Good day everyone and welcome to today's RHC Technical Assistant conference call. Just as a reminder, today's call is being recorded.

And now for opening remarks and introductions, I would like to turn the call over to your host, Mr. Bill Finerfrock.

Thank you, operator. Welcome everybody to this the twelfth Rural Health Clinic Technical Assistants conference call. Our topic today is what are billable, allowable and covered charges in the RHC and our speaker is Linda Dartt.

I'd like to welcome everybody and point out that I am the Executive Director of the National Association of Rural Health Clinics.

Our call today - this series of programs is sponsored by the Office of Rural Health Policy and we want to thank them for their support of this initiative.

Our speaker today, as I said, is Linda Dartt. Linda is a Health Care Consultant who lives in Montville, Maine. She's done a considerable amount of Rural Health consulting; she provides consulting on business issues and assistance with applications for Rural Health Clinics and works with other types of health centers. Linda was previously a consultant at an internationally-recognized firm and has held several positions with Maine health care providers of various types. She moved to Maine in 1980 and completed her BS Degree at the University of Maine and she has worked in the health care field for more than twenty years.

Today's program is scheduled for one hour; the first 45 minutes will consist of Linda's presentation with the remaining time for questions and answers. This call series, as I said, is sponsored by the Health Resources and Service Administration, Federal Office of Rural Policy in conjunction with the National Association of Rural Health Clinics.

The purpose of the call is to provide Rural Heath Clinic staff with technical assistance and RHC specific information. Today's call is the twelfth in a series that we began in 2005. I am pleased to report that we were recently awarded a new five year contract by the office of Rural Health Policy to continue this series for the next five years and we're very pleased to be able to announce that this series will be continuing. The initial contract was for two years, so we've got a new lease on life with this initiative for five more years.

Please join me in welcoming now our speaker, Linda Dartt, who is going to talk to us about billable, allowable and covered charges in the Rural Health Clinic, Linda.

Linda Dartt: Thank you, Bill, and welcome everyone. It's a beautiful sunny day here in Maine in the seventies. I hope it's nice where you are.

We're going to try to get through the basic concepts of the three areas of Medicare and Medicaid coverage that I consider really important conceptually. After today, you should be able to go on and figure out your details and put your specific questions at least into an area so you can frame them with payers or with your government representatives. Anyway, the goals today are for you to understand what is a covered service, what allowable means in an RHC -- what is the difference between those terms and, beyond the questions of covered and allowable, what are billable services. All of these terms mean different things for Medicare and Medicaid and they mean different things for those two payers than they do for everybody else.

I would suggest at this point, if you would like, you could remove the last three pages of your slide copies, that have acronyms used in this presentation, just in case I fall into using the acronyms. I'll try not to, I'll try to say the whole thing out, but just in case, you might put those pages aside so you'll have them for reference.

So starting with what are Medicare covered services because that's kind of the Core of the RHC provider type that was created as a Medicare provider-type and, because RHC is a provider-type, you have to remember that Medicare covered services will vary by the kind of institution that you are. I call the provider types "institutional" provider-types, but that's not an official term. You can be an RHC; you can be within that, an I-RHC (Independent RHC) or a PB-RHC (Provider-based RHC). If your clinic is provider-based, with a CAH (critical access hospital) as your parent provider, covered services may be handled, and some will be billed differently, from the way an I-RHC handles the same type of service. A PB-RHC with a large hospital system as its parent will have to live within the federal per visit cap; a PB-RHC that has a small rural hospital with less than 50 beds as its parent does not have a per-visit payment amount limit (cap). Among the Medicare provider types, there are CHCs (community health centers), FQHCs (federally qualified health center) look-alikes, there are hospitals and CAHs, there are outpatient departments, ambulatory surgical centers and the list goes on and on and all of those entities have different sets of covered services. All of these differences define what your covered services will be and how you will deal with some services such as billing for lab tests.

So you have to know what your provider type is - RHC, but you also need to understand the permutations within RHC when you're applying these concepts.

To further complicate our ability to understand, the basic Medicare covered services also vary by the kind of individual who is providing the service. So if a doctor, an MD or DO, provides the service, it may still not be covered because it's, for example, a mental health service that that particular doctor is not qualified to deliver. You always have to remember that providers (and other staff when applicable) have to be working within the rules that cover their licenses and your state regulations and their entity type as well. These elements form a kind of matrix that affects what's covered in any specific situation.

Coverage can also depend on the diagnosis. I remember when podiatry first became a big deal in Rural Health Clinics -- the only times we could get podiatry services covered were if the patient was diabetic. I think it has loosened up a bit since then but it's still pretty hard to get paid for podiatry services in an RHC, even though the State probably classifies Podiatrists as Medical and/or Osteopathic Doctors. So you've got to know how the patient's diagnosis drives what's covered and who can deliver the services for that diagnosis and then it also matters whether you are delivering the service in your office, at the patient's home, at the hospital or at somebody else's practice. There are a lot of places that you can deliver these services.

One of the things that I like to use as an illustration is the situation of a registered nurse. There are registered nurses all over the country, working in all kinds of health care settings. When they work in Rural Health Clinics, you are always told by government payers that nursing services are covered. Nursing services are covered. That does not mean that you can bill for an RN. It doesn't mean that everything that they do is going to be allowable, which we'll get to later. It doesn't mean the doctor can send the RN over to a Senior Center to do blood pressure checks and have it covered. But that RN can perform Nursing duties in the Rural Health Clinic, up to the limits of State RN licensure, and the cost of having Nurses is included on your cost report. The Nursing costs then go into setting your RHC payment rate, which is really the average cost of delivering a visit to the average patient. So it's included, it's a cost for covered services. However, when an RN who has been working, for example, in a Home Health Agency and who could do things on her own judgment (within a doctor's Plan of Care) out in the patient's home becomes a Nurse in an RHC, he or she cannot perform the same tasks, and the RHC cannot bill Medicare, because Nursing is not a billable service in an RHC

The reason that I use a Home Health Nurse as an example is that you will read in the regulations that an RHC Nurse can deliver services in a patient's home, without direct supervision (if State law allows) in a home health shortage area. An HHSA (Home Health Shortage Area) designation requires approval from HHS (Health and Human Services) and is a very difficult designation to obtain. The regulations do not mean that you can decide to send your Nurse over to a patient's house to do something because you perceive a shortage and it is something he or she can do within the RHC.

