Moderator: (Bill Finerfrock)
May 24, 2006
2:00 p.m. CT

Operator:

Good day everyone and welcome to this RHC the basics part two conference call. As a reminder, today's call is being recorded.

At this time, I would like to turn the conference over to your host, Mr. Bill Finerfrock. Please go ahead, sir.

Bill Finerfrock:

Thank you, Operator. My name is Bill Finerfrock. I'm both the moderator and the speaker for today's call. I'm the Executive Director of the National Association of Rural Health Clinics. This is part two of our RHC's the basics.

Our previous call about two weeks ago looked at location issues and those slides are available and a transcript of that call will be available shortly. Today's call, as you heard, is being recorded and a transcript of today's call will be available probably in a couple of weeks.

I want to welcome everybody to today's call and I also want to say that these calls are being sponsored by the Federal Office of Rural Health Policy and we thank them for the generous support of this series.

Today's program is scheduled for one hour. The first 45 minutes will consist of my presentation and the remaining 15 minutes will be dedicated to questions and answers. As I said, this is sponsored by the (ARCA) Office of Rural Health Policy in conjunction with the National Association of Rural Health Clinics. The purpose of the call is to provide RHC staff with technical assistance and RHC-specific information.

Today's is the tenth call in a series which began in 2005. There is, as you know, no charge to participate. Individuals can sign up to receive announcements regarding the call dates, topics, and speaker presentations and that can be found at www.ruralhealth-one word - R-U-R-A-L-H-E-A-L-T-H.H-R-S-A.G-O-V/RHC.

During the question-and-answer segment of the call, we'll request that callers provide us with their name and location they're calling from prior to their question. And in the future, you can also e-mail questions or topic suggestions to info - I-N-FO- .narhc. Put teleconference question in the subject line. We will make every effort to answer those questions and post it on the NRHC Web site, which is www.narhc.org.

Today's call is going to focus on operational issues - basic operational issues for your rural health clinic. As I did on the last call, I want to encourage you to go to the Web site - the NARHC Web site and download the starting a rural health clinic, a how-to manual document that will go through many of the issues that we discussed last week - or two weeks ago and we'll be discussing today. You can get that through our homepage, which is www.narhc.org. And in the slides, I provided you with the specific link to that document. It's in a PDF format and can be downloaded and printed at your site.

Some of the things we're going to cover today include the RHC staffing requirements, the role of the policy and procedures' manual, the role of the cost report, and the definition of an RHC visit. I do want to, you know, point out that this is the basics. Because we only have 45 minutes, we're not going into a lot of great detail on these subjects. We have on some of these in the past and we will in the future but we will not be going into tremendous detail because of the time limitation.
Some of the other issues we'll be talking about is the definition of what is an RHC visit, what about ancillary services, visits to the hospital, and visits to a nursing home.

In terms of the RHC staffing, the Rural Health Clinic program is predicated on a team approach to healthcare delivery and there is a link again on our Web site to the rural health clinic rules and interpretative guidelines that you can go and download. And I - and I would encourage you to a minimum download the interpretative guidelines but to also establish the link to the RHC rules that are available there. Those are the official documents. The rules are the official requirements for the RHC program. Anything other than that is either interpretative or whatever. The RHC rules, what is in the code of federal regulations are what you must follow for purposes of the RHC program.

All of the surveyors when they come to inspect the facility will determine whether the Rural Health Clinic is sufficiently staffed by the RHC rules in the code of federal regulations to provide services essential to its operation. Because clinics are located in areas that have been designated has having a shortage of health personnel, they frequently aren't able to employ what would be considered adequate or sufficient healthcare staffs that you might find in many other settings, and as a result of that, we find that there is often turnover within the RHC community with regards to the physicians, the PAs, the nurse practitioners, the nurse midwives, et cetera.

Every Rural Health Clinic must have a physician who serves as the medical director and it must have a physician assistant, or a nurse practitioner, or a certified nurse midwife on site and available to provide care at least 50 percent of the time that the clinic is open and I'll go into that in a little bit more detail.

Should the loss of a physician, a physician assistant, certified nurse, midwife, or nurse practitioner member of the RHC staff reduce the clinic's staff below the minimum required, the clinic will be afforded a reasonable time to comply with your staffing requirement. Now, typically, what that means is that you will have initially 90 days to replace your PA, your nurse practitioner, or your certified nurse midwife and you would not be considered to be out of compliance with the PA, NP, nurse midwife staffing requirement.

And then after the initial 90 days, if you - as you're approaching your 90-day requirement, if you determine that you will not have a new PA, nurse practitioner, or nurse midwife on staff by the end of that 90 days, you can apply for a waiver of the staffing requirement and that waiver is good for one year. So if you lose your PA, your nurse practitioner, or your nurse midwife, you actually have a year to three months to replace that person if you do the request and the paperwork before you would be considered to be out of compliance with that requirement.

Now that waiver is only available to clinics that are already in the program. You cannot seek a waiver concurrent with your initial application to become a Rural Health Clinic. You must be able to demonstrate at the time of initial certification that you meet the RHC staffing requirement. Should you get a waiver of your staffing requirement, you must be able to demonstrate during the period of the waiver that you are actively seeking to recruit and employ a PA, a nurse practitioner, or a nurse midwife during that time period.

