Policy & Regulation News

CMS falls behind on regulating rural health clinics

By Elizabeth Snell

- The Centers for Medicare & Medicaid Services (CMS) has not issued final regulations to a portion of Rural Health Clinics (RHCs) that would enable those facilities to be considered an essential healthcare provider, according to a recent report from the Department of Health & Human Services (HHS).

The Balanced Budget Act of 1997 (BBA) states that facilities are not indefinitely certified as RHCs, and could be terminated if they are not considered to be an “essential provider.” This means that an RHC certification applies only to facilities in areas that would otherwise be underserved, rather than in rural areas that are designated as health care shortage areas but have high concentrations of medical providers.

“Approximately 12 percent of RHCs no longer met the location requirements in 2013,” reported HHS. “Pursuant to the BBA, these RHCs should continue to qualify as RHCs-and receive enhanced reimbursement-only if they are determined to be essential providers. However, CMS has yet to issue final regulations that would allow RHCs that do not meet the location requirements to qualify as essential-provider RHCs.”

There are different reasons why a facility would no longer be considered an RHC. For example, health care shortage areas and urbanized areas change periodically, HHS stated. Health professional shortage areas (HPSAs) are updated approximately every four years, while urbanized areas are updated every 10 years with the Census.

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  • For the study, HHS mapped the latitudes and longitudes of 3,521 RHCs and used the 2013 boundaries of urbanized areas and health care shortage areas to find the RHCs that did not meet the location requirements.

    HHS also found that of the RHCs not meeting location requirements, 59 percent are in areas not designated as shortage areas, while 39 percent are located in urbanized areas. The Medicare program and its beneficiaries paid approximately $132 million to these facilities in 2012.

    Moreover, the number of RHCs that no longer meet the location requirements has increased by approximately 56 percent since 2003, HHS found. At that time, 279 RHCs did not meet the location requirements.

    HHS recommended in its report that CMS issue regulations to ensure that RHCs determined to be essential providers remain certified as RHCs. That way, only RHCs determined to be essential providers continue to receive enhanced reimbursements.

    CMS responded to the report but did not concur or disagree with the recommendation, HHS stated.

    “We continue to encourage CMS to issue regulations to ensure that RHCs determined to be essential providers remain certified as RHCs, as doing so will help protect Medicare and Medicaid dollars from going to providers that no longer qualify for the enhanced reimbursements that RHCs receive,” the report’s authors said. “Without regulations that define essential provider criteria, all RHCs—including those that no longer meet the location requirements— remain certified and continue to receive enhanced Medicare and Medicaid reimbursements.”