|
It was amended by the Omnibus Budget
Reconciliation Act (OBRA) of 1989, adding
"FQHC" to the Medicaid benefit
package as a mandatory Medicaid service.
It was waived under a 1915(b) waiver program.
These provisions are unchanged by the
Balanced Budget Act (BBA).
Before the Balanced Budget Act the OBRA
1989 amended section 1902(a)(13)(E) of
the services at 100 percent of their reasonable
costs. The Balanced Budget Act continues
the current reasonable cost reimbursement
payments, however, the payments begin
decreasing after 1999.
States may, at their option, continue
to provide reasonable cost-based reimbursement
if required to do so.
Cost-based payments between 1998 and 2003
will be as follows:
95 percent of costs in FY 2000
90 percent of costs in FY 2001
70 percent of costs in FY 2003
All Federally Qualified Health Centers
(FQHCs) and Rural Health Clinics (RHCs)
are eligible for these payments, regardless
of Medicaid. The FQHCs participating in
fee-for-service arrangements (unrestricted
or as primary care management care arrangements
(either as primary care contractors to
Health Maintenance Organization or health
insuring organizations) are eligible for
these payments.
Under the BBA provision, a State may
elect to offer Primary Care Case Management
(PCCM) services under its State plan.
Those that have both PCCM and Managed
Care Organization (MCO) programs
1997, that will impact the manner in
which both FQHCs and RHCs are reimbursed
and their contractual arrangements under
Medicaid managed care arrangements. Pre-BBA:
The OBRA 1990 amended section 1903(m)(2)(A)
of the Social Security Act to require
that States operating Medicaid managed
care programs were required to provide
FQHCs with cost-based reimbursement if
the FQHCs elected or requested such reimbursement.
The OBRA 1990 also required that rates
paid to an MCO that subcontracted with
an FQHC be adjusted to reflect the FQHC
cost-based payment rates. The MCOs were
then required to pass these funds on to
the FQHCs in the form of enhanced rates
which equalled cost-based reimbursement.
The FQHCs were required to "elect"
cost-based reimbursement in one of two
ways:
by having a clause in their contracts
with MCOs stating that reimbursement will
be on a reasonable cost basis, or; by
notifying the State of their "election"
to receive costbased reimbursement.
BBA: The requirement that States provide
additional funds to MCOs to pay FQHCs
their cost was superceded by the BBA as
of October 1, 1997. With the enactment
of BBA, the election process is no longer
required (see fourth bullet below). The
new legislation (BBA section 4712(b))
replaces the old statutory language, and
provides for the following:
States are required to pay directly to
the FQHC/RHC in the form of a "supplemental
payment", on a quarterly basis, the
difference between a FQHC's or RHC's reasonable
costs and the payment the FQHC/RHC received
from the 1903(m) managed care organization
(see definition below). The State's "supplemental
payment" covers the difference between
what the FQHC/RHC is receiving from the
MCO and the FQHC's/RHC's reasonable costs.
The FQHCs/RHCs must have a contract with
an MCO providing services under Medicaid
managed care for this supplemental payment
to apply. The language in the BBA specifically
requires States to make these supplemental
payments. This responsibility cannot be
delegated to an MCO.
The definition of a section 1903(m) organization
was amended by the BBA. A 1903(m) organization
is now defined as health maintenance organization,
an eligible organization with a Medicare
risk contract, a provider sponsored organization,
accessibility and solvency standards outlined
in statute.
All FQHCs/RHCs are eligible for these
payments, regardless either the State
or their MCO partners. This new Federal
law supersedes any current contracts that
FQHCs/RHCs may eligible to receive cost-based
reimbursement regardless of previous arrangements.
FQHC/RHC can only be made by the State
by assessing the rate negotiated between
the FQHC/RHC and the MCO as to whether
or costs. The State should determine what
the reasonable cost levels are for each
FQHC/RHC expected to participate in the
rates paid to the FQHC/RHC and the predetermined
cost-based rates, a supplemental payment
may or may not be triggered. interim rates
subject to reconciliation.
Contracting between FQHCs/RHCs and Medicaid
MCOs provide for payment by the MCO to
the FQHC/RHC "that is not less than
the level and services if the services
were furnished by a provider" that
is not an FQHC/RHC. This provision stipulates
that an MCO what it pays other providers
for comparable services.
A State has the flexibility to develop
its own methodology not less than that
paid to other providers for similar services.
to FQHCs/RHCs other than the requirement
that the MCO not pay FQHC/RHC less than
that paid to other providers for managed
care plans to pay FQHCs/RHC full cost-based
reimbursement. In addition, States cannot
require MCOs to
pay FQHCs/RHCs any special rates (full
cost or a percentage of costs). Rather
negotiation of cost-based rates and full
payment of those rates must be carried
out directly between the State and the
FQHC/RHC.
States will not be allowed to develop
any alternative reimbursement arrangements
(between a State, MCO, and FQHCs/RHCs,
or any combination thereof) that are inconsistent
with the provisions of the BBA. The Health
Care Financing Administration (HCFA) will
not approve any FQHC/RHC reimbursement
arrangements from any State that do not
meet the BBA FQHC/RHC reimbursement and
contracting requirements.
The FQHCs no longer have to "elect"
their right to costbased reimbursement,
as was required under the pre-BBA policy
which applied when FQHCs contracted with
MCOs. Instead, all FQHCs automatically
have the right to costbased reimbursement,
without having to notify the State or
MCO partner of their "election".
There is no requirement to have language
in the MCO/FQHC contract regarding cost-based
reimbursement. The State is responsible
for the supplemental payments regardless
of the language in the MCO/FQHC contract.