If at the end of you - if you get to the end of your waiver and you still have not found an individual to fill that requirement and the surveyors ask you for the documentation that you have been actively recruiting for the previous year and you are unable to provide that, then you are subject to decertification as a Rural Health Clinic back to the end of the initial 90-day period. It is a subjective process in terms of demonstrating that you were actively recruiting but you should be able to show that you took out ads in publications where PAs, nurse practitioners, or nurse midwifes would likely be looking; you contacted educational programs for the disciplines in question so that you could solicit or try and get new graduates.

I did have a clinic at one time who contacted me that was being told that their decertification was going to be subject to the - prior to the commencement of the waiver period, and when I asked them what they had done to show that they had been actively recruiting, they said that they had taken an ad out in their local newspaper. Now this particular clinic was in a town of 3,000 people and that was all that they had done. I suspect that if there was a PA, a nurse practitioner in a town of 3,000 people they probably knew who they were, let alone had the ability to contact them. So simply taking out an ad in their local newspaper was not sufficient to show that they were actively trying to recruit to fill that position.

As I said, it is only available to existing clinics and it is also not renewable in terms of the initial waiver. If you were to find a person, fill the spot, then subsequently lose that person, you could come back for a waiver later on but the - a waiver in and of itself cannot be extended beyond (the) one-year time period. So your staffing should always be one or more physicians, one or more PAs, NPs, or CNMs, and your PA, nurse practitioner, or nurse midwife must be on site and available to see patients 50 percent of the time that the clinic is open for patient care so that the -on a full-time equivalent, if your clinic is open for 40 hours a week then you must be able to show that you had a PA, nurse practitioner, or nurse midwife onsite and available to see patients 20 hours of that 40-hour period.

The surveyors are given some latitude as to the time period that they are to look at as far as meeting the 50-percent staffing requirement. If it makes sense to look at it on a weekly basis or a monthly basis, they have the flexibility to do that so that if your PA or your nurse practitioner is simply gone for a short period of time - you know, they're gone three days out of the week for a particular situation that arose, it was unexpected, it's not as if you are out of compliance because they weren't there two and a half - more than two days that week. You could look at it for that whole month. So if your PA goes on vacation for a week, again, it's not a situation where you're going to be hit with a deficiency because they can look at it on a monthly basis.

In terms of your physician, your physician will serve as the - as both a healthcare provider and a medical director. The physician must be onsite and available to see patients at least one day every two weeks unless greater onsite availabilities required by state law or state regulatory mechanism governing PA, NP, or CNM practice. The one-day/every-two-weeks is literally eight hours so that - I just got an e-mail this morning from a clinic that, for various reasons, their physician will only be able to be there now four hours every week instead of - I think it was 20 to 30 hours they had been there and they were asking if that would be a problem. Since it's four hours every week that would be eight hours with in a two-week time period which would meet the one-day/every-two-week time requirement so that is not a problem. You can - it doesn't have to be one day all at one time as long as you meet the total of one day, every two weeks that would sufficient.

They do have flexibility. Your surveyors do have flexibility on the availability requirement when there are extenuating circumstances. These would include an illness, extreme weather, driving conditions of short duration, or those emergencies which occur in the physician's practice and would require his or her presence elsewhere. When non-recurring circumstances cause postponement of the physician's visit, they should be documented in the clinical records.

So if your physician were to become ill and was not able to get to the clinic during a particular week - that four-hour timeframe - they were scheduled to be there that particular week they couldn't get there because of an illness, again, that in and of itself would not be sufficient to justify a violation but you want to document it as to the reason for the absence and be able to show that this was a non-recurring situation.

Same thing; we have some clinics that may be 80 or 90 miles between where the supervising physician's full-time practice is where the Rural Health Clinic is, there may be weather issues that would prevent the physician - during the winter months, for example, roads are closed and the physician can't get to the clinic to fulfill that requirement. Again, those would be acceptable reasons for not fulfilling that requirement on a non-recurring basis and you would need to document that as well.

Those are the non-recurring situations. There are also circumstances under which the physician would be unable to be at the clinic on a recurring basis and those too can be approved for a waiver. Those must come from the CMS regional office. And some of the examples of what would justify a waiver would be the remoteness of the clinic makes frequent travel impossible or unreasonable; the remoteness of a physician member's location has already placed the physician in a shortage area and required visits at least once every two weeks would severely detract from the physician's practice;, or if it is clearly established in advance that continuing conditions are known to be expected, snow, flood, Louisiana had Hurricane Katrina, examples of things like that. Perhaps there's a bridge that you must cross in order to get from where the main clinic is to where a Rural Health Clinic would be and that bridge is closed which would make travel difficult, if not impossible. These are all reasons why you could get the staffing - the physician availability requirement waived or modified but you would need to work with the - with the CMS regional office on that.

