CHAIR

Ronnie Musgrove
Jackson, MS

MEMBERS
Kathleen Belanger, PhD
Nacogdoches, TX

William Benson
Silver Spring, MD

Ty Borders, PhD
Lexington, KY

Kathleen Dalton, PhD

Chapel Hill, NC

Carolyn Emanuel-McClain, MPH

Clearwater, SC

Kelley Evans
Red Lodge, MT

Barbara Fabre
White Earth, MN

Constance Greer
St. Paul, MN

Octavio Martinez, Jr., MD

Austin, TX
NATIONAL ADVISORY COMMITTEE ON RURAL
HEALTH AND HUMAN SERVICES
Carolyn Montoya, PhD, CPNP
Albuquerque, NM

Maria Sallie Poepsel, MSN, PhD, CRNA

Columbia, MO

Chester Robinson, DPA

Jackson, MS

Mary Kate Rolf, MBA, FACHE

MODERNIZING RURAL HEALTH CLINIC

Syracuse, NY

John Sheehan, MBA, CPA

Chesterfield, MO PROVISIONS

Mary Sheridan, RN, MBA

Boise, ID

Benjamin Taylor, PhD, DFAAPA, PA-C

Martinez, GA

Donald Warne, MD POLICY BRIEF AND RECOMMENDATIONS

Fargo, ND

Peggy Wheeler, MPH

Sacramento, CA

EXECUTIVE SECRETARY

DECEMBER 2017

Paul Moore, DPh

Rockville, MD
 MODERNIZING RURAL HEALTH CLINIC PROVISIONS

EDITORIAL NOTE

In September 2017, the National Advisory Committee on Rural Health and Human Services
(hereinafter referred to as “the Committee”) met in Boise, Idaho. During this meeting, the
Committee focused on ways to modernize the Rural Health Clinic (RHC) provisions. The statutory
authorization for RHCs is 30 years old and members expressed concerns the current regulatory
and statutory foundation of RHCs is not well aligned to meet today’s health care needs and those
in the future. While in Boise, the Committee heard from federal and state health and human service
officials and RHC providers.

ACKNOWLEDGEMENTS

The Committee would like to give thanks and acknowledgement to those whose participation
helped make this brief possible. The Committee would like to thank North Canyon Medical Center,
North Canyon Family Physicians, Associates in Family Practice, Shoshone Family Medical
Center, and Power County Hospital District for sharing their experiences as rural health clinics.
The Committee would also like to acknowledge the research and policy background provided by
Bill Finerfrock (National Association of Rural Health Clinics), Teresa Cumpton (Centers for
Medicare & Medicaid Services), John Gale (Maine Rural Health Research Center), and Wakina
Scott (Federal Office of Rural Health Policy.)

Special thanks to Mary Sheridan, who served as the chair of the rural health clinic subcommittee.
Other members of this subcommittee include Kathleen Dalton, Carolyn Emanuel-McClain, Kelley
Evans, Carolyn Montoya, Chester Robinson, and Mary Kate Rolf.

Finally, we would like to acknowledge the work of Victoria Maloch on behalf of the committee.

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NATIONAL ADVISORY COMMITTEE ON RURAL HEALTH AND HUMAN SERVICES

RECOMMENDATIONS

Payment Options
1. The Committee recommends the Secretary work with Congress to obtain authority to
reexamine and pursue a change in the statute a to adjust the payment cap for RHCs.
In doing so, the Committee urges the creation of a formula for payments that ties
payment cap increases to the current average cost per visit for RHCs currently under
the cap.

Program Support
2. The Committee recommends the Secretary work with Congress to provide grants to
State Offices of Rural Health to support a state program that would provide technical
assistance on quality reporting and other services to support the transition of RHCs
to value-based care.

Services
3. The Committee recommends the Secretary work with Congress to obtain authority to
allow RHCs to be distant site providers for telehealth services under Medicare.
4. The Committee recommends the Secretary work with Congress to obtain authority to
allow all RHC (non-physician) providers to order hospice and home health services
and also allow RHC providers to be attending clinicians for hospice services.

Workforce
5. The Committee recommends the Secretary work with Congress to obtain authority to
allow masters trained behavioral health providers (e.g., licensed professional
counselors, mental health counselors, or marital and family therapists) to be RHC
practitioners for purposes of Medicare reimbursement if they are licensed to provide
those services in their state.

