entirely upon
the most recent available data from the Bureau of Census and issued by
the Office of Management and Budget. To be classified as an urban
center, an FQHC must be located in a Metropolitan Statistical Area
(MSA) or New England County Metropolitan Area (NECMA). Primary
Metropolitan Statistical Areas (PMSAs) and Consolidated Metropolitan
Statistical Areas (CMSAs) are considered as urban for FQHC
classification purposes. FQHCs that are not in an MSA, PMSA, CMSA or
NECMA cannot be reclassified as an urban FQHC.
Urban areas can either be ``large'' or ``other.'' A large urban
area means an urban area with a population of over one million (or more
than 970,000 in NECMAs). An ``other'' urban area is an urban area that
is not a large urban area and at a minimum includes a city with a
population of 50,000 or more provided that the component county/
counties of the metropolitan statistical area have a total population
of at least 100,000. The intermediary classifies FQHCs based on these
criteria.
Urban and Rural Payment Difference
Comment: Many commenters expressed concerns regarding the urban
payment differential. Specific concerns include:
Historical differences in payment policy have affected the
recruitment and retention of qualified health professionals and have
caused a false perception that rural areas are less expensive.
Labor, transportation and other costs can be higher in
rural areas.
Rural centers may expand services to compensate for the
closing of small rural hospitals. Thus, they may be providing the only
available radiology and laboratory services in the area.
The FFHC study used to determine urban and rural cost
differences was not appropriate. Urban and rural visit mix and services
are not necessarily comparable and cost differences are not related to
location; cost differences are more likely the result of rural
facilities providing a more limited scope of
[[Page 14655]]
services. Therefore, we do not think this factor is relevant to payment
limits.
Response: Our analysis of FFHC all-inclusive rates indicates a
difference in urban and rural costs. FFHCs were authorized to provide
the same scope of services regardless of urban or rural status. The
analysis of FFHC all-inclusive rates included 128 urban and 85 rural
FFHCs throughout the country. The analysis indicates that the median
all-inclusive rate for FFHCs located in urban areas (as determined by
using Bureau of Census data) is 16.3 percent higher than the median
all-inclusive rate in rural areas. Since FFHCs were subject to the same
State-wide payment limit without regard to urban/rural location, rural
FFHCs did not have different incentives than urban FFHCs to hold down
costs. Further, we obtained data from the Public Health Service based
on the BCRR Report data and compared the cost per visit of 129 urban
and 260 rural Community/Migrant Health Centers (section 329/330
grantees) that did not participate in the FFHC program. The BCRR Report
cost data indicated that the cost per visit for services was
significantly higher in urban centers as compared to rural centers.
While different costs are reported on the BCRR Report as compared to
the Medicare cost report, we believe these data support our use of FFHC
cost data as proxy for urban and rural FQHC cost differences. We will
closely study urban and rural cost differences in the FQHC cost data
analysis.
We understand that rural centers might expand services to
compensate for the closing of small rural hospitals and that many of
these services may be outside of the FQHC benefit. While the expansion
of services may extend beyond the FQHC scope of services, the Medicare
per visit payment limits apply to covered FQHC services only. Medicare
FQHCs can receive additional payments through the carrier for Medicare
Part B services that are not included as FQHC covered services.
Therefore, we do not think this factor is relevant to setting the
payment limits.
Comment: Some commenters believed that the urban and rural payment
limit difference is inconsistent with general Federal policy direction.
They stated that the Congress recognized that urban and rural providers
should be treated equally by terminating the urban and rural
Prospective Payment System (PPS) payment differential in fiscal year
1995.
Response: We would like to clarify that the Congress has not
eliminated geographic payment differences for payment of PPS hospitals.
Effective in fiscal year 1995, there will be two PPS standardized
amounts, large urban and other. The rural and other urban PPS
standardized amounts will be combined into one amount and a separate
large urban standardized amount will continue to distinguish large
urban areas. The hospital wage index will be applied to these
standardized amounts. As such, payment amounts will generally be higher
in urban areas as compared to rural areas. Given the current data
limitations, alternative geographic payment limit adjustments are not
feasible at this time. As mentioned previously, we will closely study
urban and rural cost differences in the FQHC cost data analysis.
MEI Index
Comment: One commenter expressed concern that separate application
of the MEI to urban and rural payment limits will steadily exacerbate
the urban-rural differential.
Response: Although we recognize that the dollar difference between
urban and rural payment limits will increase, the percentage difference
of 16.3 percent will remain constant.
Comment: One commenter requested clarification regarding
publication of the MEI increase.