Steps for FQHCs/RHCs and PCAs to take:
It is critical that FQHCs/RHCs and Primary
Care Associations (PCAs) work with their
States as the State develops its new Medicaid
FQHC/RHC reimbursement methodology to
comply with the BBA.
The FQHCs/RHCs and PCAs need to negotiate
with their State officials a cost-based
reimbursement rate that will used as the
basis for determining State FQHC supplemental
payments.
The FQHCs/RHCs and PCAs should work with
their States to ensure that the State/MCO
contract includes a provision that ensures
that the MCO are reimbursing FQHCs at
a rate which is not less than the level
and amount of payment which the MCO would
make for comparable services from another
provider.
The MCO/FQHC/RHC contracts may need to
be modified in order to conform to this
provision. The FQHCs/RHCs may wish to
contact the MCOs with which they contract
regarding this new provision.
States with existing section 1115 Waivers
For States with existing 1115 demonstrations
that have waived the FQHC/RHC reimbursement
requirements, the BBA's FQHC/RHC payment
provisions do not apply. However, most
1115 demonstrations that have waived the
FQHC/RHC reimbursement requirements have
a special term and condition (STC) of
the waiver that stipulates that FQHCs/RHCs
be paid on a cost-related basis, or with
adjustments for risk factors. The FQHC/RHC
STC that has been utilized with most recent
1115 waivers contains the following language:
"The MCO will pay the FQHC(s)/RHC(s)
on either a capitated (risk) basis (with
appropriate adjustments for risk factors)
or on a cost-related basis." The HCFA
will require all States with existing
section 1115 demonstrations with a STC
pertaining to FQHC/RHC reimbursement to
submit information describing their reimbursement
methodology for FQHCs/RHCs, and how these
methodologies are being implemented. Specifically,
HCFA will request information regarding
the factors included in the State's "cost-related"
calculation, or what "risk adjustors"
the States considered in the development
of their FQHC/RHC reimbursement methodologies.
This information will then be reviewed
by a Departmental team with in the U.S.
Department of Health and Human Services
(the Department) to assess if States are
complying with the STC. If, based on the
submittal of this information, a State
is found to be out of compliance with
the standard term and condition, the State
would then be required to develop a corrective
action plan. If, after developing a corrective
action plan, the State fails to come into
compliance, the standard term and condition
would be terminated, and the State would
be required to comply with the requirements
of BBA as noted above. Steps for FQHCs/RHCs
and PCAs to take:
The FQHCs and PCAs in 1115 waiver States
that have a FQHC/RHC STC should begin
to gather data on Medicaid reimbursement
and rate adequacy as they relate to the
implementation of the STC for cost-related
or riskadjusted payment methodology over
the time period of the waiver. The FQHC/RHC
should be prepared to provide this information
to the State, HCFA, and Health Resources
and Services Administration (HRSA) when
requested for review of State compliance
with the FQHC/RHC STC.
For States with approved, but not implemented
section 1115 demonstrations, the BBA provision
regarding FQHCs and RHCs applies to the
unimplemented areas of the State. For
example, in States that are phasing-in
implementation on a county-by-county (or
region-byregion) basis, unimplemented
counties are subject to the BBA provisons
while implemented counties would follow
the approved FQHC/RHC STC of the demonstration
(if any).
The BBA contained provisions that allow
for State renewal of 1115 waivers for
up to 3 years. States may apply for this
extension 12-18 months prior to the waiver
expiration date. As specified in the BBA,
Congress intended that section 1115 demonstrations
be renewed under the same terms and conditions
currently in place in each demonstration
program. Therefore, to the extent States
can assure that they are complying with
the terms and conditions (as noted above),
the Department will renew these applications
with the current terms and conditions.
As described under the section "States
with existing 1115 demonstrations",
FQHCs and PCAs in 1115 waiver States that
have a FQHC/RHC STC should begin to gather
data on Medicaid reimbursement and rate
adequacy as they relate to the implementation
of the STC for cost-related or risk-adjusted
payment methodology over the time period
of the waiver. The FQHC/RHC should be
prepared when requested for review of
State compliance with the FQHC/RHC STC.
States applying for section 1115 demonstrations
in the future provisions are permissible.
However, given that Congress recently
spoke to the appropriate levels of requests
will be carefully evaluated by the Department.
Provide substantial justification as
to why the Department should waive the
BBA FQHC/RHC provisions. Each State
As part of the review process of the
section 1115 developing an in-depth set
of standard questions that States will
need to answer regarding a request to
waive discuss a number of issues, including:
the status of FQHCs/RHCs and other safety
net providers in the State; other safety
net providers; and the impact of the proposed
changes on the uninsured. In addition
to series of questions specific to the
State's application.
Furthermore, the Department will develop
guidance on to States who are considering
applying for section 1115 demonstrations
in the future.
As most currently do, FQHCs/RHCs and
PCAs should be that States are developing
provisions for adequate reimbursement
to FQHCs under their waivers. Once of
States applying for waivers of FQHC reimbursement
will be available. The FQHCs and PCAs
will then be able information on the waiver's
potential impact on the safety net and
how this information can be disseminated
to relevant parties (the State, HCFA Central
and Regional Offices, other safety net
providers).
The FQHC provisions under BBA were effective
October 1, 1997. These provisions affect
contracts that existed prior to October
1, 1997 by applying to services furnished
on or after October 1, 1997. All contracts
(between the State and the MCO and between
the MCO and the FQHC) should be appropriately
amended to reflect all the relevant changes
in FQHC law and policy as noted above.
|