Anyway, sometimes you find Home Health Nurses moving from Home Health or hospitals into the RHC environment and the nurses really believe that they can do all the things that they did as a Home Health or Hospital Nurse. Well, they can't, even though it seems entirely logical that they could. Their licensure hasn't changed, but their set of covered services has changed because they are working in a different kind of entity and where they're delivering the services matters for Medicare.

You have to be really careful about what your definitions are, and it's really important when you're talking to your payers, your state regulators, federal representatives and government employees because they are very used to figuring out the fine lines between covered and non-covered, between hospital based RHC and Independent RHC and if you call something by the wrong name or ask a question that is not carefully worded to communicate your meaning - You may get an entirely wrong answer that the person who delivered it thought was exactly right for your situation, but it isn't because you're not applying it the way they meant. Don't be afraid to tell them what you want to do and ask for their guidance. Often, just making a slight change in your plans will satisfy both the RHCs needs and the patient's needs as well as remaining on the right side of the regulations.

So you move from the general concept of covered Medicare services to really the heart of what Rural Health Clinics want to know, which is "What is covered in my Rural Health Clinic?" And again, the answer to that is set by Medicare after our legislators make laws about government-managed health care services. Medicare decided what the RHC Core services would be and they are the ones that the original program was meant to deliver. The kind of family practice, small rural doctor's office that was out there struggling had a set of Core services that were commonly provided. The regulators at Medicare decided that this model would guide what was to be covered as RHC Medicare-covered services. As coverage expanded, optional services were added and those original RHC services became known as "Core" services.

Medicaid came along later and the federal Medicaid regulations required State Medicaid Plans to include those RHC Core services - the ones covered for Medicare beneficiaries - in their Medicaid RHC programs. However, because Medicaid is a state-operated program, funded by both federal and state governments, other services, supplies, sites, etc. may be included in a State Medicaid Plan. Here in Maine, RHC services include those of licensed substance abuse counselors and licensed professional counselors. This is very convenient for RHCs here, but it doesn't mean that a Rural Health Clinic in Vermont can bill for their licensed substance abuse counselors or their licensed professional counselors, because these are licensure types that are controlled by the states. It also does not mean that an RHC in Maine can consider the services of a LSAC or LPC covered for Medicare patients because Medicare doesn't see them as RHC providers.

Here in Maine, at one point in the development of the RHC program, we had licensed pastoral counselors being covered because there was a typo in the regulations. It was supposed to be professional, but pastoral got into the new Manual and Pastoral Counselors came out of the woodwork to bill Medicaid so they changed it. My point is that Medicaid coverage is very different from state to state. There is this basic center Core of services that they are required to cover, but everything else is optional and that's why they're called - Optional Services. I always think of Bill's answer to one of the questions that was asked on the list server one time, "Can I hire some kind of unusual provider in my RHC?" The provider was a type that was not customary in a Physician's office and the answer was, "You can hire anybody you want." He went on to say that the question should be whether the services are covered, whether the cost is allowable on your cost report and whether you can actually bill for it, all of which makes a huge difference.

The Medicare Core services definition - the basic set of RHC services - arose from the historical goals for the program, which were to deliver primary preventive care in rural area that had consistently, and over long periods of time, had trouble recruiting doctors and when they did recruit them, and this is still true in some areas, they would quickly burn out because they were the only doctor for many miles around and people were calling them 24 hours a day. So this was a program that was meant - one of its major goals was - to alleviate this persistent recruiting and retention problem in rural areas.

One of the ways that the government decided to address the problems was to create the RHC Program through Medicare. The RHC Program offered the practice higher payments from Medicare as an incentive for PAs (Physician Assistants) and NPs (Nurse Practitioners) to practice in rural areas. The practice also received higher payments for those PA and NP services than they would have previously. Assuming that PAs and NPs would have lower salaries than Physicians, costs would go down.

There was a complicating factor at the time that had to be addressed so they had to go back to the law, not just the regulations, because PAs and NPs, at that time, were only allowed to provide services to Medicare patients when the Physician was in the building with them. This was kind of difficult to implement, especially in rural areas. If a doctor wanted to have PA or a NP working with them in the practice, the doctor still had to be there, so you had to have enough patients to require two practitioners and in many places, they could hardly support one. So Medicare changed the rules and said, if you pass the tests and become a Rural Health Clinic, then your PAs and NPs can bill Medicare and get paid at the same rate that Medicare would have paid had a Physician delivered the services and the Physician does not have to be in the building while they deliver it.

It took a while for some of the states to catch up with this and they went through a phase at one point, where several states said that the Physician had to be in constant telecommunications contact with the PA or NP. That's kind of gone away too. The RHC regulations require that all of the current non-Physician providers be under supervision and compliant with state law. The federal regulations are silent on how that supervision is to be carried out because that is a power left to the states, and in many, supervision rules today are very loose. Here in Maine and several other states, Nurse Practitioners have independent practice status and can provide services without supervision, but we still have to explain to NPs who work in our Rural Health Clinics that they have to be under the supervision of a Physician when working at an RHC. As an additional comment, Physicians working in an RHC are required to be following the clinical policies as set by the Medical Director, which is very different from the usual arrangement at a group practice. In return, all providers should have input into those policies. The Medical Director and a non-Physician practitioner are required members to be included on the Policy Review/Policy Manual Team.

This ability to bill Medicare and later Medicaid was a great boon at the time that it happened in the late '70s. Physicians at that time sometimes had two or three clinics for which they were providing Medical Direction, with PAs and NPs delivering most of the services. The RHC Act provided an enhanced environment for PAs and NPs and allowed Physicians in some rural areas to improve access for patients because they no longer had to do over-the-shoulder supervision. Physicians were able to do hospital and nursing home rounds, see contagious patients at home, and concentrate on services that actually required a Physician. By the way, in the'70s before the Rural Health Clinic Act was passed, the payment the PAs and NPs received even when they provided services in the same building as the Physicians was less than 100% of what the Physician would have received. I think it was about 80 percent originally and has changed since then. It just didn't make sense for most rural areas to use these new care extenders that were being trained, providers who were able to provide most of the services the Physician could provide but the practice couldn't get paid appropriately by government payers if a NP or PA delivered the service. The Physician Extenders were out there anyway and they were employed in various settings. Sometimes, they were being paid through state or private grant programs. We had visiting nurses in Kentucky and other places mostly in the Southeast; they had Medicare patients, but they couldn't bill Medicare. So somebody else had to pick up the cost, and it was a very different situation from one state to the other.