Response: The annual MEI updates applicable to the FQHC payment
limits will be announced in the RHC and FQHC manual, HCFA Publication
27 of the HCFA Program Instructions Issuances System.
We note that the preamble of the June 12, 1992 rule stated that
FQHC payment limits would be updated by the MEI applicable to primary
care physicians. We would like to clarify that in the absence of a
specific MEI applicable to primary care physicians, the FQHC payment
limits will be updated by the general MEI.
Exceptions Option
Comment: Two commenters expressed opposition to the exceptions
option. They stated that the exceptions option is an unreasonable
imposition creating unnecessary administrative costs. In addition,
requiring FQHCs to wait an entire year to file an exception will create
cash flow problems for those granted an exception. Regional payment
limits were also suggested as an alternative to the exceptions process.
Response: The exceptions process allows former FFHCs the
opportunity to retain the FFHC method of payment with minor adjustments
for the FQHC scope of services for a 3-year period under certain
conditions. No FQHC is required to seek an exception; rather a center
may choose this option if the center can document a disadvantage due to
a decrease in revenues as a result of the application of the FQHC
payment limit. As discussed in the preamble of the interim final rule,
this determination will be made based on a filing of the FFHC cost
report.
Any additional administrative costs resulting from the exceptions
option are allowable costs that can be included in the determination of
the all-inclusive rate. However, we expect exceptions to be limited in
number and do not expect former FFHCs to be adversely affected. We
believe it is essential that all centers, including former FFHCs, file
based on the FQHC methodology so that we can gather cost data for our
analysis.
We considered developing regional limits; however, we decided not
to do so. We believe that the Congress designed the FQHC benefit to
parallel the RHC benefit. Therefore, we want the FQHC payment methods
to be as consistent as possible with the RHC payment methods, which do
not include regional cost limits. As discussed earlier, we will collect
and analyze FQHC cost data to determine if any changes are necessary.
Billing Issues
Comment: Two commenters requested clarification of the billing
mechanism for non-FQHC services. One commenter noted that provisions
for assignment of physician claims directly to the center were
necessary so that the employment relationship between the physician and
center is not disrupted.
Response: In order to bill for non-FQHC services a clinic must have
a separate Part B billing number. The FQHC must obtain the billing
number from the Medicare Part B carrier. Entities that already have
supplier numbers for use in billing Part B carriers need to contact the
carriers' Provider Relations Staff to see if their FQHC status
necessitates the issuance of new Part B billing numbers. FQHC provider
numbers assigned for the purpose of billing the intermediary (Aetna)
cannot be used to bill Part B carriers. HCFA regional offices and
Medicare carriers have been requested to assist FQHCs that require new
Part B billing numbers.
We agree with the commenter on the issue of provisions of
assignment. Section 1842(b)(6) of the Act specifies that Medicare may
pay the center in which the physician provides services if there is a
contractual arrangement between the facility and the provider.
Therefore, there are existing provisions for assignment of physician
claims directly to the center.
Comment: One commenter noted the difference in billing practices
between Medicaid and Medicare, and
[[Page 14656]]
recommended that all FQHC services for both programs be billed on the
HCFA-1500 using Common Procedure Terminology (CPT) Codes.
Response: There is no requirement for Medicare and Medicaid billing
to be the same. Since payment for services covered under the FQHC
benefit is made on a cost-related basis, claims are processed by a
fiscal intermediary. All freestanding FQHC claims are processed by
Aetna. Provider-based FQHC claims are processed by the intermediary
that handles the main provider's claims.
The Medicare Fiscal Intermediaries' systems are set up to process
bills using the HCFA-1450 and the Carriers' systems are set up to
process claims using the HCFA-1500. The HCFA-1450 has different data
elements from the HCFA-1500. To use the HCFA-1500 for cost-related
payment would require a complete revision of the billing systems
maintained by our contractors.
To recap, freestanding FQHCs must use the HCFA-1500 to bill for non
FQHC services since they are not paid on a cost basis. The local Part B
carrier pays for such services subject to the routine Part B coverage
and payment provisions. Provider-based FQHCs bill the intermediary for
all services on the HCFA-1450.