One of the ones I want to focus in on here, and this tends to be the most common reason for the waiver, you have a physician who is located in a shortage area and you have a Rural Health Clinic that's located in perhaps a different underserved area, and when the physician would leave his or her practice to go to do the supervisory requirements at the Rural Health Clinic would mean that healthcare is not available in the community where the physician would normally be practicing. And so the program has the flexibility to say, well, it doesn't make a whole lot of sense to have created a situation where the physician has to leave community A which - where he or she is the only healthcare provider to go to community B where they have a physician assistant or nurse practitioner or nurse midwife to fulfill a staffing requirement to where now you've got a physician and the PA or the physician and the NP and leave community A uncovered.

And so, if that's the situation that you would find yourself in, you can go to the regional office and you can ask for a waiver of the staffing requirement and demonstrate that that type of a situation exists and the opportunity would exist for a waiver. It is a subjective process again, as are many of the things in this program. It would be up to the regional office to make the determination that waiving that requirement does - would constitute a hardship but they do have the authority to do that.

The RHC model is based on the presumption that a significant amount of the care is in fact going to be provided by the nurse practitioner, physician assistant, or certified nurse midwife. Now because of that, there's an area of the program that has caused tremendous confusion, some problems I do want to touch on.

Under the current requirements, all Rural Health Clinics must employ at least one physician assistant, or one nurse practitioner, or one certified nurse midwife who is, as I said before, onsite and available to see patients at least 50 percent of the time. The word employ here is used in a very specific context and it means that there must be a (W-2) relationship between the owner of the clinic and the PA, the NP, or the nurse midwife.

The only situation in which the employment arrangement would not be there would be if the PA or the NP or the CNM was the actual owner of the clinic, in which case, obviously, there would not necessarily be an employment relationship as the owner. But if there's a situation - any situation other than where the PA or NP or CNM is the owner of the clinic, then there must be at least one PA, or one nurse practitioner, or one nurse midwife who is employed by the RHC in order to meet that requirement.

Now there is some disagreement with regard to situations where you have more than one nurse practitioner, nurse midwife, or physician assistant employed by the RHC and whether those additional personnel also have to be employees or can they can be contracted individuals to the RHC. There are different surveyors who take different - a different position and we are trying to get some additional clarification out of CMS central office.

There is some disagreement over whether or not every PA, nurse practitioner, or nurse midwife must be an employee or whether only the one. We know that at least one must and we will try and get additional information out as there's more clarity with regard to the additional personnel, but you must at least have one PA, nurse practitioner, or midwife who is an employee in order to meet that staffing requirement.

Now one of the other areas that sometimes comes up and there's confusion about is what does it mean when it says available to furnish patient care. This means that they are providing RHC services in the clinic, that they are physically present in the clinic even though they may not necessarily be providing services, or they are providing RHC services to clinic patients outside the clinic. In other words, they've gone a to patient's home, they've gone to someplace else where they're actually providing care to an RHC patient.

But the key is, number two, is physically present in clinic even though they're not providing services. If your PA, or your nurse practitioner, or nurse midwife is there and available to provide care even if they did not necessarily have a full schedule that day or for whatever reason didn't see patients that day but they were available to, that can be counted as meeting that staffing requirement.

In terms of the provision of services, each Rural Health Clinic must be capable of delivering outpatient primary care services. This comes up. Sometimes people say, well, are we allowed to provide surgery, are we allowed to provide other procedures. Yes you can provide those additional services but you must be able to identify that you can provide primary care services in your clinic and you must maintain written patient care policies. This is what is often referred to as the policy and procedures' manual.

The policy and procedures' manual must be comprehensive enough to cover most health problems that patients will usually see a physician about. In that book, I referenced that the outset is a sample policy and procedures' manual. I want to emphasize that it is a sample; it's a guide. Each policy and procedures' manual should be clinic-specific. It is a written description of how you intend to provide care in your clinic. It is a written description of the relationship that will exist between the physician and the PA, or the physician and the nurse practitioner, or the physician and the nurse midwife, and every situation is going to be different and have to reflect the unique circumstances of what exists in your community and how you intend to provide care.

You must include in there - you must describe the medical procedures available to the nurse practitioner, or certified nurse midwife, and/or PA, what is it that they're going to be doing, describe the medical conditions, signs or developments of required consultation or referral, what happens when a patient comes in that the PA may not be able to treat or wants to refer, what happens when a patient comes in and the physician wants to refer because the physician isn't comfortable providing care for that particular patient.

And your requirements must always be compatible with applicable state laws. You can't have in your policy and procedures' manual that your PA will maintain telephonic communication most of the time except for when the physician is onsite one day every two weeks if your state law requires the physician to be onsite more frequently. You can never override your state law requirements. You must always be in compliance with your state law.

If your state law requires a minimum of patient charts for care provided by your nurse practitioner must be reviewed by the physician, then that has to be consistently included in your policy and procedures' manual. It doesn't give you the right to supersede state law or any federal requirement. They must at a minimum be in compliance with state the law, but again, you want it to be an accurate reflection of what you intend to do in your practice.