Lab Requirements
6. The Committee recommends the Secretary publish a Request for Information to RHC
providers on current RHC laboratory needs. Based on this information, the
Committee recommends the Secretary use the authority granted in Public Law 95­
210 to review and modernize lab requirements to reduce regulatory burden and allow
flexibility in requirements to reflect patient population services.

a
Current payment cap structure established in the Omnibus Budget Reconciliation Act of 1987 by amending SSA Sec.
1833(f)(2).

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INTRODUCTION

More than 4,100 Rural Health Clinics (RHC) in 44 states b make up a significant portion of the
rural health care infrastructure. The patient populations served by RHCs include a high proportion
of rural elderly and poor. 1 RHCs allow for greater access to primary health care that can focus on
wellness, health promotion, and disease prevention, as well as improve rural residents’ ability to
manage the illnesses and chronic conditions that cause such high human and economic costs. In
addition, RHCs are increasingly looked upon as a key part of the rural safety net based, in part, on
the requirement they be located in rural areas designated as underserved. 2 Similar to rural hospitals,
RHCs have a payer mix heavily dependent on Medicare. 3 Medicaid beneficiaries also make up a
substantial portion of RHC patients. 4 While RHCs are not required to provide services on a sliding
fee scale, many do. A recent study showed 86 percent of independent RHCs offer free care, sliding
fee scales, or both. 5

With increased focus on value-based care in the Medicare and Medicaid programs, there are
growing concerns about the viability of RHCs and the extent to which RHCs are improving access
to care. While there has been a significant growth in the number of RHCs over the past three
decades, RHCs continue to face challenges related to services provided, their payment structure,
and workforce. These providers play an important role in ensuring access to care in rural
communities, particularly for Medicare and Medicaid beneficiaries, but as health care evolves the
Committee believes these clinics are increasingly being limited by an outdated regulatory
structure.

LEGISLATIVE HISTORY

The Rural Health Clinic Services Act (RHC Act) of 1977 (Public Law 95-210) was enacted to
address an inadequate supply of physicians serving Medicare and Medicaid beneficiaries in rural
areas and to increase the utilization of non-physician practitioners such as nurse practitioners
(NP) and physician assistants (PA). At the time, NPs and PAs were not eligible for
reimbursement. Given access problems across rural America, the creation of the RHC was seen
as a way to address access and workforce challenges by taking advantage of non-physician
primary care providers. Over the next two decades, the RHC setting, and subsequently Federally
Qualified Health Centers (FQHC), provided a test bed for demonstrating the impact of expanding
the primary care workforce. With the model a proven success, the Balanced Budget Act (BBA)
of 1997 6 authorized direct reimbursement for NPs and expanded flexibility for PAs.

Meanwhile, during the 1990s, because of several legislative actions that changed the RHC payment
methodology and added additional practitioners, there was a significant growth in the number of
RHCs across the country. In fact, the number of RHCs grew by over 650 percent from 1990 (314
RHCs) through October 1995 (2,350 RHCs). 7 This growth prompted some concern from
policymakers, which led to payment caps for some provider-based RHCs c and RHCs losing their

b
As of May 2017, six states -- Alaska, Connecticut, Delaware, Maryland, New Jersey, and Rhode Island – had no RHCs in
operation. A full list of certified RHCs can be access on the CMS RHC Webpage at: https://www.cms.gov/Outreach-and-
Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/rhclistbyprovidername.pdf.
c
The cap was put in place for provider-based RHCs of hospitals with 50 or more beds. Independent RHCs already
had a payment cap through the original legislation.

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status as a certified RHC. 8 HHS has attempted to address some of these concerns in rulemaking
but the provisions were never finalized and there has been no Congressional or stakeholder
pressure to revisit the issue. 9

STRUCTURE AND REQUIREMENTS

Organizational Structure
RHCs are either independent (i.e., freestanding) or provider-based, meaning owned and operated
as an integral and subordinate part of a hospital, skilled nursing facility, or home health agency
(HHA) participating in the Medicare program. While skilled nursing facilities and HHAs can own
an RHC, few do. Hospitals can own and operate provider-based as well as independent RHCs. Per
regulation, provider-based RHCs are not considered departments and must be financially and
operationally integrated units of the parent entity. Today, approximately 57 percent of RHCs are
provider-based and 43 percent are independent. This is a shift in the types of RHCs as there were
previously more independent RHCs in comparison to provider-based RHCs. 10 RHCs can be
gender- or age-specific (e.g., pediatric-only, adult-only, or Ob-Gyn) as long as the majority of care
provided is primary care. Finally, RHCs can be public, nonprofit, or for-profit.