IV. Provisions of the Final Regulations
For the most part, as stated elsewhere in this preamble, this final
rule does not change the provisions of the prior final rule on which we
solicited comments. Those provisions of this final rule that differ
significantly from the earlier rule are:
The definition of specialized nurse practitioner is
removed (Sec. 405.2401 and Sec. 405.2468);
A freestanding FQHC must terminate other provider
agreements at the same time it becomes an FQHC
(Sec. 405.2430(a)(1)(iii));
The services of FQHC staff may be furnished under contract
(Secs. 405.2450, 405.2468(b)(1), and 491.8(a)(3));
In the definition of ``visit,'' (now in Sec. 405.2463) an
allowance is made for two visits per day if the patient has a
``medical'' and an ``other'' health visit on the same day
(Sec. 405.2463);
Nurse-midwife services are added to the list of covered
FQHC services (Sec. 405.2446);
Perinatal care and tuberculosis testing for certain high
risk patients are added to the list of preventive services that are
covered by an FQHC (Sec. 405.2448);
Payment for pneumococcal and influenza vaccines and their
administration at 100 percent of Medicare reasonable cost is added to
Sec. 405.2466 (Note that payment for pneumococcal vaccine is not a new
provision, as it was included in the June 12, 1992 final rule);
We clarify that FQHCs must be located in a medically
undeserved area or serve a medically undeserved population
(Sec. 491.5);
RHCs, but not FQHCs, retain certification even if the area
loses its rural shortage designation (Sec. 491.5);
Clinical psychologists provide FQHC services without the
supervision of a physician (Sec. 491.8);
We clarify that we have adjusted the FQHC payment limits
to correspond with the estimated increase in payments for primary care
services resulting from the continued transition to the full fee
schedule. The current calendar year payment limits reflect this policy
and a further increase is forthcoming in 1995.
V. Collection of Information Requirements
This final rule does not contain any information collection or
recordkeeping requirements that are subject to review by the Office of
Management and Budget under the Paperwork Reduction Act of 1980 (44
U.S.C. 3501 et seq.).
VI. Regulatory Impact Statement
A. Introduction
We generally prepare a regulatory flexibility analysis that is
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
through 612) unless the Secretary certifies that a final rule will not
have a significant economic impact on a substantial number of small
entities. For purposes of the RFA, all FFHCs, FQHCs, and RHCs are
considered to be small entities. Individuals and States are not
included in the definition of a small entity.
In addition, section 1102(b) of the Act requires the Secretary 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 50 beds.
B. Provisions of the Final Regulations
This final rule incorporates, with only minor technical and
clarifying changes, the provisions of the final rule with comment
published June 12, 1992 (57 FR 24961) which provided for coverage and
payment of services provided by FQHCs, a category of health facility
established by section 4161 of OBRA '90 and modified by OBRA '93. FQHC
services are defined as the same type of primary health care services
provided by rural health clinics under the Medicare program, plus
preventive primary health services (services not previously covered by
Medicare). An FQHC is an entity that is receiving a grant under section
329, 330, or 340 of the PHS Act; a non-grant receiving entity that is
determined by the Secretary to meet the PHS Act requirements for
receiving such a grant; a facility that has been identified by the
Secretary as a comprehensive federally funded health center as of
January 1, 1990; or is an outpatient health program or facility
operated by a tribe or tribal organization under the Indian Self-
determination Act or by an urban Indian organization receiving funds
under title V of the Indian Health Care Improvement Act as of October
1, 1991. As of March 1994, there were 1,260 participating FQHCs.
C. Positive Effect of Regulations
In the initial regulatory impact statement, we indicated that the
provisions of the final rule with comment will expand Medicare payment
to community and migrant health center grantees and similar entities
that qualify as FQHCs and serve the working poor. We noted that
reporting requirements are less burdensome than previous requirements
under the FFHC payment methodology (FQHCs are required to submit 2 cost
reports annually, FFHCs were required to submit 3). In addition, these
provisions benefit both beneficiaries and FQHCs by expanding Medicare
coverage and payment to include primary and preventive health care
services furnished by physicians and other health practitioners.
D. Comments on Initial Regulatory Impact Statement
We received one comment on the initial regulatory impact statement
published in the Federal Register June 12, 1992. The commenter stated
that the final rule with comment failed to include a certification that
the rule would not have an effect on small entities. We disagree with
the commenter. The final paragraph of the regulatory impact statement
stated that we determined, and the Secretary certified, that the final
rule did not meet the requirements to be determined a major rule, nor
did it meet criteria as having a significant economic impact on a
substantial number of small entities.
[[Page 14657]]
E. Summary
Because this final regulation makes only minor technical and
clarifying changes to the final rule with comment published June 12,
1992, we are not preparing analyses for either the RFA or section
1102(b) of the Act, since we have determined, and the Secretary
certifies, that this final rule will not result in a significant
economic impact on a substantial number of small entities and will not
have a significant impact on the operations of a substantial number of
small rural hospitals.