But with the RHC Act, we now had RHCs in areas that had a Physician only when needed and for the required oversight and services. Maybe a private Physician in a town a hundred miles away from the RHC would agree to come once a week or once every two weeks as minimally required. The RHC had to be in an HHS approved shortage area to do this, which meant that you had to prove your area was medically underserved or that it was short of primary care health professionals. That's still true and shortage area designation is an interesting topic for another time.

There are tricks to being able to successfully apply for a shortage area that are learned over time. Sometimes, it is more an art, requiring not just an understanding of the of the federal requirements, but creativity and determination The service area, the people served or to be served, the existing conditions applicable to the goals you have all have to be put together in a meaningful way that provides the required documentation to result in a successful designation. This process requires knowledge of the service area, demographic research and sometimes assistance from the Primary Care Association or the State Primary Care Office.

The RHC program allows RHCs to receive interim payments, at the average cost to the practice to deliver a visit to a patient of any type. This is the averaging concept that's behind Rural Health Clinics. It's a very hard concept for people who have worked in other parts of healthcare to understand. It's not normal for a Physician's office to get the same payment base for all of their government-paid visits, to get a per visit rate instead of being paid for each service separately. In the rest of the healthcare world, the focus is on documenting elements to receive appropriate reimbursement. Now, the hospitals have changed a little bit since the DRGs (Diagnosis Related Groups) but until the 1990s, it was one code per procedure, with a fee for each and if the claim did not accurately report all of the services delivered, there was no payment for that item.

I'm sorry, Linda, can you alert the listeners as to what slide you're on?

Linda Dartt:

I am currently on slide seven. Sorry, I do tend to ramble.

Bill Finerfrock:

That's all right, so that they can help follow along. Thank you.

Linda Dartt:

OK. I'm currently on slide seven and I'll try to stay with the slides and tell you where I am.

Part of the RHC Act says that if we are going to give you this rate incentive, this wonderful boon in your payments -- the original RHC payment was $25 per visit -- we're going to make you jump over a lot of hurdles, just like the federal government always does. When they give you something, they always want you to assure things in return.

So the predecessor agency to CMS (The Centers for Medicare and Medicaid Services) came up with a set of rules that said you have to do some things to deserve the higher payments and more flexibility in employing PAs and NPs. You have to be handicapped accessible. You have to assure us that you are providing high quality care at a facility that is safe for Medicare patients. You have to have a policy manual that is developed by a team of professionals, including at least one MLP (mid level provider/NP, PA or CNM currently), the Medical Director and someone from outside the RHC. The details are things like having written patient records and signs for exits. You have to have a Physician who's your Medical Director. You have to have a PA or a NP - originally 60% - it's now 50% of the time of the time that you are open to see patients. That was to assure that these new PAs and NPs who were being trained would have work to go to in Rural Health Clinics and it still is a very - it's a high level of care that you are required to provide. Anybody who works in the private practice world knows that there are a lot of rules in those interpretive guidelines and in the survey documents that the surveyors use when they come to visit you that private practices don't pay any attention to at all, but you have to and in return you get a higher average payment from Medicare and Medicaid. I call it "ownership of the patient" in terms of being able to track who your patients are and how you have treated them, etc.

You will also hear the Rural Health Clinic Act sometimes referred to as Public Law 95210. And that's what defines the Core services, I'm on eight here, to be services of primary care Physicians, NPs and PAs. Primary care Physicians for this new program were defined as family Practice, General Internal Medicine, General Practice, Ob/Gyn and Pediatrics. In addition, any services incident to those professional services, which is how things like bandages - incidental services and supplies got included. The asterisk at the bottom of Slide 8 explains incidental. These are things that are not chargeable but they are included in your cost when you build a cost report so they're part of your average cost of delivering a visit. Obviously you don't use bandages or you don't use a dressing at every visit, but you do use them at times, so it's just averaged out.

This program was really simple to begin with. We all had a concept of visits, coding was no where near as advanced as it is today either on the diagnosis or on the procedure level and we really had a mentality that said we deliver a visit (face to face, medical necessity, entry in record), we bill for it. But now, today, you compete with different kinds of entities in your home markets and you have to deliver a lot of those ancillary and specialized services in order to stay in business. They have to be convenient for the patient. The RHC program has evolved over time and it will continue to evolve into the future and, hopefully, we'll have some impact, through NARHC (National Association of RHCs) and other groups, on how it evolves. Some of those extra services or things that are not recognized currently, especially the new special drugs, the cancer drugs and that kind of thing that Bill and I were talking about earlier, that have appeared in the last few years, are very expensive to buy and including them on your cost report is not really the answer to how you get reimbursed because of the cash flow issues. When you spend $300 or $400 for a supply of an injectable drug, you need to recover the expense soon, not after you submit and have settled a cost report, which can be months after the fiscal year end.

The other thing that the Rural Health Clinic law said was required and it still says this, is that the practice, the Rural Health Clinic practice that was converting needed to be "primarily engaged" in the delivery of primary care and this is very vague. I don't know whether primarily engaged means more than 50 percent or more than 75 percent. Typically it has been somewhere in that range when the question has come up but still, you cannot be a specialized practice that does a little preventive care on the side and be an RHC. You won't be certified or you shouldn't be certified because you're not fulfilling the intents of this program. So primary care is the focus. Where it will go in the future, I don't know.

The Rural Health Clinic program requires that the provider, the actual Physician, a PA or nurse practitioner and then a little later, certified nurse mid-wives got added, had to come face-to-face with that Medicare patient. They couldn't be talking to them on the phone, they couldn't be sending messages over a computer, they had to be face-to-face with the Medicare beneficiary and talking about something.

