Updated: Federally Qualified Health Centers and Rural Health Clinics Reimbursement Methodology Changes Approved

Standard Plans will begin to reimburse the APM rate for claims with a date of service on or after Aug. 1, 2024.

This bulletin applies to NC Medicaid Direct and Standard plans.

NOTE: This bulletin replaces the April 16, 2024 bulletin Federally Qualified Health Centers and Rural Health Clinics Reimbursement Methodology Changes Approved to update that Standard Plans will begin to reimburse the APM rate for claims with a date of service (DOS) on or after Aug. 1, 2024, instead of July 1, 2024.

This bulletin pertains to NC Medicaid Direct and Standard Plan Federally Qualified Health Center (FQHC)/Rural Health Clinics (RHC) wrap payments.  Tailored Plan FQHC/RHC reimbursement methodology changes will be addressed in a separate bulletin issued at a later time.

The Centers for Medicare & Medicaid Services (CMS) has approved State Plan Amendments (SPAs) SPA 23-0021 for Rural Health Clinics and SPA 23-0022 for Federally Qualified Health Centers to amend Attachment 4.19-B, Section 2 to revise the reimbursement methodology for FQHC and RHC providers.

The effective date for each SPA is July 1, 2023. The target dates for operationalizing the SPA changes for NC Medicaid Direct (fee-for-service) and Standard Plans are identified below.

  • NC Medicaid Direct (Fee-for-Service) operationalizing date is May 1, 2024.
  • Standard Plans operationalizing date is Aug. 1, 2024.

For the period between the effective date of the SPA and the operationalizing dates, the Department will perform a reconciliation and make a lump sum payment to each FQHC and RHC provider equal to the difference between what each FQHC/RHC provider would have received under the APM rate for the same services and actual payments made during the July 1, 2023, through operationalizing date period.

The new methodology for FQHC and RHC provider types encompasses several key changes:

  1. The methodology establishes a new provider-specific Prospective Payment System - Alternate Payment Methodology (PPS-APM) rate for Core Service, Well Child and Dental visits based on 113% of Medicaid Allowable Costs from the provider’s 2021 Medicaid Cost Reports.
  2. The resulting PPS-APM rate is inflated to the current period by the greater of the FQHC Market Basket or the Consumer Price Index (CPI) for medical care.
  3. The PPS APM rate will be rebased triennially based on Medicaid Cost Reports.

The new methodology will be operationalized in the following manner:

NC Medicaid Direct (Fee-for-Service)

  • New - Providers will be reimbursed their provider specific PPS-APM Rate for Core Services (T1015) and Well Child Visit (99381EP-99385EP; 99391EP-99395EP) covered services.
  • Providers will continue to bill and be reimbursed for the following ancillary covered services based on the applicable codes on the FQHC/RHC NC Medicaid Fee Schedules:
    • Diagnostic Laboratory Services
    • Physician Hospital Services
    • Pharmacy Services
    • Incentive Payments
  • New - Providers will continue to bill all other ancillary services rendered for covered FQHC/RHC services; however, these will be set to reimburse zero based on the NC Medicaid Fee Schedule. The reimbursement for these services has been factored into the grossed-up PPS-APM rate paid on Core Service, Well Child and Dental encounters. It is important for the triennial rebase of Medicaid Allowable Cost for providers to continue to bill these covered ancillary services so that utilization of these ancillary services is captured.
  • Providers that furnish dental services will continue to bill and be reimbursed on an interim basis based on the NC Medicaid Fee Schedule.
  • New - The Department will perform a quarterly reconciliation for dental services between the amount reimbursable to the provider for dental visits at the PPS-APM Rate and the amount received by the provider based on interim fee-for-service dental claims payment. If the reimbursement amount under the PPS APM Rate methodology is greater, the Department will execute a “wrap” payment for this difference to the provider.