In accordance with the provisions of Executive Order 12866, this
regulation was not 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, 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 chapter IV is amended as follows:
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
Subpart X--Rural Health Clinic and Federally Qualified Health
Center Services
A. Part 405, subpart X, is amended as follows:
1. The authority citation for subpart X continues to read as
follows:
Authority: Secs. 1102, 1833, 1861(aa), 1871 of the Social
Security Act; 42 U.S.C. 1302, 1395l, 1395x(aa), and 1395hh.
Sec. 405.2401 Scope and definitions. [Amended]
2. In Sec. 405.2401, paragraph (b) is amended by removing the
definitions of ``specialized nurse-practitioner'' and ``visit.''
3. Section 405.2430 is amended by revising paragraph (a)(1)(iii) to
read as follows:
Sec. 405.2430 Basic requirements.
(a) Filing procedures. (1) * * *
(iii) The FQHC terminates other provider agreements, unless the
FQHC assures HCFA that it is not using the same space, staff and
resources simultaneously as a physician's office or another type of
provider or supplier. A corporate entity may own other provider types
as long as the provider types are distinct from the FQHC.
* * * * *
4. Section 405.2446 is amended by revising paragraph (b) to read as
follows:
Sec. 405.2446 Scope of services.
* * * * *
(b) FQHC services that are paid for under this subpart are
outpatient services that include the following:
(1) Physician services specified in Sec. 405.2412.
(2) Services and supplies furnished as an incident to a physician's
professional services, as specified in Sec. 405.2413.
(3) Nurse practitioner or physician assistant services specified in
Sec. 405.2414.
(4) Services and supplies furnished as an incident to a nurse
practitioner or physician assistant services, as specified in
Sec. 405.2415.
(5) Clinical psychologist and clinical social worker services
specified in Sec. 405.2450.
(6) Services and supplies furnished as an incident to a clinical
psychologist or clinical social worker services, as specified in
Sec. 405.2452.
(7) Visiting nurse services specified in Sec. 405.2416.
(8) Nurse-midwife services specified in Sec. 405.2401.
(9) Preventive primary services specified in Sec. 405.2448 of this
subpart.
* * * * *
5. In Sec. 405.2448(b), the semicolon at the end of each paragraph
is changed to a period, paragraph (b)(20) is redesignated as (b)(21),
paragraphs (b)(6) and (b)(19) are revised, and a new paragraph (b)(20)
is added to read as follows:
Sec. 405.2448 Preventive primary services.
* * * * *
(b) * * *
(6) Perinatal services.
* * * * *
(19) Risk assessment and initial counseling regarding risks.
(20) Tuberculosis testing for high risk patients.
* * * * *
6. Section 405.2450 is amended by revising paragraph (a)(1) to read
as follows:
Sec. 405.2450 Clinical psychologist and clinical social worker
services.
(a) For clinical psychologist or clinical social worker
professional services to be payable under this subpart, the services
must be--
(1) Furnished by an individual who owns, is employed by, or
furnishes services under contract to the FQHC;
* * * * *
7. A new Sec. 405.2463 is added to read as follows:
Sec. 405.2463 What constitutes a visit.
(a) Visit. (1) A visit is a face-to-face encounter between a clinic
or center patient and a physician, physician assistant, nurse
practitioner, nurse-midwife, or visiting nurse.
(2) For FQHCs, a visit also means a face-to-face encounter between
a patient and a qualified clinical psychologist or clinical social
worker.
(3) 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 one of the following conditions exist:
(i) After the first encounter, the patient suffers illness or
injury requiring additional diagnosis or treatment.
(ii) For FQHCs, the patient has a medical visit and an other health
visit, as defined in paragraphs (b) and (c) of this section.
(4) Payment. (i) Medicare pays for two visits per day when the
conditions in paragraph (a)(3) of this section are met.
(ii) In all other cases, payment is limited to one visit per day.
(b) Medical visit. For purposes of paragraph (a)(3) of this
section, a medical visit is a face-to-face encounter between an FQHC
patient and a physician, physician assistant, nurse practitioner,
nurse-midwife, or visiting nurse.
(c) Other health visit. For purposes of paragraph (a)(3) of this
section, an other health visit is a face-to-face encounter between an
FQHC patient and a clinical psychologist, clinical social worker, or
other health professional for mental health services.
8. Section 405.2466 is amended by adding a new paragraph (b)(1)(iv)
to read as follows:
Sec. 405.2466 Annual reconciliation.
* * * * *
(b) * * *
(1) * * *
(iv) For rural health clinics and FQHCs, payment for pneumococcal
and influenza vaccine and their administration is 100 percent of
Medicare reasonable cost.
