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5 reimbursement strategies for rural health clinics

Aug 14, 2023

The end of the COVID-19 public health emergency has brought significant changes to reimbursement for rural health clinics (RHCs).

If RHCs want to successfully navigate the evolving reimbursement landscape, they need to stay proactive and adaptable. Understanding changing payment methodologies, regulations in your state and the latest updates from CMS will help your RHC stay viable and able to continue to provide essential healthcare services to rural communities.

Here are five reimbursement strategies your RHC may want to consider:

1. Mobile rural health clinics

Mobile rural health clinics are growing in popularity as a way for RHCs to reach a larger patient base. Their flexibility gives providers the ability to bridge the gap between rural communities and healthcare services while using existing RHC certifications and rates.

Mobile rural health clinics do not have to be certified on their own — existing RHC-certified locations can add them to an existing Medicare enrollment — although they can be.

These mobile clinics are also not required to meet the same conditions of participation as an RHC. For example, a mobile clinic would not need to provide the six basic lab tests or include advanced practice providers to qualify. They are considered an extension of the existing RHC, and specialty services could even be the only services provided in these locations.

A mobile RHC has to operate with a consistent schedule, and the location must have a current medically underserved area or a health professional shortage area designation. In addition, RHCs interested in using mobile clinics should check the specific state requirements that may be in place.

To maximize reimbursement, consider completing an analysis to see which RHC (if more than one exists) to attach the mobile RHC enrollment. Using this strategy, clinics will want to look at the existing Medicare and Medicaid rates and patient payor populations of the service area being considered.

2. Telehealth behavior health providers

With the permanent ability for RHCs to provide distant site mental health services and receive payment from Medicare under the all-inclusive encounter rate, RHCs may want to consider implementing this service line. And until January 1, 2025, the in-person requirement for these services has been waived.

CMS has not clarified whether the provider has to be within the RHC walls, meaning clinics can contract with remote behavior health providers to offer telehealth visits while receiving the AIR for those services.

Beginning January 1, 2024, CMS will recognize two additional RHC practitioners with services paid at the AIR: marriage and family therapists and mental health counselors.

3. Hospital outpatient department status

Changes to payments for provider-based RHCs may prompt grandfathered RHCs to analyze the services that they provide and bills as part of their certification.

RHCs can consider moving certain specialty services out of the RHC that cause a productivity standard issue and/or reduce the cost-per-visit below the grandfathered cap rate. Under a HOPD billing methodology, it may be a reimbursement win overall for the hospital and clinics.

The treatment of RHC and HOPD clinics varies drastically from state to state regarding Medicaid payment. Therefore, it is also important to understand how both of these types of entities are reimbursed in your state and analyze the payor type.

4. Change of address

CMS allows clinics with grandfathered RHC status to keep their existing rates even if they move locations. For providers, this lets RHCs be strategic about which locations may be optimal as a certified RHC with a grandfathered rate.

A hospital that has grandfathered RHC rates and other potential RHC locations may want to explore moving their existing certification to a clinic that has a higher Medicare and Medicaid population. That clinic location would receive the grandfathered rate, while the less utilized clinic could still apply for RHC status and receive the new federal capped rates. 

Again, analyzing the potential reimbursement gain and including the Medicaid reimbursement effect would be critical.

5. Medicaid rate review

Reviewing the RHC Medicaid rates in your state and being aware of opportunities that may exist to increase them helps to ensure that your clinic is optimizing reimbursement.

The financial impact of RHC status will depend on factors such as your state's reimbursement rates and your clinic's payer mix. When reviewing, you need to know whether the potential loss in Medicare reimbursement outweighs the potential gain in Medicaid reimbursement.

A change in scope of services request may also be available in your state, which could potentially increase the RHC Medicaid rate. In some states, the addition of a service line such as mental health could trigger a change in scope and could result in a readjustment of a clinic’s RHC rate.

How Wipfli can help

Wipfli’s nationwide team is ready to help your RHC overcome its unique challenges. We can provide guidance on everything from navigating complex Medicare and Medicaid requirements to right-size services for rural environments.

Contact us today to learn more about our proven healthcare solutions.

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Katie Jo Raebel, CPA
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