There had to be medically necessary reason for that face-to-face encounter to occur and this is still a big issue that I see in the list serve is just because your Physician had a visit with a patient doesn't mean that it's covered because they had to have a reason - a medical reason - to have that visit. If the patient just came in and chatted or got something they could've gotten somewhere else not from a Physician, then it's not covered. It has to be medically necessary to be a visit and originally it was - again, it was very easy to deal with these situations where you had one patient on one day. I used to tell computer vendors all the time, break the record on patient name and date, that's all I want. I want everything that happens to a patient on one date, on one day, to be collected together in my bill. Even lab work was originally rolled into the visit claim. There was no incentive to provide additional tests for the convenience of the patients because no matter how many labs tests were done, the payment was the visit rate. Today, RHCs often have many non-covered services and deciding whether to carve them out on the cost report or keep them separated in the delivery area can require a complex analysis.

We used to be able to write on the bottom of our claims before they went out when a patient had a second visit. An example that Medicare or Medicaid would always give us was, we had a pregnant woman who came in for a regular pre-natal visit in the morning and then sometime later went home and pounded her thumb with a hammer or something and that visit was OK if that patient came back to the RHC, they could get paid for that visit again because it was a different reason, it was a different diagnosis that brought them in but these were so unusual that we would just literally write by hand on the bottom of the claim what happened, why we gave a second visit to this patient on that same day and they would get paid. Now nobody looks at them and nobody writes on them because they are all electronic or mostly electronic. So, you have an issue with documenting the necessity for the second visit prior to sending it in.

The other thing in the beginning was that what Rural Health Clinics did really didn't matter a whole lot to Medicare. From fifteen to twenty years ago when I would talk to Medicare provider representatives, they would say, look there are twelve of you in the state. We don't really care. You are not processing enough money for us to really care, just send in your visits and we'll pay for them. They didn't care what the charges were, what the code was, if there is a diagnosis code on there, they would just pay them. And obviously, that's become much more technical today. You need to be very careful, very accurate about what you're billing for, what you're providing in your Rural Health Clinic.

Linda, just to give you a time check, we have about twenty minutes before we go to Q and A.

Linda Dartt:

Great and that's just about right. So anyway, I'm just trying to tell you that you have a much harder job today and that's why I think it's really important to understand the basic concept and also, what I said for a very long time and when I managed practices I had a requirement that every new employee read the Rural Health Clinic manual and I meant read it, not just scan through it. Providers did it, billers did it, administrators did it, everybody did it and we discussed it at staff meetings because the RHC program is built on a difficult concept to understand. It's so simple that those of us who work in healthcare don't believe it can be true.

But it's evolving, as I said, and you're hanging a lot of extra things off the edges of these RHCs and we just have to figure out how we're going to address how to handle them in the future. There are now, I don't know, Bill can tell you, more than 3,000 of you out there and you can have a lot to say about where this program goes in the future by working through the national association and by working through your representatives. And that's my little push for being active.

Anyway, through the amendments over the years - I'm on slide ten, through the amendments over the years, the Medicare program added CNMs (certified nurse-midwives) and CPs (clinical psychologists) and LCSWs (licensed clinical social workers). Mental Health is another area where there is a lot of confusion but this is not any social worker that you can hire. This is not the people who come to you and say that I'm a Masters level social worker, that's nice but they need to have the clinical experience and it's very explicitly described how much clinical experience each of these types have to have before they can be a Rural Health Clinic provider, an official provider. But they made the incident two services of course, and it goes on every year, year after year, things get clarified and unclarified and added to and undone and you just need to pay attention to where it's going and you need to read your Rural Health Clinic manual again every once in a while and just check on what's different. For instance, it looks like RHCs should be planning and developing a formal Quality Assurance Plan as it appears that will be part of the new regulations expected in 2007.

So the current definition is Physician services and the Physician has to deliver primary care; he or she has to see patients. Your Medical Director has to deliver some services, serve as the clinical leader for the practice, assist in developing the policy manual, and develop, along with your other providers, clinical policies for the RHC. A Medical Director doesn't sit in a room and write out clinical policies, he or she will work with the other staff members, consult practice guideline sources and come up with appropriate policy for the practice. The Medical Director has to provide whatever supervision of other staff that your state requires and also see some patients.

The federal government says in the Rural Health Clinic program that the MLPs - PAs, NPs and CNMs have to be under the supervision of a Physician in a Rural Health Clinic. I have to address this disparity in the regulations in Maine because we were employing NPs who had met the requirement for and declared Independent Practice. They had worked or were still working elsewhere without any required supervision. They have been out there practicing on their own and then they come to work in a Rural Health Clinic part-time and they think they are still working on their own, but they're not. They're working under the supervision of a Physician and they are required to follow the policies in the RHC Policy Manual for the practice.

So now we have the PAs, NPs, CNMs, CPs and LCSWs and their supplies and services covered.

We also have the issue I talked about before, there is in the Rural Health Clinic regulations a little note that says that Rural Health Clinics can provide visiting nurse services, meaning to homebound patients. Home health services in a home health shortage area and that means an area that has applied for and been granted a fairly recent shortage designation for home health not for any other purpose, not for mental health, not for RHC, not for being a rural health - a federally qualified health center, nothing. It has to be a home health shortage area and I have personally tried to establish a couple of these and our home health agency are very powerful and they do not want this to happen so you just have to remember that maybe you've got a case out there but it's a difficult one to make and you've got to get over the hurdles if you want your nurse out delivering services to homebound patients. I would suggest that you get together with a home health agency and work out a deal with them to get those patients taken care of.

Additionally, for CPs and LCSWs, there are mental health coverage limitations in Medicare and they apply to these providers whether you are in an RHC or not. They don't apply the limits to the charge, they apply them to the rate when it's paid, but it's still limited and you end with about 62 percent, I believe, of your rate from Medicare.

You can provide these Core services pretty much anywhere except in a hospital. If you go in to see a patient in a hospital, you've got a patient admitted whom you see as an inpatient, your visit to that patient is not a Rural Health Clinic visit, it's a part B service. The payer is the Medicare Fiscal Intermediary for PB-RHCs and Part B carrier for I-RHCs. For Medicaid, I don't know how many different ways I can tell people that Medicaid is a state-specific program. There are federal regulations but the regulations that apply to Rural Health Clinics are about those Core services.