* * * * *
9. Section 405.2468 is amended by revising paragraphs (b)(1) and
(b)(3), and (d)(2) to read as follows:
Sec. 405.2468 Allowable costs.
* * * * *
[[Page 14658]]
(b) * * *
(1) Compensation for the services of a physician, physician
assistant, nurse practitioner, nurse-midwife, visiting nurse, qualified
clinical psychologist, and clinical social worker who owns, is employed
by, or furnishes services under contract to an FQHC. (RHCs are not paid
for services furnished by contracted individuals other than
physicians.)
* * * * *
(3) Costs of services and supplies incident to the services of a
physician, physician assistant, nurse practitioner, nurse-midwife,
qualified clinical psychologist, or clinical social worker.
* * * * *
(d) * * *
(2) Screening guidelines are used to assess the costs of services,
including the following:
(i) Compensation for the professional and supervisory services of
physicians and for the services of physician assistants, nurse
practitioners, and nurse-midwives.
(ii) Services of physicians, physician assistants, nurse
practitioners, nurse-midwives, visiting nurses, qualified clinical
psychologists, and clinical social workers.
(iii) The level of administrative and general expenses.
(iv) Staffing (for example, the ratio of other clinic or center
personnel to physicians, physician assistants, and nurse
practitioners).
(v) The reasonableness of payments for services purchased by the
clinic or center, subject to the limitation that the costs of physician
services purchased by the clinic or center may not exceed amounts
determined under the applicable provisions of subpart E of part 405 or
part 415 of this chapter.
* * * * *
B. Part 491 is amended as follows:
PART 491--CERTIFICATION OF CERTAIN HEALTH FACILITIES
1. 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 Services Act (42 U.S.C. 263a).
2. In part 491, the term, ``Federally qualified health center'' is
changed to ``FQHC'' wherever the term appears.
3. Section 491.5 is amended by revising paragraphs (a) and (b)(1),
and adding new paragraphs (e) and (f) to read as follows:
Sec. 491.5 Location of clinic or center.
(a) Basic requirements. (1) An RHC is located in a rural area that
is designated as a shortage area.
(2) An FQHC is located in a rural or urban area that is designated
as either a shortage area or an area that has a medically underserved
population.
(3) Both the RHC and the FQHC may be permanent or mobile units.
(i) Permanent unit. The objects, equipment, and supplies necessary
for the provision of the services furnished directly by the clinic or
center are housed in a permanent structure.
(ii) Mobile unit. The objects, equipment, and supplies necessary
for the provision of the services furnished directly by the clinic or
center are housed in a mobile structure, which has fixed, scheduled
location(s).
(iii) Permanent unit in more than one location. If clinic or center
services are furnished at permanent units in more than one location,
each unit is independently considered for approval as a rural health
clinic or for approval as an FQHC.
(b) Exceptions. (1) HCFA does not disqualify an RHC approved under
this subpart if the area in which it is located subsequently fails to
meet the definition of a rural, shortage area.
* * * * *
(e) Medically underserved population. A medically underserved
population includes the following:
(1) A population of an urban or rural area that is designated by
PHS as having a shortage of personal health services.
(2) A population group that is designated by PHS as having a
shortage of personal health services.
(f) Requirements specific to FQHCs. An FQHC approved for
participation in Medicare must meet one of the following criteria:
(1) Furnish services to a medically underserved population.
(2) Be located in a medically underserved area, as demonstrated by
an application approved by PHS.
4. Section 491.8 is amended by revising paragraphs (a)(3), (a)(6)
and (b)(1)(i) to read as follows:
Sec. 491.8 Staffing and staff responsibilities.
(a) Staffing. * * *
(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 center.
* * * * *
(6) A physician, nurse practitioner, physician assistant, nurse-
midwife, clinical social worker, or clinical psychologist is available
to furnish patient care services at all times the clinic or center
operates. In addition, for rural health clinics, a nurse practitioner
or a physician assistant is available to furnish patient care services
at least 60 percent of the time the clinic operates.
(b) Physician responsibilities. (1) The physician--
(i) Except for services furnished by a clinical psychologist in an
FQHC, which State law permits to be provided without physician
supervision, provides medical direction for the clinic's or center's
health care activities and consultation for, and medical supervision
of, the health care staff.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: October 6, 1995.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: March 18, 1996.
Donna E. Shalala,
Secretary.
[FR Doc. 96-7787 Filed 4-2-96; 8:45 am]
BILLING CODE 4120-01-P
