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CMS Finalizes Payment System for FQHCs

The Centers for Medicare & Medicaid Services (CMS) issued a final rule with comment period regarding the prospective payment system (PPS) for federally qualified health centers (FQHCs). As outlined in the Affordable Care Act, the rule establishes a new Medicare PPS for FQHCs. Beginning as early as Oct. 1, FQHCs could see an increase in Medicare payments by as much as 32 percent as a result of the new system.

Under the new PPS, FQHCs will receive a single Medicare encounter rate per beneficiary per day for all services provided, with some exceptions. America’s Essential Hospitals raised concern that the proposed rule removed the ability for FQHCs to bill separately for mental health services provided on the same day as a primary care visit. The association is pleased CMS modified that proposal in the final rule to allow an exception for FQHCs to bill separately for same day mental health services. Additionally, the payment rates will be adjusted for geographic variation in costs. However, the geographic adjustment will not incorporate malpractice expenses, which America’s Essential Hospitals urged CMS to include.

The final rule with comment period will be published in the Federal Register May 2. CMS will accept comments until July 1 and will address comments in a final rule to be issued later this year.

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About the Author

Gontscharow is a senior policy analyst for America's Essential Hospitals.

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