Payment Options
Payment for outpatient primary care services furnished to Medicare patients by an RHC is made
by means of a bundled or average per-visit payment for a defined package of RHC core services.
This bundled payment is referred to as an all-inclusive rate (AIR). The AIR covers the cost of
professional (including physician, nurse practitioner, physician’s assistant, midwife, and nursing
care) and other services and supplies provided during a clinic visit; visiting nurse services to the
homebound; and/or clinical psychologist and social worker services as well as including services
and supplies incident to those services. When Congress passed the RHC Act in the mid-1970s, it
authorized cost-based payments for RHC services up to a statutorily prescribed cap. However, this
cap was originally authorized only for independent RHCs. In the BBA of 1997, Congress extended
the cap to provider-based RHCs in rural hospitals with 50 or more beds, in part, due to the growth
in the number of RHCs. Provider-based RHCs that are part of a hospital with fewer than 50 beds,
including critical access hospitals (CAH), are not subject to a payment cap. RHCs subject to the
payment cap are paid at the lower of the adjusted costs per visit or the payment cap.

Between 1977 and 1988, Congress twice raised the RHC cap via legislative initiatives. Beginning
in 1988, Congress authorized annual RHC cap adjustments based on the Medicare Economic Index
(MEI). The first rate using this method was set at $46 per visit. 11 As a result of medical inflation,
the RHC cap for 2017 is $82.30 per visit. In general, the Medicare Administrative Contractor
(MAC) calculates the AIR for an RHC by dividing total allowable costs by the total number of
visits for all patients. In addition to the payment cap, productivity standards help determine the
average cost per patient for Medicare reimbursement in RHCs. The current productivity standards
require 4,200 visits per full-time equivalent physician and 2,100 visits per full-time equivalent
non- physician practitioner (NP, PA, or certified nurse midwife (CNM)). However, the MAC has
the discretion to make an exception to the productivity standards.

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Services
In addition to general primary care, RHC practitioners provide other services such as influenza,
pneumococcal, hepatitis B vaccinations, an initial preventive physical exam, an annual wellness
visit, Medicare-covered preventive services recommended by the U.S. Preventive Services Task
Force (USPSTF), and transitional care management services. 12 These services can all be provided
as part of the RHC’s all-inclusive rate. As of January 1, 2016, RHCs can also bill for chronic care
management services. Such service is paid at the Physician Fee Schedule national average non-
facility payment rate, which is about $42 in 2017. RHCs can also receive payment for facilitating
telehealth services (i.e., linking a patient to distant specialist) as the originating site, but must carve
them out of the cost report and provide them as a separate billable service under Medicare Part B
Physician Fee Schedule apart from any RHC services. This is done to prevent commingling and
the arrangements are subject to a review during CMS surveys. RHCs are not allowed, however, to
provide telehealth services (i.e., serve as the distant site).

Workforce
In addition to meeting location requirements for certification, an RHC must also employ at least
one NP or PA. An NP, PA, and/or CNM must work at least 50 percent of the scheduled RHC
operating hours. Further, an RHC must be “under the medical direction of a physician” who is a
doctor of medicine (MD) or doctor of osteopathic medicine (DO), but the physician’s level of
direct patient care may be minimal. 13 RHC practitioners can include a physician, PA, NP, CNM,
doctoral-level clinical psychologist (CP), and a master-level clinical social worker (CSW). These
are the only practitioners that can provide services at an RHC in order for the RHC to receive the
cost-based all-inclusive payment rate.

Lab Requirements
RHCs are required to directly furnish routine diagnostic and laboratory services and have
arrangements with one or more hospitals to furnish medically necessary services that are not
available at the RHC. Laboratory tests required to be furnished on-site are: 14
• Chemical examination of urine by stick or tablet method or both
• Hemoglobin or hematocrit
• Blood sugar
• Examination of stool specimens for occult blood
• Pregnancy tests
• Primary culturing for transmittal to a certified laboratory

Location Requirements
RHCs receive certification from CMS for participation in the Medicare and Medicaid programs. 15
To be certified as an RHC, a clinic must be located in a Census-designated, non-urbanized area
and in a health professional shortage area (HPSAs) (geographic or population HPSA), medically
underserved area (MUA), d or governor-designated MUA. Further, the shortage area or MUA must
have been designated or renewed within the previous four years.

d
This does not include the medically underserved population (MUP) designation.