The policy and procedures' manual, as I said, is a written description of how you intend to deliver care in your practice. It will describe the relationship between the physician and the PA, the physician and the nurse practitioner, physician and other personnel. Even if - and this is one of the areas I've had from people and they've said, well, why do we have to do a policy and procedures' manual, and in my view, I think it's a document that every practice should have that is going to utilize PAs, or nurse practitioners, or others, you know, how do you intend to deliver care.

It's a good document to have you put down on paper how you plan to deliver care in your practice; what are the relationships, what are the referral requirements going to be, or expectations going to be. It also serves as a good teaching document when you bring in new staff, that they can have a full, complete understanding of how you are providing care in your particular clinic, what the particular relationships are between the different professionals, and it can serve as a good educational tool for new staff.

Policy and procedures' manual must be developed jointly by the physician, or your PA, your nurse practitioner, or your nurse midwife, (and) one other health practitioner who's not a member of the clinic staff. In many situations this may be the local pharmacist who is available to your clinic. Someone who has a healthcare background who can be an outside set of eyes and ears to help you provide - perhaps think about some issues that you wouldn't have. But, this is a document that the staff has put together collaboratively.

It is not a document that is intended to be put together by one person who says, you know, this is the way it is, take it or leave it. It has to be developed collaboratively and your documentation must demonstrate that it was developed collaboratively. When your surveyors come in they're going to want to know that this was a collaborative effort between the various folks who would be involved. As I mentioned, the sample is available on our Web site.

In terms of the physical plant of the clinic, a Rural Health Clinic may be permanent or mobile. We do have some mobile Rural Health Clinics around the United States. There's not a huge number of them but the law and the regulations do provide that the clinic can be mobile. There are specific requirements that a mobile clinic must meet. Unfortunately, time doesn't allow us to go into that, but if that's something where you're trying to serve a large geographic area, you might want to consider.

Also, a Rural Health Clinic can be owned by any entity that is authorized to own a medical practice by the state in which the clinic is located. So as long as state law allows an entity, whether it's a community, whether it's a physician, a hospital, a physician assistant, or a nurse practitioner, or somebody else who can own a medical practice, the Rural Health Clinic program defers to state law as far as that is concerned.

RHCs can be either a for-profit or a not-for-profit entity. It is not required to be a nonprofit. This is something we've gotten from people over the years: do I have to be a nonprofit? No, you do not. You can operate it as a for-profit entity and it also maybe either a provider-based or independent. Now, that is where some confusion - what does it mean to be provider-based.

Provider-based means that it's owned and operated by any entity defined by the Medicare statute as a "provider". Now provider, in lay terms and in general conversation is a all-encompassing term, but for purposes of this particular section of the law has a very specific meaning and that is going to be either a hospital, skilled nursing facility, or home health agency. Those entities defined by the Medicare statute as a "provider."

The criteria for a facility being defined as provider-based is not unique to the RHC program. You can have any type - many multiple types of provider-based entities and the standards apply to any of those of which Rural Health Clinic is one. Included in your slides is a link to the criteria that must be met in order for a facility to be considered provider based.

When a Rural Health Clinic is initially surveyed, you're surveyed as a Rural Health Clinic. Whether or not you are subsequently defined as a provider-based Rural Health Clinic is determined by the fiscal intermediary in conjunction with the CMS regional office and based on your ability to demonstrate that you meet the specific criteria for being provider-based. And again, that is not unique to the RHC program.

Some of the things that will be looked at in making the determination of whether or not you're provided-based is the licensure of the facility, the types of clinical services that are going to be provided, the level of financial integration between the Rural Health Clinic and the parent provider. The public awareness, do you hold yourself out to the public as being formally part of a hospital, a nursing home, or a home health agency, or is there simply a sign out front that says this is the Smithville Rural Health Clinic but no indication that there's any formal connection to, for example, a hospital in your community.

One of the requirements of being provider based is that you actually hold yourself out to the public as being part of the provider, that it is not something where you have simply sought provider-based designation in order to get better reimbursement in this case but are in fact fully a part of the provider.

Typically, the questions are going to arise when the RHC is off campus. If the RHC is on campus there's going to largely be the presumption that you are provider-based and so there's going to be a higher level of scrutiny for those facilities that are located off campus. When you're operated under the ownership and control of the main provider there must be specific reporting relationships between the facility seeking provider-based status and the main provider and you essentially must be treated, even though you're not on campus, as if you were a department of the provider with the same level of frequency, intensity, level of accountability that exist in the relationship between the main provider and one of its existing departments.

Again, it's not a situation where a hospital has said, well, we're going to own you and we're going to tell everybody that you're part of us but we're somehow going to treat you differently in terms of financial integration, the organizational integration, et cetera. You're going to have to demonstrate that even though you're not physically at the hospital and you're 30 miles away that there is a similar level of integration had you been there physically onsite.

Now there are some distance requirements if your facility is located within a 35-mile radius of the campus of the provider and criteria for facilities located more than 35 miles from the parent provider. These can be found in the program memo referenced above. And again, for time limitations, we don't have the time to go into that. If you have something you're looking at, I would encourage you to look at the program memorandum for which there was a link provided and you can check that out. Clearly, we have many provider-based RHCs that are more than 35 minutes - miles away from the parent provider that it is something you will need to look at to make sure that you can meet those criteria.