The other services that your state decides to put in its Medicaid Program are to a great extent up to the state, as well as how they pay for them and how many visits a patient can have. You can sometimes win battles. I won one with Alabama over a limit of ten RHC visits for pregnant women with Medicaid at one point, but sometimes you can't. Your state is driving what these covered services are and there are forces that are not apparent. The services are optional and if it's not covered by a Medicaid program, it doesn't matter, then it's not going to be an allowable cost and you're not going to be able to bill for it and even if it is covered, they set their own billing policy. Most states use HCFA 1500s rather than the UB92 used by Medicare. Each state has its own, very detailed, state program. Your should make friends with your state's Medicaid employees and find out how they're implementing Rural Health Clinic, and if you don't think it's right, you need to talk to NARHC or to somebody higher up or whatever, but you need to be contacting them and keeping track of what's going on in your Medicaid program because it changes a lot faster than Medicare does.

Then to allowable, allowable has nothing to do with your everyday practice. It has nothing to do with what you're doing on the frontline with your patients. It's a cost reporting term. Essentially what's allowable are any costs that were associated with delivering covered RHC services. What is billable as an RHC encounter is part of the formula for deciding what your average cost per visit is. Your allowable cost, as defined by Medicare, is the numerator of an equation and the number of billable RHC visits is the denominator. When the total allowable costs are divided by the number of total visits, the result is the average cost of each visit delivered. An allowable cost will result from providing covered services, but that cost did not necessarily generate a billable visit.

There are regulations saying that allowable cost has to be reasonable; you can't charge anything you want and expect the patient to pay 20%. Medicare now has reasonable amounts for things through their RBRVS schedule. You can now go on line and see how much Medicare thinks is the appropriate payment for any service they cover. Previously, the fee schedules of comparable practices used to have a lot more impact on the allowable and reasonable test. Now, the situation is reversed, most practices use the Medicare definitions of what is reasonable to include in charges as part of their charge building process, not only because it is easy to update fee schedules when changes in coverage occur, but also assures that they are charging at least as much as Medicare will allow, but not so much more that it becomes unreasonable.

Next, allowable costs must be necessary. You can't just decide to have some service on the side because it would be convenient for you. It has to be necessary to efficiently deliver covered services.

You can include your direct costs - that would be things like pay for the people who work for you, the supplies that you use that you haven't charged for, all those things that you use to provide covered services. You can also allocate a piece of your overhead, your administrative costs, whatever applies to your Rural Health Clinic and again back to the beginning of the RHC Program, almost everything applied then. When we filled out an RHC cost report twenty years ago, it was pretty simple. Every expense we put on the cost report, with very minor and uncommon exceptions, was allowable because we weren't doing anything that wasn't covered. So again we had it pretty easy then; you don't now. Today, as I said earlier, you have more competition and higher patient expectations for what should be offered in a rural practice. When this program began, just being able to support a rural practice was enough incentive to stay within the regulations.

However, the more of these "specialty" and ancillary services you offer on the side, the more difficult you make your cost reporting for yourself. Sometimes, the other benefits of offering a new service can outweigh the additional complications of keeping non-RHC costs separate from your RHC allowable costs. There are wonderful resources out there to use in your planning; for the decision about a new service, I would start with www.Medicare.gov. In fact, it is probably a good idea to explore the Medicare web site and its educational resources. The have manuals, there's an address on slide 14 where you can go to pick up the actual manuals from Medicare, at Health and Human Services, CMS (The Center for Medicare and Medicaid Services). Again, your allowables are going to vary by institutional provider types. If you're a home health agency, you can include allowable costs for physical therapy. If you're Rural Health Clinic, you probably can't unless you want to hire a Physical Therapist to provide visits you can't bill. Although that would probably be justified as allowable in certain cases, your average cost per visit would be exorbitant. I expect that even a PB-RHC without a cap (rural, < 50 beds) would have difficulty justifying including the service. PT is just not a Rural Health Clinic service. Even if a Physician delivered it, it wouldn't be billable or allowable because the Physician is probably not a Physical Therapist and it's not considered part of primary care. A Physical Therapist is not a billable provider or a normal clinical support person in a doctor's office. All of this could change of course, as the population ages more people may need Physical Therapy or other supportive services and they may become common in doctor's offices.

Back to the RHC/FRHC Manual, please read it. That is the basic set of rules for RHCs. Pay attention to it, ask Medicare representatives questions about it. Find somebody who really knows the answers and ask them, not a friend, somebody who works for Medicaid, if you want answers about Medicaid and someone from Medicare or the Medicare web site if that's what you need to know. Go to NARHC because it is an organization devoted to supporting this program and helping it evolve appropriately for changing times.

Again your Medicaid allowable costs are going to follow whatever the covered services are in your state Medicaid Plan, what they allow you to bill for, how many Medicaid-covered patients you have. The billing methodology can be very different from Medicare. You have co-payments in some states, minimum spending amounts in some states, even deductibles for Medicaid patients, but some states don't have any of these things. You just need to know what your state is doing. Get a copy of your state's Rural Health Clinic manual section or separate manual, whatever it is. Get a copy of it and read that too.

Non-allowable costs - I'm on slide 16 - non-allowable costs include the direct costs to deliver non-covered services, so if you're doing something that isn't listed under those covered services, you have to separate out whatever the direct costs are, and there is an example at the bottom of Slide 16 that we'll use to explain how to do that. You have to use those direct costs to pull out (e.g. re-allocate) a percentage of your general costs -- receptionists, billers, bookkeepers, electricity, office cleaners, managers and other clinical and administrative support people. The way you do it, and please, don't go to sleep here because you don't like math. This is important and it's not difficult once you get the hang of it. It's the basic concept behind identifying the cost of allowable and non-allowable services. If you understand this underlying equation, you understand a big piece of cost reporting. You will better understand the concerns of the people who concentrate on finance at your RHC. When they are very worried about what you're doing in your Rural Health Clinic and whether it's an RHC covered service, whether it's going to be billable, whether it's going to be allowable, you will be able to explain better the other factors to be weighed against financial advantage and disadvantage. They need to know these things in order to incorporate expected revenue and cash timing into budgets and reports. If you understand this basic algorithm, you will go a long way to understanding why they need to know these things.