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RHCs AND FQHCs

RHCs, FQHCs, and private primary care providers all play a role in ensuring access to primary
care services in rural America. FQHCs are federal grantees and enjoy the enhanced support of a
larger grant program. RHCs are a designation conferred by the Centers for Medicare and Medicaid
Services, which stipulates reimbursement for the various types of RHCs. Over 4,100 RHCs and
10,000 FQHC sites deliver primary care to communities across the country. 16 RHCs and FQHCs
both play essential roles in the health care safety net, securing access to health care in rural areas
across the country. While FQHCs serve both urban and rural areas, RHCs are only allowed in rural
areas. Additionally, there are significant differences in the overall structure, location requirements,
services provided, and payments for RHCs and FQHCs.

In general, RHCs have fewer requirements regarding specific services they must offer, but have
additional requirements related to location and staffing designed to ensure access to care in rural
areas. On the other hand, FQHC service requirements ensure access to a more comprehensive
range of health care and support services in FQHCs, but are arguably more difficult (i.e., resource-
intensive) to implement and maintain. However, FQHC status typically comes with Health
Resources and Services Administration (HRSA) grant funding and typically higher Medicare and
Medicaid payment rates.

For Medicare reimbursement, both RHCs and FQHCs do not receive payment through the
physician fee schedule like other comparable providers of outpatient, Medicare Part B services.
Historically, this has allowed RHCs and FQHCs to provide services that were not typically eligible
for Part B reimbursement –services such as dental health care and transportation at FQHCs.
Instead, CMS pays an AIR to RHCs and a prospective payment for FQHCs – bundled rates that
provide consistency, stability, and simplicity for RHC and FQHC payment.

The Affordable Care Act of 2010 revised FQHC payment structure, putting in place a prospective
payment system (PPS) which began in 2014. RHC payment remains based on the original payment
system from 1988, although certain RHCs (i.e., independent RHCs and provider-based RHCs
owned by hospitals of 50 or more beds) are also subject to a cap. Today, this can equate to an $81
difference in payment between a visit to an FQHC and certain RHCs subject to a payment cap. For
example, in 2017 the RHC cap is $82.30, whereas FQHC PPS for the same basic service is
$163.49. The gap is less for provider-based RHCs at hospitals with less than 50 beds. On average,
adjusted cost per visit for RHCs subject to the cap is greater than their payment for a visit (see
Table 1). Unlike the RHC AIR, the FQHCs are paid 80 percent of the lesser of their charges based
on the FQHC payment codes or the FQHC PPS rate. The coinsurance for Medicare patients of
RHCs is 20 percent of total charges, except for certain preventive services (in other words,
Medicare pays the RHC 80 percent of the AIR for each RHC visit). There is no Part B deductible
in FQHCs for FQHC-covered services.

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Table 1: Mean Adjusted Cost per Visit for RHCs

RHC Characteristics (n) n Mean ACPV 2017 Cap Shortfall

Independent RHCs 1,235 $112.12 $82.30 $29.82
Small 324 $126.40 $82.30 $44.10
Medium 408 $106.83 $82.30 $24.53
Size
Large 402 $106.01 $82.30 $23.71
Extra-Large 101 $112.03 $82.30 $29.73
Private/for profit 883 $103.96 $82.30 $21.66
Ownership
Non-profit/publicly owned 296 $130.70 $82.30 $48.40
Provider-Based RHCs 1,904 $176.73 $82.30 $94.93
Small 650 $186.64 $82.30 $104.34
Medium 571 $170.02 $82.30 $87.72
Size
Large 571 $171.02 $82.30 $88.72
Extra-Large 112 $182.52 $82.30 $100.22
Subject to Yes 421 $163.38 $82.30 $81.08
Cap? No 1,254 $181.00 N/A N/A
Attached to Yes 1,026 $182.06 N/A N/A
CAH? No 778 $168.54 Varies Varies

Source: Analysis of cost reports completed by the Maine Rural Health Research Center for the National
Advisory Committee on Rural Health and Human Services (October 2017)

The Maine Rural Health Research Center analyzed Medicare Cost Report data to determine the
adjusted cost per visit for RHCs. The data analyzed was from cost reports for the period ending
12/31/2014. To help distinguish between RHCs, they were grouped by clinic size: small (1 – 4,342
visits), medium (4,343 – 9,324 visits), large (9,325 – 28,040 visits), and extra-large (28,041 or
more visits). Independent RHCs were grouped by ownership (private/for profit or non­
profit/publicly owned). Provider-based RHCs were grouped by association with a CAH and
whether they were subject to the reimbursement cap (clinics with 50 or more beds are capped).