Independent Rural Health Clinics are those Rural Health Clinics that are not designated as provider-based. In other words, every Rural Health Clinic is considered an independent RHC unless it separately applies for provider-based designation. You can have a hospital that owns and operates a Rural Health Clinic that is an independent RHC. The mere fact that the hospital owns it does not make it provider-based. Unless they meet the criteria, it can still be an RHC, it's just that at that point it would be an independent RHC owned by the hospital as opposed to a provider-based RHC owned by the hospital, and, you know, you must meet those criteria.

The direct services that must be provided by your clinic staff are the diagnostic and therapeutic services, as I mentioned earlier, commonly furnished in a physician's office. You must be able to demonstrate that you can provide basic laboratory services. There are six tests that every Rural Health Clinic must demonstrate that they have the ability to provide those tests: chemical examination of urine, hemoglobin or (hematocrit), a blood sugar test, examination of stool specimens for occult blood, pregnancy tests, and primary culturing for a transmittal.

Now one of the areas where there's been some confusion is where the clinic, as I said, must demonstrate that they are able to perform these tests but this does not preclude the RHC from sending those tests out to a referenced lab or other lab if it is considered more cost effective. In other words, just because you have the ability to do it doesn't mean that you have to if you can do it more efficiently elsewhere but you do have to demonstrate the ability to provide those tests onsite if requested.

There's also, as many of you know - I'm sure there are billing issues. Although those are required to be performed by an RHC or available, the lab services are not considered RHC services so they do not get covered under your all-inclusive rate. You must be able to provide emergency services. By this, it means first response to common, life-threatening injuries and acute illnesses. You are not expected to be an emergency room but you should be able to provide first response to common, life-threatening injuries or acute illnesses and you should have available drugs used commonly in lifesaving procedures.

Now we very often get questions, well, what specific drugs do we have to have. I would talk with your state surveyors about what their expectation is because it's going to vary from community to community or state to state; again, whatever may be reasonable in terms of your particular situation and how you may handle it in your community. What is available in some communities - they're very remote, sparsely populated with very limited staffing is not going to be held to the same standard as a clinic that is in a larger community that has a higher level of care available or more providers available.

You can provide services through arrangement and they can be provided by individuals other than the clinic staff. That would be in-hospital care - inpatient hospital care, specialized physician services. You can have a specially physician come into your clinic and provide care, specialized diagnostic and laboratory services, interpreter for foreign language - you will need to be able to demonstrate that but that can be done through arrangement - or interpreter for deaf and devices to assist communication with blind patients or deaf patients. You're going to have to be able to demonstrate that if you have individuals who show up with a language impairment that you have an ability to get appropriate communication for those individuals.

Maintaining of patient health records, your record system is going to be guided by your written policy and procedures' manual. You're going to have to have a designated person - - not necessarily a health professional - - a designated professional staff member who's responsible for maintaining those records. And those records are going to be required to have specific information within - which will include also the fact that you are maintaining the confidentiality safeguards against loss, destruction, or unauthorized use.

Now much of this is familiar to most practices today because of the HIPAA requirements that have been in place in the last few years, but the fact is that RHCs have been under some form of requirement in terms of safety and security of medical records since the inception of the program so this really is almost redundant in many ways. If you are HIPAA compliant, you should be in compliance with the RHC requirements with regard to the confidentiality and safeguarding of the record.

The written policy and procedures' manual must also talk about the governing use and removal and release of information, who will have the ability to have access to that information, how is it going to be removed, who will it be released to, and the circumstances under which it will be released, and you must have written patient consent in order for records to be released. Again, the RHC requirements predate the HIPAA requirements so none of this should come as unique now to the RHC program but they are requirements.

Now I'd like to talk a little bit about the RHC cost report. The RHC cost report is your financial audit of your practice and it's going to be looking at both costs and visits to determine the average cost per visit for each Rural Health Clinic. In the RHC manual that I've referenced several times now is a sample of a completed RHC cost report so that you can go in there and actually see how the RHC rate for that particular clinic was determined, the kinds of information that was required, and how those numbers move from column to column and chart to chart and ultimately end up with your average cost per visit.

Some of the things you do need to have available when you do a cost report would be include the hours of operation of the facility as an RHC and the hours of operation of the facility as a non-RHC and I want to spend just a second on this particular area.

You can have your clinic open five days a week, six days a week, two days a week. The fact that you are certified as a Rural Health Clinic does not mean that you have to be certified as a Rural Health Clinic during all those hours of operation. For example, if your clinic is open Monday through Friday you can have it designated as a Rural Health Clinic on Monday, Wednesday, and Friday and you're not a Rural Health Clinic on Tuesday and Thursday.

Now for those of you who've looked at this, it can have significant financial implications, in some cases positive, for your clinic but you're not required to be a Rural Health Clinic during all of the hours of operation of your RHC. Maybe you're an RHC five days a week but from 9:00 in the morning till 5:00 in the afternoon and then you have evening hours for walk-in patients and from 6:00 till 9:00 you're not an RHC. Those create some particular challenges for the people who are doing your cost report but it is permissible. You just simply have to be able to note on your cost report the hours of operation as an RHC and the hours of operation during - as a non-RHC.

