OHCA proposes rural health clinic change

Posted on: 5/17/19

The Oklahoma Medicaid program plans to change their rural health clinic (RHC) payment rate methodology effective July 1, 2019. On May 7, the Oklahoma Health Care Authority (OHCA) posted a draft State Plan Amendment (SPA) on RHC reimbursement methodologies on their website. OHCA is accepting comments on the proposal through their website until June 6.

The RHC proposal went to OHCA’s State Plan Amendment Rate Committee today, May 17.

Following a Feb. 21 meeting with hospitals operating RHCs, OHA recommended that OHCA consider adopting the New Mexico Medicaid program’s method of paying the Medicare interim per-visit rate shown on interim rate letters from the Medicare Administrative Contractor (MAC) for each RHC.

After further talks with cost report consultants, OHA recommended to OHCA last month that the Worksheet M series from Medicare cost reports would be a better source of Medicare RHC payment rate information than interim rate letters from the MAC, for several reasons:

• The MAC will often set a rate lower than cost on the interim rate letter, since the final payment is subject to cost report settlement. OHCA proposes to make no cost settlement.
• The MAC may do two RHC rate reviews a year; one based on the as-filed cost report, and one updated with supplementary information the hospital provides. The interim rate is updated based on new information. It is unclear if OHCA intends to reprocess claims if the MAC issues a new rate letter for the same fiscal period.
• Some RHCs serve only non-Medicare individuals, such as pediatric and obstetric RHCs. The MAC does not provide rate letters for these clinics. However, the hospital’s cost report will include the Worksheet M series for these non-Medicare RHCs.

The proposed SPA would replace the current RHC payment methodology with:

Hospital-based rural health clinic services are paid at the provider’s encounter rate established by Medicare that is in effect for the date of service. When a hospital-based rural health clinic receives the annual rate notification from CMS for a full cost reporting year, the provider must forward a copy of that notice to the state agency. In the event the provider does not submit the rate notification letter from CMS, the lesser of the statewide average or the current rate will be used. There is no retroactive cost settlement. The effective date of this change is July 1, 2019.

Following the comment period, OHCA will submit the SPA (possibly amended) to CMS for approval. This approval is unlikely by July 1, but rate changes once approved could be effective retroactively to July 1. 

The proposed SPA on RHC reimbursement methodologies is available for review, and comments to OHCA may be submitted online. OHA would also appreciate hearing your thoughts on the proposal and will continue to work with OHCA on this change. (Rick Snyder)