NC Medicaid Managed Care Standard Plan

  • New - Providers will be reimbursed statewide base rates by Standard Plans for Core Services (T1015) and Well Child Visit (99381EP-99385EP; 99391EP-99395EP) covered services.  The base rates are as follows:
    • T1015 for FQHCs                        $117.32
    • T1015 for RHCs                             $83.30
    • Well Child for FQHC/RHC         $80.33
  • Providers will continue to bill and be reimbursed by the Standard Plans for the following ancillary covered services based on the applicable codes on the FQHC/RHC Medicaid Fee Schedules:
    • Diagnostic Laboratory Services
    • Physician Hospital Services
    • Pharmacy Services
    • Incentive Payments
  • New - FQHC or RHC physician-professional services performed in a hospital inpatient or outpatient setting billed under the FQHC or RHC taxonomy and the hospital place of service are separately reimbursable by the Standard Plans under the Physician Services Fee Schedule.
  • New - FQHC or RHC physician-professional services that are not performed in a hospital inpatient or outpatient setting and billed under the FQHC or RHC taxonomy and non-hospital place of service are not separately reimbursable and will be reimbursed under the FQHC/RHC PPS rate.
  • New - Providers will continue to bill all other ancillary services rendered for covered FQHC/RHC services; however, these ancillary services will be set to reimburse zero based on the NC Medicaid Fee Schedule. The reimbursement for these services has been factored into the grossed-up PPS-APM rate paid on Core Service, Well Child and Dental encounters. It is important for the triennial rebase of Medicaid Allowable Cost for providers to continue to bill these covered ancillary services to the Standard Plans.
  • New - Simultaneously with the paid T1015 and Well Child base rates, Standard Plans are expected to reimburse FQHC/RHC providers a “wrap” payment equal to the difference between the provider specific PPS-APM rate and the base rate.

Both NC Medicaid Direct and NC Medicaid Managed Care

  • New – For NC Medicaid Direct (Fee-for-Service): Since the intended date to operationalize the above changes is May 1, 2024, FQHC/RHC providers will continue to be reimbursed under existing methodology through April 30, 2024. For the period between July 1, 2023, through April 30, 2024, the Department will calculate and make a lump sum payment to each FQHC / RHC provider equal to the difference between what each provider would have received under the PPS-APM rate methodology for the same services and the actual fee-for-service payments received.
  • New – For NC Medicaid Managed Care: Since the intended date for Standard Plans to operationalize the above changes is Aug. 1, 2024, FQHC/RHC providers will continue to be reimbursed under existing methodology through July 31, 2024. For the period between July 1, 2023, through July 31, 2024, the Department will calculate and make a lump sum payment to each FQHC / RHC provider equal to the difference between what each provider would have received under the PPS-APM rate methodology for the same services and the actual fee-for-service payments received.
  • Note: NC Medicaid Standard Plans will not be required to reprocess claims.

Fee Schedules

The Department will be updating the FQHC/RHC Fee Schedules. The fee schedules’ effective date of July 1, 2023, reflects the State’s approval of the new Alternative Payment Methodology (APM) rates. However, Standard Plans will begin to reimburse the APM rate for claims with a DOS on or after Aug. 1, 2024, and a date of payment on or after Aug. 1, 2024, using the following fee schedules:

  • New - NC Medicaid Managed Care Fee Schedules:
    • MC RHC PPS-APM - Well Child Fee Schedule
    • MC FQHC PPS-APM – Well Child Fee Schedule
    • MC FQHC Physician Services
    • MC RHC Physician Services
  • The following fee schedules will be archived for Standard Plans as of July 31, 2024:
    • Federally Qualified Health Centers
    • Rural Health Center
    • Federally Qualified Health Centers Core Service
    • Rural Health Center Core Service
  • Note: Providers that have not delivered the data required for rate determinations will be assigned rates based on the SPA rate methodology guidelines.

Billing and Encounter Data Guidance Updates

The new FQHC/RHC wrap payment methodology resulted in updates to the Encounter Data Submission Guide section 3.2.4, and the Health Plan Billing Guidance sections 3.8.1 and 3.8.2. Providers should work with the Standard Plan(s) with which the provider has contracted to gather more detail regarding these updates until official versions are released.

Contact

Medicaid.ProviderReimbursement@dhhs.nc.gov 

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