Rural health clinic
Encyclopedia
A Rural Health Clinic is a clinic located in a rural, medically under-served area in the United States
that has a separate reimbursement structure from the standard medical office under the Medicare
and Medicaid
programs. RHCs were established by the Rural Health Clinics Act (P.L. 95-210), (Section 1905 of the Social Security Act). The program was established to address an inadequate supply of physicians serving Medicare beneficiaries and Medicaid recipients in rural areas and to increase the utilization of non-physician practitioners. As of 2003, there were approximately 3,600 RHCs in the U.S.
To encourage the development of RHCs serving rural, under-served communities, Medicare reimburses RHCs based on their reasonable and allowable costs. This is different than most medical providers in the United States, which are paid on a prospective payment system (PPS) under Medicare to lower overall costs. If a RHC is owned by a hospital with fewer than fifty beds, this cost-based payment is without a cap. If, however, the RHC owned by a hospital with more than fifty beds or is considered standalone or freestanding, the cost-based reimbursement is capped. This cap is adjusted annually for inflation and is at about $75 per visit. Medicaid reimbursement for RHCs, after the Benefits Improvement and Protection Act of 2000, is based on a state-specific PPS.
At the time of creation of an RHC, the clinic must be located in an area that has the following characteristics:
There are certain exceptions to the general location requirement for "essential providers," including sole community providers, major community providers, and specialty clinics.
Like other medical providers, RHCs must provide certain services in order to qualify for the program. In addition, a RHC must employ a nurse practitioner (NP) or a physician assistant (PA) and have a NP, PA, or certified-nurse midwife available at least 50 percent of the time the RHC operates.
and the HHS Office of the Inspector General
both released studies that showed that RHC status was being used by non-rural clinics to retain enhanced reimbursement. Congress changed this in the Balanced Budget Act of 1997
(BBA) by eliminating a grandfather clause for RHCs that had allowed them to retain their status despite no longer qualifying for the program.
The Centers for Medicare and Medicaid Services
(CMS) released final regulations more than three years after a proposed rule to implement the BBA requirements eliminating the grandfather clause. Before the rule could take effect, lobbying groups, such as the American Medical Association
(AMA), National Rural Health Association
(NRHA), American Academy of Family Physicians
(AAFP), and the National Association of Rural Health Clinics (NARHC), put pressure on Congress to change the law. Within the Medicare Modernization Act of 2003
(MMA), Congress included a requirement that CMS finalize any rule within three years of releasing a proposed rule to effectively kill the proposed rule.
On June 26, 2008, CMS released a second proposed rule to implement the BBA required elimination of the grandfather clause and to make changes to the RHC and Federally Qualified Health Center
(FQHC) conditions of participation. These changes to the conditions of participation included a new quality assessment program, infection control, and changes to the Medicare payment program. Advocacy groups, such as the AMA, NRHA, and NARHC, responded with opposition to the changes in payment.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
that has a separate reimbursement structure from the standard medical office under the Medicare
Medicare (United States)
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...
and Medicaid
Medicaid
Medicaid is the United States health program for certain people and families with low incomes and resources. It is a means-tested program that is jointly funded by the state and federal governments, and is managed by the states. People served by Medicaid are U.S. citizens or legal permanent...
programs. RHCs were established by the Rural Health Clinics Act (P.L. 95-210), (Section 1905 of the Social Security Act). The program was established to address an inadequate supply of physicians serving Medicare beneficiaries and Medicaid recipients in rural areas and to increase the utilization of non-physician practitioners. As of 2003, there were approximately 3,600 RHCs in the U.S.
To encourage the development of RHCs serving rural, under-served communities, Medicare reimburses RHCs based on their reasonable and allowable costs. This is different than most medical providers in the United States, which are paid on a prospective payment system (PPS) under Medicare to lower overall costs. If a RHC is owned by a hospital with fewer than fifty beds, this cost-based payment is without a cap. If, however, the RHC owned by a hospital with more than fifty beds or is considered standalone or freestanding, the cost-based reimbursement is capped. This cap is adjusted annually for inflation and is at about $75 per visit. Medicaid reimbursement for RHCs, after the Benefits Improvement and Protection Act of 2000, is based on a state-specific PPS.
At the time of creation of an RHC, the clinic must be located in an area that has the following characteristics:
- defined as non-urban by the United States Census BureauUnited States Census BureauThe United States Census Bureau is the government agency that is responsible for the United States Census. It also gathers other national demographic and economic data...