While there is increased interest in maintaining access to primary care through RHCs at both the
federal and state level, special consideration and focus is needed for some of the ongoing and most
recent challenges RHCs face, which could ultimately be harmful to the sustainability of RHCs and
their ability to provide access for Medicare and Medicaid patients. Addressing such challenges
through legislation, regulations, or sub-regulatory policies could not only help to modernize RHC
provisions, but could also lead to increased access to health care and improved health care
outcomes for rural beneficiaries.

RECOMMENDATIONS

The following recommendations to modernize Rural Health Clinic provisions are listed in order
of precedence as determined by the Committee.

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Payment Options
The Committee is concerned about the viability of RHCs under the current payment cap. The
limitation for independent, freestanding RHCs and provider-based RHCs of hospitals with 50 or
more beds does not cover the actual cost of providing care. RHC staff presenting to the Committee
noted that the reimbursement cap as updated by the MEI has not kept pace with the cost of
providing services. RHCs subject to the payment cap reported adjusted costs per visit that exceeded
the reimbursement cap by $25.00 to $81.00 depending on size and hospital ownership.

Further, the underlying RHC rate is based on an outdated methodology for determining the value
of services. FQHCs, which previously were paid on a similar methodology, have since been
authorized by Congress to use a prospective payment system that appears to better align services
and costs.

Recommendation 1: The Committee recommends the Secretary work with

Congress to obtain authority to reexamine and pursue a change in the statute e to
adjust the payment cap for RHCs. In doing so, the Committee urges the creation of
a formula for payments that ties payment cap increases to the current average cost
per visit for RHCs currently under the cap.

Program Support
A risk for both FQHCs and RHCs is that, in the long-term, they will not be able to participate
effectively in a redesigned health care payment and delivery system focused on quality and value
as a determinant of payment. More specifically, RHCs and FQHCs may be unprepared to take on
the risk required under new payment models or may not be seen as attractive partners to larger
groups like accountable care organizations (ACOs). FQHCs may be further along on responding
to these sort of emerging challenges because of support they receive as a result of being HRSA
grantees under Section 330 of the Public Health Service Act. HRSA has taken important steps to
emphasize quality reporting CHCs and using that data to improve patient outcomes.

There is no comparable support available to RHCs. The Committee notes that small rural hospitals
were facing similar challenges in the early 2000s until revisions to the Rural Hospital Flexibility
Grant Program and the Small Rural Hospital Improvement program focused program resources on
quality reporting and performance improvement. Those HRSA grants work through State Offices
of Rural Health to provide support and technical assistance. RHCs lack the administrative capacity
to respond to emerging changes in the health care environment.

Recommendation 2: The Committee recommends the Secretary work with Congress to

provide grants to State Offices of Rural Health to support a state program that would
provide technical assistance on quality reporting and other services to support the transition
of RHCs to value-based care.

Services
While RHCs can currently serve as originating sites (where the patients are located) for telehealth,
they are not allowed to serve as the distant site (providing professional services) for telehealth

e
Current payment cap structure established in the Omnibus Budget Reconciliation Act of 1987 by amending SSA Sec.
1833(f)(2).

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services under Medicare. Additionally, RHC non-physician providers are not allowed to order
hospice and home health services or be attending clinicians for hospice services.

Recommendation 3: The Committee recommends the Secretary work with Congress to

obtain authority to allow RHCs to be distant site providers for telehealth services under
Medicare.

Recommendation 4: The Committee recommends the Secretary work with Congress to

obtain authority to allow all RHC (non-physician) providers to order hospice and home
health services and also allow RHC providers to be attending clinicians for hospice services
in hospice shortage service areas.

Workforce
While RHC provisions were designed, in part, to increase access to health care services provided
by PAs and NPs, such provisions could be reconsidered to allow for greater flexibility in the types
of providers that could provide and bill Medicare for RHC services at the AIR (versus incident to
a currently approved RHC practitioner). For example, providers such as masters trained behavioral
health providers (such as licensed professional counselors, mental health counselors, or marital
and family therapists) operating within the scope of their state licenses and reimbursable by state
Medicaid programs could help increase access to mental health services for Medicare beneficiaries
through RHCs.