In order to identify your non-allowable costs, your direct non-covered costs (salaries for providers and/or support staff who are exclusively devoted to that service, or the identifiable portion of their total devoted to it; if there are special supplies for the service, the actual cost of supplies used to deliver that kind of service; licensing fees directly attributable to non-covered services and add them up. Then you add all your direct covered costs, everything, the provider salaries, the supplies, everything that is specific to delivering covered RHC services. When you add together these two types of direct costs - for covered and for non-covered services - the result is the total direct cost for the practice. Direct means you can identify them as being related to the service in question rather than a general cost of being in business. For some services - nurses; costs related to the legal requirements of running your practice like general licensing of a clinic - I call these special costs because they can be either direct or non-direct depending on how well you can identify them as being connected to a covered or non-covered service. The other category of expense is indirect costs, things that you cannot specifically relate to a particular service category. Sometimes benefits are direct because the accounting system uses a method that records benefits with each individual's wages and can therefore identify the costs related to various support staff. More commonly, benefits and payroll taxes are not carried in the books as individual entries, but are recorded as total amounts for a practice. Then the benefits and taxes are indirect and are distributed according to the percentage of allowable direct compared to non-allowable direct costs in the total. Once you get those total direct costs, you divide the direct non-covered costs by the total direct costs, the result is the percentage of your total direct costs that represent expenses for delivering non-covered services. You then multiply this percentage by the total indirect costs to identify your indirect costs for non-covered services. If you follow the process with numbers like tens and twenties, you'll see it very quickly and it really helps to understand.

Once you are done with this allocation of overhead, the direct costs, plus the allocated non-direct costs for delivering non-covered services are then excluded from your allowable RHC costs on the cost report. Then, the total allowable RHC cost is divided by the number of RHC visits to calculate your AIRR, your average visit cost. I have an example at the bottom of slide 17 that shows a situation where the RHC decides to provide patient transportation because it's badly needed in the area. I've seen clinics do this. They have patients who don't show up because they don't have transportation or they have other issues, so volunteers provide transportation or the practice buys a car or whatever. This is not a covered cost, providing transportation to Medicare is not covered. It may be covered and even billable for Medicaid; again you're back to your state. But it's not covered by Medicare so you have got to get the cost out of your accounting before the AIRR can be calculated. So you take your direct costs for this non-covered service, expenses such as gas, maintenance, the driver if paid, plus your indirect costs, the percentage of the total indirect costs represented by the direct costs for non-covered services. You add together the direct and the indirect costs and remove them before you report your Rural Health Clinic costs.

We have about five minutes before we go to a Q and A, Linda.

OK, thanks. Finally billable, what's billable? Out of all this confusion arises the day to day question, what can I actually bill for, when can I generate a claim for Medicare, when can I send a bill to Medicaid for something I've done? You have to go back to your covered services, your covered providers, the fact that you're a Rural Health Clinic and that encounter concept, I added "for covered services only" on slide 18 because you always have to remember that. Just because one of your providers did it doesn't mean it's covered. They could get face-to-face with a patient, they can do something, they can write it in a chart but if wasn't necessary for them to do it, then you can't bill it and if it's not defined as a visit-generating service, you can't bill it. That includes all those nurse visits that practices record as 99211 procedure code because they don't require the presence of a provider. Even though the service is covered, it is not billable because a billable RHC provider did not provide it and if a billable provider did deliver it, it still wouldn't be billable because it did not require a provider.

I understand you can bill for 99211 in a fee for service practice, but you cannot bill for it in a Rural Health Clinic. You can keep track of it, I would. I would keep track of how many times my nurses were doing things that I couldn't bill for, just as another piece of information when I do an analysis, but you cannot generate a bill for that in an RHC because a nurse-delivered service is not billable unless it's delivered in one of those home health shortage areas that you probably are not in and probably won't get designated.

In addition, when your CPs and LCSWs deliver services, you can bill your face-to-face encounters for a necessary reason, but your payment will be limited by Medicare because of the Part B limitations on mental health payments and a higher required co-payment for the patient.

On slide 19 you have a definition of an RHC billable visit that comes directly from Medicare. Lab, I mean, all the time we get Nurse Practitioners who are doing a lab procedure themselves, for whatever reason, they are taking a sample or giving an injection. You have no face-to-face encounter here, you are not delivering an RHC visit, you're not doing something that requires a visit with a provider, so you can't bill it as an RHC service. Medicare has a special situation for billing all lab work done in RHCs. In an Independent RHC, the labs are all billed to the Part B carrier; in a Provider-based RHC, the lab work is billed to the parent provider's Medicare Fiscal Intermediary.

You will also have non-billable visits and I just wanted to mention again, because somebody asked the question about billing for prescription refills. This is a perfect example of just because your Physician does it doesn't mean it's a billable encounter. Your Physician can write a new prescription for that patient or another provider can do it, but you can't bill for it because it specifically says in the Rural Health Clinic manual that whether the patient sees a provider or not, refilling a prescription is not a covered service. However, including a medication refill when the Provider provides a visit will increase the coding level of the visit. That's important to remember even though you will still only get paid the same amount no matter what level that visit is for Medicare. You are documenting what you're doing, documenting the level of the visits that you're providing. The fact that you wrote a prescription adds to the documentation and the points that you add up for deciding what level of visit it is. It also matters in terms of providing high quality care and keeping good records. You should know that you're refilling these prescriptions and how often you're doing it and why you're doing it and whether the patient has a medically necessary reason for coming in and should actually see a provider. All of these factors go to tracking your patients and taking care of them in a high quality way and making Medicare happy.

I gave an example here of, theoretically, what you would do if you wanted to exclude the cost of med refills, but you don't have to because it's just part of your overhead, it's part of what you do. Just like some practices call and remind patients about their visits, some practices don't, well, it's part of the overhead doing that. So, the cost will be included on your cost report and become part of your AIRR.

Services delivered by telephone and advice given electronically are currently not billable by RHCs, but there are coverage enlargements that go on over time and I wouldn't be at all surprised if in the next couple of years we can bill for a lot of telephone delivered services because it's cheaper when a face to face visit is not necessary and the payers will recognize that. Your states may recognize telephone delivered services, and you may have grant programs, you may have all kinds of things that might pay you for these kinds of service delivery. There are a lot of things that other payers - other than Medicare or Medicaid will pay for.

All this comes together into building your average cost rate. Your allowable cost total will be divided by your billable visits, which is why it's so important to know what a billable visit is. If you count too many visits, you're going to lower your per visit cost. That's just math. If your total cost is hundred dollars and you've got ten billable visits, you've got an average cost of ten dollars. If you report that you've got twenty visits because you misidentify billable encounters, you're telling Medicare that you've got an average cost of $5, half as much, OK? So you want to make sure that you count these visits appropriately because they will be used to figure out your appropriate payment base rate.