You're going to be able to have information on the compensation for your clinic's staff broken down by a provider type, both health professional and administrative; what are - what is your compensation for physicians, what is your compensation for physician assistants, nurse practitioners, what is your compensation for the receptionist at the front desk. All of that will be broken out into your cost report and part of the calculations. Your physician - and this comes up because compensation is a very broad term. It does not look exclusively at salary. It may be bonuses; it may be various things that you've done to incentivise efficiency. Those are all part of the compensation package for your physician, or your PAs, or you nurse practitioners.

You're going to have to have your information on your medical supplies; what medical supplies do you keep on hand and what are your costs. Those will all go into your cost report. The cost of facility overhead, what is your rent, if you rent the building, what is your interest - mortgage interest payments if you own the building, what's your insurance costs, what are you paying for utilities. Those will all go into your cost report and then you're going to need - so you're going to need to have all of that information for the overall cost to operate this particular practice.

And out of that, one of the things that you're going to develop is your per-visit rate and that is going to be based on patient encounters. And this is an area where there's often some confusion in the RHC program. Patient encounters are face-to-face encounters between the physician, the PA, the nurse practitioner, certified nurse midwife, or your mental health providers if you have mental health services in your clinic and you're going to need to identify all of those encounters by provider type. You're going to need to also be able to identify your visits by payer category; i.e., how much - how many visits did I provide in our clinic that were to patients under Medicare, how many have provided to patients under Medicaid, how many were provided to commercially insured, and how many were provided to self-pay or uninsured.

You'll also need to be able to calculate your Medicare bad debt. Medicare bad debt is essentially money that was not collectable from beneficiaries for the Medicare co-pay or deductible and that can be classified as Medicare bad debt, which is ultimately reimbursable on your cost report.
Essentially, what this is going to come down to is after you've gone through pages and pages and pages of accounting information, a numerical equation in which you have your total allowable costs in the a numerator, your total allowable visits in the denominator, and out of that, you're going to get your average cost per visit.

Medicare will pay 80 percent of the RHC rate - your clinic specific rate up to the cap for independent RHCs or those provider-based RHCs not operated by a hospital with fewer than 50 beds. The RHC cap for 2006 is $72.76. So if the equation - your total allowable costs over total allowable visits - came out to $80 a visit and you're not a provider-based hospital with fewer than 50 beds, you're capped at $72.76. But if your rate comes out below 72.76, then your Medicare payment will be based upon what your actual cost-per-visit came out to.

You'll receive the RHC rate for Medicare patients for every Medicare encounter. This is different than what you would normally see in Part B for a visit. An encounter is a face-to-face visit between a Medicare beneficiary and a recognized provider for purposes of the RHC program, which would be a physician, a PA, a nurse practitioner, certified nurse midwife, or one of the mental health providers, clinical psychologist, or a licensed clinical social worker, or Master's degree social worker for - and I've underlined here - a medically necessary reason.

And that's very important because very often I'll have people say, well, does that mean as long as my physician sees the patient everything is going to be a visit. No because it's not necessary sometimes for that physician to see a patient for something that does not require the physician's level of knowledge or expertise. So simply because it may be face-to-face doesn't meet the test of the visit. It must also be medically necessary.

This very often comes up in the context of injections - diagnostic tests with regard to injections. Typically, an injection is not going to be an RHC visit even though the physician, or PA, or the nurse practitioner may make that injection because other than certain circumstances, certain types of injections, it is not required for the physician to provide that particular service.

In terms of diagnostic tests, lab and x-ray, the technical component of a lab or an x-ray is not an RHC service, therefore, it's not billable as a RHC service but the professional component - the visit that back to the reason for the lab or the x-ray would be an RHC encounter.

Diabetes education, this is a relatively new covered service. While the service itself is covered, it is not - does not constitute an RHC encounter so the delivery of that service does not count in the - in the numerical equation in terms of the denominator towards allowable visit but all of the costs for diabetes education are allowable costs and go into the numerator of your equation.

Flu and Pneumococcal vaccine are RHC-covered services but are separately reimbursable on the cost report and there's a specific place on the cost report to calculate and identify your cost for the delivery of Flu and Pneumococcal vaccine.

Visits to the hospital, a visit to the hospital by the RHC personnel does not constitute an RHC visit. That is not - so it would not count there. Visits to a nursing home, skilled nursing facility, or other - a skilled nursing facility is considered an RHC visit and would be covered as an RHC encounter, again meeting the test of medical necessity. Visits to a patient's home to see an RHC patient at the home by one of your covered providers where medically necessary would also be an RHC visit.

Now, for nursing homes, one of the questions comes up, what about swing beds? If it's a hospital swing bed and that bed at that time is considered a skilled bed as opposed to an inpatient acute care bed that would be an RHC visit. It depends on what is the status of that bed at that particular time.