Recommendation 5: The Committee recommends the Secretary work with Congress to

obtain authority to allow masters trained behavioral health providers (e.g., licensed
professional counselors, mental health counselors, or marital and family therapists) to be
RHC practitioners for purposes of Medicare reimbursement if they are licensed to provide
those services in their state.

Lab Requirements
The Rural Health Clinic Services Act of 1977 describes the RHC lab requirement in the following
way: “directly provides routine diagnostic services, including clinical laboratory services, as
prescribed in regulations by the Secretary, and has prompt access to additional diagnostic services
from facilities meeting requirements under this title.” 17 These requirements can lead to
inefficiencies in certain situations, such as pregnancy testing requirements for pediatric facilities
or the hematocrit requirement.

Recommendation 6: The Committee recommends the Secretary publish a Request for

Information to RHC providers on current RHC laboratory needs. Based on this
information, the Committee recommends the Secretary use the authority granted in Public
Law 95-210 to review and modernize lab requirements to reduce regulatory burden and
allow flexibility in requirements to reflect patient population services.

OTHER CONSIDERATIONS

While hearing from federal and state health and human service officials and participating in
discussions with various RHC providers during our site visit, many different challenges were

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brought to the Committee’s attention. While the Committee has chosen to address and provide
recommendations to the Secretary on only for those challenges listed above, the Committee would
like to spotlight other challenges mentioned that merit further consideration from HHS in order to
fully modernize the RHC provisions. In addition, the Committee believes these issues would help
reduce burden on providers in alignment with the Department’s ongoing efforts to reduce
regulatory burden across the Medicare program.

Commingling Reform
Commingling is “the sharing of RHC or FQHC space, staff (employed or contracted), supplies,
equipment, and/or other resources with an onsite Medicare Part B or Medicaid fee-for-service
practice operated by the same RHC or FQHC physician(s) and/or non-physician(s)
practitioners.” 18 Prohibition of commingling ensures the prevention of duplicate Medicaid or
Medicare reimbursement and prevents RHCs from selectively choosing higher or lower
reimbursement rates. However, the necessary steps that must be taken to help distinguish costs can
create inefficiencies, unnecessary burden, and disruption of timely access to care for RHC patients.
The added burden of reviewing commingling in the survey process creates additional challenges
for providers and is often inconsistent from one region to the other. RHC stakeholders
recommended certain changes to the Medicare cost report as a step towards alleviating the burden
of commingling requirements. As HHS continues to focus on reviewing regulatory burden
challenges, the Committee believes there are opportunities to streamline and improve ensuring
program compliance for RHCs related to commingling issues.

Survey/Certification Delays
RHC stakeholders also told the Committee that delays in surveys and certification create particular
challenges for new RHCs. One hospital stakeholder told the Committee about delays in opening a
provider-based RHC in Idaho and that created delays in billing, affecting the financial viability of
the hospital. The Committee recognizes that the ability to do timely surveys and to certify clinics
may be more of a budget issue for HHS than a policy issue.

Location Requirements
The Committee received feedback from RHC stakeholders that HHS could provide additional
clarity on re-location requirements. Several provided examples of situations in which RHCs have
moved to new facilities in the same town, but found themselves at risk of either no longer being in
a non-urbanized area or no longer in a HPSA. A few of the RHCs present said they had chosen not
to move to larger or more modern locations nearby that would have better served their patients due
to concerns of running into similar challenges. In alignment with HHS’s focus on reducing
regulatory burden for providers, there may be an opportunity for the Department to explore options
for providing more regulatory flexibility in handling these situations so services are not disrupted
and providers are not locked into a physical location that might not be best for patient care.

Employment Requirements
RHC providers expressed concern regarding the statutory requirement related to the amount of
time certain providers must be present and the interpretation of the term “employ” within the
requirements. f RHC stakeholders indicated finding a PA or NP to work at least 50 percent of the

f
Employment requirements are currently framed as: “RHCs must employ a NP or PA (RHCs may contract with NPs, PAs, CNMs,
CPs, and CSWs when at least one NP or PA is employed by the RHC)”