Of course, there are other cost controlling factors that can just get totally out of control and Medicare won't cover for that matter. The critical access hospitals with provider-based Rural Health Clinics currently have no cap. But most of you will have a cap on the amount of your cost so you need to be careful. Count every visit that you do legally but don't count ones that are not legal because you won't do yourself any favors in the future. You'll just have to undo it or the money will be taken back on an audit. It's just not a good thing to do. You need to be careful. You need know who you can bill for and then bill for them and count them.

We need to start wrapping up so we can move on to the Q and A, Linda.

OK. The last slide just really says Medicaid, again, they use your all inclusive reimbursement rate as a guide but they're not tied to, they used to be, but they are not anymore. So again, you need to be active on a state level. States do need to make interim payments and they do have some limits about reasonableness and payments considering other practices and that sort of thing, but you can find all the rules about Medicaid that are federal at Medicare.gov, but the trend is away from federal control over our Medicaid programs. It is definitely drifting in the other direction so you need to make sure that you know what's going on in your state and keep paying attention because it will change..

And finally the last slide, again, make friends with the people who decide the policies and oversea coverage and billing within you state government because you will have access to finding out when things are about to change and what's changing. Go to the hearings. In every state, when things are about to change, hearings are held and they're announced and they're informational meetings. You need to convince your bosses whoever they are that this is worth going to or listening to if you can do it on a call like this one. You've got to get as much information as you can and sort through it and use it for your own purposes and don't ever be afraid to ask a question because there are probably five or six other people in the room who are thinking of the same thing and not being willing to ask and none of you will get the answer to the question if somebody doesn't ask it. You just have to ask.

All of us have learned about these programs by, well maybe not all of us, but I learned a lot by being a pain in the neck at Medicare with my regional office and with my local Medicare Intermediary and asking questions, why is this not covered, why can't I do this, what can I do in this situation?

Finally, remember the African proverb, if you think you are too small to make a difference, try sleeping in a closed room with a mosquito. It's quite a visual reminder of potential power to keep in mind. Thank you.

Thank you, Linda. We appreciate all the information you've shared with us this afternoon. At this point, we'd like to open it up to questions from the audience. The operator will give you the instructions for opening up your line to ask a question. During the question segment of the call, we request that everyone provide their name and location, meaning, you know, city and state before asking their question just so we can get a sense of the regional or locational issues.

Operator, if you would give the instructions for how people can ask questions.

Thank you, sir. The question and answer session will be conducted electronically. To ask a question, please press star one on your telephone keypad at this time. A voice prompt on your phone line will indicate when your line is open. Once again, press star one for your question or comment.

We'll now take our first question.

Go ahead, caller.

Hi, this is Julie Wesiling. I'm in Telluride, Colorado. We're considered a frontier county. We've had a RHC status for some time but have never utilized it. How would I determine what type of RHC we are, whether institutional or individual?

Well, Linda, if you want I can answer or you can answer?

Go ahead.

All Rural Health Clinics when they are initially designated are designated as an Independent RHC. Getting a provider-based designation is a subsequent designation that you can obtain based on meeting various criteria that CMS has laid out for any type of entity that would seek to be provider-based. So I would presume that you're Independent. A provider-based RHC has to be formally tied to a hospital or nursing home or a home health agency and have gone through the specific process for obtaining the designation for that. So, are you part of hospital or nursing home or home health agency?

No. We're Independent.

Then you're clearly going to have to be an Independent RHC.

OK, thank you.

Next caller.

Oh yes, my name is Jennifer Ryan from Estero, Florida. I had a question regarding if we can charge a follow-up office visit subsequent to a procedure code, like for example, an incision and drainage?

Linda, do you want to take a stab or do you want me to?

I'm not sure I entirely understand that, but it sounds like he's done an incision and drainage and then the patient comes back to have it checked?

Yes, we repack and the Physician actually sees the patient and treats them again possibly, not for another procedure, but we repack it and possibly manipulate the incision, et cetera.

Sounds like a visit to me.

Sounds like one to me too.

I was just under the impression it was possibly inclusive is all.

Inclusive in what?

The previous procedure.

This procedure you are doing has a global fee?

Right.

You billed it originally as a Rural Health Clinic encounter?

Yes.

Yes, then your subsequent visit is another Rural Health Clinic encounter.

OK, thank you.

That's important to remember. I think the only time that global fees apply are when you've done something outside of Rural Health Clinic services and you've billed it with a global fee rather than as an RHC visit.

(inaudible)

If the patient comes to the RHC for follow up and it's your patient, but you've already billed a global fee for the original procedure, then you don't have a visit, but in your case, you have two Rural Health Clinic visits going on here.

OK, thank you.

Yes, caller.

Hi, my name is Susan Walsh from Laurinburg, North Carolina. I have a couple of questions actually relating to billable services in the Rural Health Clinic. We're a provider-based owned by a hospital and I understand the Core of it is, is it a medical necessity, but what about and actually the lady that just spoke covered some of this, what about when you have a visit and the Physician does a procedure and then you have a Core visit and he does an EKG? Are those considered non-rural health and billed to part "B" or do we roll those up into the Core visit or how do we bill for those?

Well, a stand-alone procedure would be different than a general procedure. I mean, doing an irrigation or something at the same time as a regular Core visit, you would bundle the charges together - the charges would just be added together. Forget I used the word "bundle". You would add those charges together because it happened at one visit and the contact is a visit. However, EKGs are a little different because they are diagnostic radiology and, I believe, that if you can bill the non-encounter part of the service (the technical component) to Part B in an Independent and to the FI in a provider-based, but not as an RHC visit. The encounter at which a provide decides to do an EKG is an RHC visit and can be billed as such. Is that correct, Bill?

The professional component is a visit. The technical component gets billed as a Part B service.

Right, and then the reading?

The reading is part of the visit.

So do you include the reading fee into your Core visit fee? Do you add those two together?