That concludes the prepared remarks that I had done. I'll be happy to answer any questions you may have.

Operator, if you would, go through the process for them to be able to ask a question. And I'd just like to remind everyone that during - when you get - your line is open, please identify by your name and the location - the city and the state you're calling from.

Operator:

Thank you. The question-and-answer period will be conducted electronically. To ask a question, please press the star key followed by the digit one on your touch-tone telephone at this time. And we will take our first question.

Bill Finerfrock:

Go ahead. Somebody's line's open.

(Dorothy Munce):

Hi. My name is (Dorothy Munce) from ((inaudible)) and Medical Clinics in Davenport, Washington. Does
the question regarding swing bed visits being a rural health - can be billed as a Rural Health Clinic visit? Can that be based on your FI? Because currently, we are billing those as non-RHC visits because they are being seen in the hospital versus the skilled nursing facility.

Bill Finerfrock:

Well, remember, that bed at that - once - the difficulty with the swing bed is that it literally swings back and forth. Sometimes it's an acute care bed, sometimes it's a skilled bed depending on the particular situation. When it is defined in a hospital as being reimbursed for the care provided to an in-patient, while it is considered an acute care bed, then that would not be an RHC visit. Once that patient switches over and is now considered a skilled patient and the hospital is no longer being reimbursed on the DRG system but rather as a skilled nursing facility services that then is a rural health clinic visit. So even though the patient has not moved from the bed, it's determined by how the hospital is reimbursed for the care being provided. If it's hospital care, acute care, then it's not a Rural Health Clinic visit. If it's skilled care, they're being reimbursed for it, it is a Rural Health Clinic visit.

(Dorothy Munce):

So only if it's a Part A swing bed and not a - say a Medicaid - where Medicaid is paying the room cost versus Part A?

Bill Finerfrock:

Well, again, what is the - what is the designation of the patient at that point? Are they a - are they in skilled care? Are they still getting acute care hospital . . .

(Dorothy Munce):

No, it would be a swing bed but there is a non-skilled swing bed and a skilled swing bed. It's just like in long-term care in the nursing home facility.

Bill Finerfrock:

If it's a non-skilled - if they out of an acute care bed, whether it's non-skilled or skilled, it is now a Rural Health Clinic visit. If they're in - if the bed is defined as an acute care bed, it's not an RHC visit. If it's something other than an acute care bed, it's an RHC visit.

(Dorothy Munce):

OK. (All right). Thank you.

Bill Finerfrock:

Yes.

Operator:

We'll move to our next question.

(Linda):

Hi. I'm (Linda) from Mark Reed Healthcare Clinic in McCleary, Washington, and my question is on the Medicare bad debt, would charity care be considered bad debt?

Bill Finerfrock:

No.

(Linda):

OK.

Bill Finerfrock:

When you provide charity care, you're essentially saying we have no intention of collecting this money. We're doing it as part of a charity care policy. Bad debt only applies to that debt that you are intending and make an effort to seek to collect but are unable to collect from the patient. So because you define it as charity care, you have no intention of collecting it, therefore, it's not bad debt.

(Linda):

OK, thank you.

Operator:

And onto our next question.

(Bonnie):

Hi, Bill . . .

Bill Finerfrock:

Yes.

(Bonnie):

. . . this is (Bonnie) from Great Lakes in Cadillac, Michigan. I have a couple of questions for you. One is regarding the medical director. Can we have a contracted medical director or does it have to be a physician that is actually practicing within our facility?

Bill Finerfrock:

You need to give me a little bit - in terms of the contractual relationship it does not have to be an employee, it can be contracted. But when you're saying the medical director, what is it that they are doing?

(Bonnie):

Well, currently, we have - one of our physicians is the medical director of our - of our clinic . . .

Bill Finerfrock:

OK.

(Bonnie):

. . . but we're looking at possibly moving that position to a contracted physician that would not be actually seeing patients.

Bill Finerfrock:

OK.

(Bonnie):

And from what I'm seeing here on your presentation, they need to be seeing patients or be available to see patients.

Bill Finerfrock:

Available to see patients.

(Bonnie):

So clarify that for me.

Bill Finerfrock:

Well, is the medical director ever going to visit the Rural Health Clinic?

(Bonnie):

Yes, the medical director would be onsite, would be given direction to the - to the providers here, but not actually scheduled - our thought was, you know, may not actually be scheduled to see patients within the clinic.

Bill Finerfrock:

You're going to get some pushback from surveyors.

(Bonnie):

OK.

Bill Finerfrock:

Typically, what it says is that they have to be available to see patients. Some surveyors are going to want to see that they are actually scheduled to see patients. I would talk to your surveyors to see what they would deem to be acceptable, but technically, the requirement is that they have to be available to see patients. But I don't believe that there's anywhere that it says that they actually have to see patients.

(Bonnie):

OK, OK, and the other question comes from the advisory committee. My understanding of that before was that it had to just be an outside community member. This is the first time I've seen where it actually said an outside health practitioner.

Bill Finerfrock:

Well, that's for purposes of the development of the policy and procedures' manual.