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time has been a challenge and in some cases, an MD specializing in family medicine would be
interested in opening a clinic, but cannot find a PA or NP to also work in the clinic. Another related
challenge is the requirement to employ a PA or NP full- or part-time as evidenced by a W-2 form.
This has also been a burden for RHCs that may have difficulty recruiting a full-time or part-time
PA or NP as a W-2 employee, but may be able to fulfill this requirement by contracting instead
with a PA or NP. In 2014, HHS did add some flexibility to this requirement by allowing RHCs to
“contract with non-physician practitioners (PAs, NPs, CNM, CPs or CSWs) as long as at least one
NP or PA is employed by the RHC.” 19 While this added flexibility was helpful, the Committee
suggests the flexibility be expanded to reflect a variety of appropriate employment arrangements,
as direct hiring may be restrictive for RHCs. This added flexibility was a step in the right direction,
but should be expanded to reflect that there are a variety of appropriate employment arrangements
and direct staffing may be restrictive for RHCs. Another expansion could include allowing other
appropriately licensed health care providers (as determined by each state), in addition to
physicians, PAs, NPs, CNMs, CPs, and CSWs, to be eligible to fulfill the employment
requirements.

CONCLUSION

This brief summarizes the Committee’s learning from the September 2017 meeting about the
challenges RRHCs face in today’s health care environment. Throughout the meeting, the
Committee considered both how RHC providers can adapt to better participate in a value-based
delivery system and how RHC policies and regulations can change to better accommodate rural
patients and communities. This memo outlined initial steps that department could take to
modernize RHC provisions through the regulatory process, as well as suggestions that would
require legislative action.

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APPENDICES

A. Rural Health Clinic Map

B. Site Visit Profiles

o North Canyon Medical Center/North Canyon Family Physicians

o Associates in Family Practice

o Shoshone Family Medical Center

o Power County Hospital District

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Appendix A: Rural Health Clinic Map

RHIhub. (2016, December). Rural Health Clinics. Retrieved October 03, 2017, from https://www.ruralhealthinfo.org/resources/987

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Appendix B: Site Visit Profiles

While our site visit was physically held at North Canyon Medical Center in Gooding, ID, several
other RHC providers were invited to participate in the discussion. RHCs from Gooding, Power,
and Lincoln Counties were represented. Costs and financial burdens were common issues for the
RHCs. Many of these concerns surrounded the cost of staffing, cost of electronic medical record
systems, and the time between up-front costs and receiving payment.

North Canyon Medical Center/North Canyon Family Physicians

North Canyon Medical Center is located in Gooding, Idaho, in the south central area of the state
and is a CAH. North Canyon Family Physicians, previously Gooding Family Physicians, merged
with North Canyon Medical Center in 2014. This move transformed the practice from an
independent RHC to a provider-based RHC. They noted that this status is the only way they could
survive financially and is what led to them merging with North Canyon Medical Center. A doctor
associated with this RHC expressed his desire for access to the broader services of the medical
center and said the transition to being a provider-based RHC, in this situation, made referrals easier
and it was better for patient care.

Associates in Family Practice

Associates in Family Practice has three independent RHCs in Gooding County. They have eight
providers total that rotate through the three offices. Of these eight providers, four are doctors. They
estimate they see approximately 15-20 patients per day, per provider across their locations.
Recently, they had to take out a short-term loan in order to cover the costs of vaccines until the
cost report is settled. This was a struggle for them because it takes almost a year from the time
they pay for things and when they file their cost report to get paid/reimbursed. They expressed a
desire for a higher payment cap to allow them to help cover more of the actual costs that are
incurred, but also to allow them to address more issues in one visit with patients. Handling more
than one issue per session is particularly important for rural areas where long distances may inhibit
regular health care and follow-up visits.

Shoshone Family Medical Center

Shoshone Family Medical Center, an independent RHC, is the only health care facility in Lincoln
County. Lincoln County has a population of approximately 6,000 and Shoshone Family Medical
Center serves a patient population of approximately 4,000. Providers currently see 50-60 patients
a day in a facility built in 1910 with five exam rooms. Shoshone Family Medical Center
representatives expressed feeling limited by their inability to expand and move locations for fear
of losing their RHC status. While staff members reported feeling empowered by the doctor to take
on extra costs and go the extra mile for patients, they did feel limited by the payment cap and the
inability to collect payment for any extra time spent with patients. Overall, they expressed concern
that three of the greatest limiting factors for RHCs are time, people, and capital.