- defined as medically under-served by one of the following characteristics:
- Primary Care Geographic Health Professional Shortage Area (HPSA) under Section 332(a)(1)(A) of the Public Health Service ActPublic Health Service ActThe Public Health Service Act is a United States federal law enacted in 1944. The full act is captured under Title 42 of the United States Code "The Public Health and Welfare", Chapter 6A "Public Health Service"....
(PHS Act); - Primary Care Population-Based HPSA under Section 332(a)(1)(B) of the PHS Act;
- Medically Underserved Area under Section 330(b)(3) of the PHS Act; or
- Governor-designated and Secretary-certified shortage area under Section 6213(c) of the Omnibus Budget Reconciliation Act of 1989.
- Primary Care Geographic Health Professional Shortage Area (HPSA) under Section 332(a)(1)(A) of the Public Health Service Act
There are certain exceptions to the general location requirement for "essential providers," including sole community providers, major community providers, and specialty clinics.
Like other medical providers, RHCs must provide certain services in order to qualify for the program. In addition, a RHC must employ a nurse practitioner (NP) or a physician assistant (PA) and have a NP, PA, or certified-nurse midwife available at least 50 percent of the time the RHC operates.
Criticism and proposed regulatory changes
The RHC program was criticized in the 1990s for allowing enhanced reimbursement to remain for RHCs, even if that clinic is no longer in a rural or under-served community. The Government Accountability OfficeGovernment Accountability Office
The Government Accountability Office is the audit, evaluation, and investigative arm of the United States Congress. It is located in the legislative branch of the United States government.-History:...
and the HHS Office of the Inspector General
Office of the Inspector General
Office of the Inspector General is an office that is part of Cabinet departments and independent agencies of the United States federal government as well as some state and local governments. Each office includes an Inspector General and employees charged with identifying, auditing, and...
both released studies that showed that RHC status was being used by non-rural clinics to retain enhanced reimbursement. Congress changed this in the Balanced Budget Act of 1997
Balanced Budget Act of 1997
The Balanced Budget Act of 1997, , was signed into law on August 5, 1997. It was an omnibus legislative package enacted using the budget reconciliation process and designed to balance the federal budget by 2002....
(BBA) by eliminating a grandfather clause for RHCs that had allowed them to retain their status despite no longer qualifying for the program.
The Centers for Medicare and Medicaid Services
Centers for Medicare and Medicaid Services
The Centers for Medicare & Medicaid Services , previously known as the Health Care Financing Administration , is a federal agency within the United States Department of Health and Human Services that administers the Medicare program and works in partnership with state governments to administer...
(CMS) released final regulations more than three years after a proposed rule to implement the BBA requirements eliminating the grandfather clause. Before the rule could take effect, lobbying groups, such as the American Medical Association
American Medical Association
The American Medical Association , founded in 1847 and incorporated in 1897, is the largest association of medical doctors and medical students in the United States.-Scope and operations:...
(AMA), National Rural Health Association
National Rural Health Association
The National Rural Health Association is a national nonprofit professional association in the United States with more than 18,000 members. The association’s mission is to provide leadership on rural health issues, which it attempts to carry out through education, communication, and advocacy...
(NRHA), American Academy of Family Physicians
American Academy of Family Physicians
The American Academy of Family Physicians was founded in 1947 to promote the science and art of family medicine. It is one of the largest medical organizations in the United States, with over 100,000 members...
(AAFP), and the National Association of Rural Health Clinics (NARHC), put pressure on Congress to change the law. Within the Medicare Modernization Act of 2003
Medicare Prescription Drug, Improvement, and Modernization Act
The Medicare Prescription Drug, Improvement, and Modernization Act is a federal law of the United States, enacted in 2003. It produced the largest overhaul of Medicare in the public health program's 38-year history.The MMA was signed by President George W...
(MMA), Congress included a requirement that CMS finalize any rule within three years of releasing a proposed rule to effectively kill the proposed rule.
On June 26, 2008, CMS released a second proposed rule to implement the BBA required elimination of the grandfather clause and to make changes to the RHC and Federally Qualified Health Center
Federally Qualified Health Center
A Federally Qualified Health Center is a reimbursement designation in the United States, referring to several health programs funded under the Health Center Consolidation Act...
(FQHC) conditions of participation. These changes to the conditions of participation included a new quality assessment program, infection control, and changes to the Medicare payment program. Advocacy groups, such as the AMA, NRHA, and NARHC, responded with opposition to the changes in payment.