You're going back to what Linda said earlier. You bill for an encounter and that encounter is all inclusive. Everything that occurs during that particular visit that is a professional service all gets added together for billing an RHC visit and you get paid based on your all inclusive rate. Now you want to identify the individual services that were provided because that will dictate the beneficiary's co-pay during that particular encounter but all the professional services get collapsed and billed out under your all inclusive rate and that's what you're going to get paid on. The EKG, as Linda said, is separately billable because it is a technical service much like lab, a covered diagnostic service that is not considered an RHC service and therefore is billable under Part B. So that the only thing that gets taken out, you know, any lab services that may have been billed during the visit, any technical component of diagnostic services, those are billed out separately. All the professional services are collapsed and billed under your single encounter.

And now just let me clarify this one thing, when you say collapse, let's say my 99213 visit is $80 and my removal of toenail is $20. Is my total charge to Medicare Part A a hundred?

Yes.

Yes, you're going to get paid based on your all inclusive rate, whatever that is. Your charge is a hundred and the beneficiary co-pay is going to be based on the hundred.

Right. And that's part of the reason that's it's important that the charge is right even though the payment may not be different from Medicare.

I understand that, OK, and that, does that - what about injections? Same thing?

Yes.

Yes, injections, again, you're identifying the charge for that but it's all collapsed into your all inclusive rate because what you paid for the injection, the personnel who delivered it are all captured on your cost report and reflected in your all inclusive rate.

OK, great. Thank you.

I mean, I think that's one of the areas where a lot of people get into trouble with the allergy shots and that sort of thing that really do take more time and cost a lot. You really have to think about whether it's a good thing to do in your RHC because it will be included in a visit or it will just be built into your rate if there is not face-to-face encounter.

Here's a question that was emailed in ahead of time. Can a Rural Health Clinic bill Medicare for registered dietician service for medical nutrition therapy used in procedure code 97802. According to the information that I have this service is listed as a covered service but not a billable RHC visit. Why is that?

It's just like having a nurse in your Rural Health Clinic. I once worked in a hospital that owned some Rural Health Clinics and they had a federally certified diabetic education and management program with 2 certified providers (for their purposes). It took a lot of effort for me to get everybody on the hospital side to understand that if the Diabetic Nurse or the Dietician came to one of our Rural Health Clinics and saw a patient, I could not bill for it.

Because the registered dietician is not a PA, NP, CNM or Physician, the Dietitian's salary and other expenses related to the service would be allowable costs, but the time that the patient spends with them is not separately billable. So, back to an earlier example, where we had the mathematical equation that includes your costs in the numerator and your visits in the denominator -- in this situation, you have costs in the numerator, but no visit to count for the denominator.

Right. That's a good way to put it because that clearly shows that what you're doing is increasing the cost of a visit and if you have a cap, you want to stay under it so you don't want a lot of costs occurring with out visits to count.

That's the problem we've been trying to get across to Congress -- that operating in a capped environment and delivering more services than was common 30 years ago, what that does is increase your average cost per visit, which invariably puts you over the cap if you're not there already.

Right, but this is part of that circular thing that's kind of, as the program evolves and people add services, we want them to be a part of a Rural Health Clinic service, but it takes some time for government and then the payers to catch up.

Next question from a caller. This is going - we'll take one or two more, Operator.

Very well, Caller your line is open.

Go ahead caller, someone got beeped.

This is Babs from Baton Rouge. And I got two quick questions. On page 10 you're talking about the Physician having to provide the services one day every two weeks, does he actually have to provide the primary care services or can he just be reviewing he charts at that time?

There's actually a requirement to provide services. It's not well defined but it does say the Physician Medical Director must "provide services". It says the Medical Director must be present once in every two week period and that has been, correct me if I'm wrong, Bill, but I think that most of the interpretation of that has been at least a day every other week.

Right, one day every two weeks is generally the way that's it's viewed. There has …

The rest of it is, it says, deliver services to patients. I think just consulting with your Nurse Practitioner or whoever's on site and looking at charts and signing off is not fulfilling the rest of that requirement. I think the expectation and what I've seen in practice mostly, is that you will have some patients during the week that the providers want a second opinion about, or someone with more experience with the condition than they have themselves, that sort of thing. So they want the Physician to see the patient and once in every two week period is about as infrequent as I would like to see that occur.

Right, OK. Thank you.

Next question is going to have to be our last question. We will probably be doing sessions similar to this, I think there always been a lot of confusion on issues of billable and allowable so this isn't the end. And I would also encourage you, many of you, I know, participate in the listserve. These are good questions for the listserve. We'll take our last question from the callers.

I think it's very difficult to cram all the necessary information into forty-five minutes.

Hi, my name is Kelley Overbeam from Panora, Iowa and my question is about billing for refills not covered. Does that mean if a Medicare patient comes in for what our Physician would call a med check, or whatever, goes over just to see how their high cholesterol medicine's working or whatever and then writes a refill at that time and charges a one-two-visit, a 99212, does that mean we can't charge for that?

He's charging 99211?

No, the 99212, level two.

A level two E&M visit?

Yes.

Yes, I would say that sounds billable because you're doing a history and documenting it and you're not just refilling.

OK.

Yes, that's the subjective aspect of this is, has the Physician provided a medically necessary service that requires the skills and education of a Physician to that patient during that face-to-face encounter. If it was simply to refill the prescription, as Linda said, where there's no Physician judgment, no interpretation, no evaluation occurring then it's not - that's not right for the level of the visit but what you indicated is that the Physician is checking different things, evaluating blood levels, doing whatever they may need to do to insure that whatever prescription, the patient is appropriately responding to, is not having an adverse reaction, is not having some type - something occurring which requires their medical judgment, now you've moved into a visit that Medicare describes as a level two, so you now have a Rural Health Clinic visit.

OK, thank you.

Right.

That's going to have to do it for today's call. I want to thank all the participants; in particular, I want to thank the Office of Rural Health Policy for sponsoring this series. A transcript of today's call will be available in a few weeks and it will be posted on the ORHP web site and we'll send out the link once that is available. If you know others whom you think would benefit from knowing about this series, we encourage you to share the information and have folks sign up. We currently have about 11 hundred people who signed up to receive the information on this series. We will have a call next month and will be announcing the date and time of that call in the very near future. If you do have suggestions for topics, please email those to info@NARHC.org.

Again, I want to thank all our participants for being here today and look forward to having you participate in the future. Thank you.

Thank you, Bill.

And that concludes today's program. We thank you for your participation and have a wonderful day.

END