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 MODERNIZING RURAL HEALTH CLINIC PROVISIONS

Power County Hospital District

The Power County Hospital District provides residents of the county access to a CAH and a
provider-based RHC. Certification was a significant barrier for the hospital district. Wait times for
certification can often be as long as 90 – 120 days, so they often take on the cost until approved as
an RHC. With tight budgets and the previously mentioned financial concerns faced by many
RHCs, these costs are not easy for them to carry. Technical costs for telehealth was also mentioned
as a challenge, but having the required separate space for these services presented a bigger problem
for them. They did express the opinion that providing these services was valuable, and said
consultative telehealth services with local doctors can also be very helpful.

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NATIONAL ADVISORY COMMITTEE ON RURAL HEALTH AND HUMAN SERVICES

REFERENCES

1
Maine Rural Health Research Center. (2010). Are Rural Health Clinics Part Of The Rural Safety Net? Available at:

http://muskie.usm.maine.edu/Publications/rural/pb/RHC-Safety-Net.pdf.

2
Ibid.

3
Radford A, Freeman V, Kirk D, Howard A, Holmes GM. ((May, 2014). Safety Net Clinics Serving the Elderly in Rural

Areas: Rural Health Clinic Patients Compared to Federally Qualified Health Center Patients. Available at:

http://www.shepscenter.unc.edu/download/11715/.

4
Domino M, Tyree S, Rutledge R, Randolph R, Pink G, Holmes M. (May 2016) Characteristics of Medicaid

Beneficiaries Who Use Rural Health Clinics. Available at: http://www.shepscenter.unc.edu/download/12915/.

5
Maine Rural Health Research Center. (2010). Are Rural Health Clinics Part Of The Rural Safety Net? Retrieved from

http://muskie.usm.maine.edu/Publications/rural/pb/RHC-Safety-Net.pdf
6
OIG Report. (June 2001). Medicare Coverage of Non-Physician Practitioner Services. Available at:

https://oig.hhs.gov/oei/reports/oei-02-00-00290.pdf.

7
Gale JA and Coburn AF. (January 2003). The Characteristics and Roles of Rural Health Clinics in the United States:

A Chartbook. Available at: http://muskie.usm.maine.edu/Publications/rural/RHChartbook03.pdf.

8
OIG. (September 2014). CMS Has Yet To Enforce a Statutory Provision Related To Rural Health Clinics. Available at

https://oig.hhs.gov/oei/reports/oei-05-13-00290.pdf.

9
See CMS Notice (CMS–9026–N). Available at: https://www.cms.gov/Regulations-and-Guidance/Regulations-and-
Policies/QuarterlyProviderUpdates/downloads/CMS9026n.PDF.

10
Gale JA and Coburn AF. (January 2003). The Characteristics and Roles of Rural Health Clinics in the United States:

A Chartbook. Available at: http://muskie.usm.maine.edu/Publications/rural/RHChartbook03.pdf.

11
RAND Report. (2002). Trends in Special Medicare Payments and Service Utilization for Rural Areas in the 1990s.

Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-

Reports/Reports/downloads/farley2_2002_3.pdf.

12
For more information on RHC services see Chapter 13 of the CMS Medicare Benefit Policy Manual. Available at

https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c13.pdf.

13
See 42 CFR 491.7-8. Available online at https://www.ecfr.gov/cgi-bin/text-
idx?c=ecfr&rgn=div6&view=text&node=42:5.0.1.1.8.1&idno=42.

14
CMS. (January 2017). Rural Health Clinic Fact Sheet. Accessed at: https://www.cms.gov/Outreach-and-
Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/RuralHlthClinfctsht.pdf

15
For more information on RHC certification requirements see Chapter 2 of the CMS State Operations Manual.

Available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/som107c02.pdf.

16
HRSA. (August 2017). Health Center Program Fact Sheet. Accessed on August 23, 2017 at:

https://bphc.hrsa.gov/about/healthcenterfactsheet.pdf.

17
See Public Law 95-210: https://www.gpo.gov/fdsys/pkg/STATUTE-91/pdf/STATUTE-91-Pg1485.pdf

18
CMS. (December 2016). Medicare Benefit Policy Manual Chapter 13 - Rural Health Clinic (RHC) and Federally

Qualified Health Center (FQHC) Services. Available at https://www.cms.gov/Regulations-and-

Guidance/Guidance/Manuals/downloads/bp102c13.pdf.

19
CMS. (December 2016). Medicare Benefit Policy Manual Chapter 13 - Rural Health Clinic (RHC) and Federally
Qualified Health Center (FQHC) Services. Available at https://www.cms.gov/Regulations-and-
Guidance/Guidance/Manuals/downloads/bp102c13.pdf.

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