(Bonnie):

Right. We - I mean, we do that but our outside people are not - are not health practitioners or clinicians. You know, they are business people within the community.

Bill Finerfrock:

There's two different things here: one is your advisory board and the other is the development of your policy and procedures' manual. It's the policy and procedures' manual that requires that it be reviewed or participation from some other health professional. Your advisory board, which I didn't get into, does not - you're not required to have an outside health professional because one may not exist but you should have your policy and procedures' manual reviewed by some other health professional to have them take a look at it.

(Bonnie):

Outside the clinic . . .

Bill Finerfrock:

Yes.

(Bonnie):

. . . and documentation of that.

Bill Finerfrock:

Yes, who did it and when did they do it.

(Bonnie):

Is that new?

Bill Finerfrock:

I don't think so.

(Bonnie):

OK. All right. Thanks very much.

Bill Finerfrock:

Yes.

Operator:

And as a reminder to ask a question, it's star one on your telephone. We'll move to our next question.

(Phyllis Burke):

Yes, I'm (Phyllis Burke) from South Dakota. I had a couple of questions here. One is an old question probably but just wanted some clarification on it and that is the deal with the lab test for clinic patients in order to get - this would be a clinic that is connected or a provider-based clinic to a critical access hospital care so in order to get the cost reimbursement the patient has to physically walk over to the lab to be drawn in the hospital. So (if) someone has asked then is there any reason that if you have your Medicare patients do this that you're non-Medicare patients could stay in the lab and be billed as a Rural Health Clinic service versus having them both go over to the hospital?

Bill Finerfrock:

You lost me there. Who is the second group of patients?

(Phyllis Burke):

Non-Medicare.

Bill Finerfrock:

So we're talking about Medicaid?

(Phyllis Burke):

Or commercial.

Bill Finerfrock:

There's no such thing as a Rural Health Clinic visit in the commercial world.

(Phyllis Burke):

No, but you'd be doing - you could be doing lab - you would be doing ancillary, like lab tests.

Bill Finerfrock:

So you're going to - you have a lab in your RHC, you're going to have your commercially-insured individuals have the lab - your RHC lab perform the test, but for Medicare patients, you're having them go over to the critical access hospital's lab?

(Phyllis Burke):

Yes, and the reason that that is being looked at is because for commercial purposes there would be another deductible if it's done at the hospital versus the lab - versus the clinic.

Bill Finerfrock:

I don't know the answer to that question. There's probably a lot of specifics that we don't have time to get into that may dictate which way the answer would go on that that I don't have an answer for you.

(Phyllis Burke):

OK, then in regard to a question that was earlier asked just on that swing bed issue, if the - if the facility has not done a swing bed visit as a Rural Health Clinic visit can they go back and re-bill (this)? And if so, how long?

Bill Finerfrock:

Well, you generally have up to a year to submit a claim for Medicare. So if you feel that you've incorrectly billed visits that you billed to Part B that should have been billed to Rural Health Clinic, you'd generally have up to a year to go back and fix that.

(Phyllis Burke):

OK, now, would (it) make any difference because the clarification came out saying that this was an allowable way to do it?

Bill Finerfrock:

Well, it wasn't a clarification; it was a change in the law.

(Phyllis Burke):

OK.

Bill Finerfrock:

It depends on when you're talking about it. Up until January 1 of 2005, it was not an RHC visit in the swing bed; it was only after the law was changed that those became RHC visits.

(Phyllis Burke):

OK, so, basically - OK, I see. OK, thank you.

Bill Finerfrock:

OK.

Operator:

And we'll take our next question.

(Susan Welch):

Bill . . .

Bill Finerfrock:

Yes.

(Susan Welch):

. . . hi, my name's (Susan Welch) from (Nuremberg), North Carolina. I have a question. We have a physician assistant that sees rest home patients . . .

Bill Finerfrock:

OK.

(Susan Welch):

... (unskilled) and finds home healthcare plans.

Bill Finerfrock:

OK.

(Susan Welch):

Is that a billable?

Bill Finerfrock:

Well, first of all, it's a test of medical necessity. If they are - there are a couple of issues here. One is - as presumably these are all individuals who are patients of the Rural Health Clinic, you have an established medical record for them and there - if the PA is simply going to see them in their - where their domicile, if it's a residential facility or elsewhere other than a skilled nursing facility, so, as far as that is concerned, it would be.

Now the second question would be what is it that the PA is actually doing when he or she goes to see that patient. Is it a medically necessary visit and without even - I mean, unless you can tell me what they're doing when they go to see those patients, I can't tell you whether it's going to be a Rural Health Clinic visit because it's going to hinge on the test of medical necessity.

(Susan Welch):

OK, I'm not sure what he does either other than I know he signs home healthcare plans so that they can get home healthcare.

Bill Finerfrock:

And that's all that he's doing is just simply going to do a home healthcare plan of care?

(Susan Welch):

My guess is that's probably what he's doing. I mean, I imagine he's seeing the patient.

Bill Finerfrock:

Yes. I mean, I presume that there's some level of medical evaluation but I don't know how often the plan of care - plans of care need to be updated. I would - who's your - you're in North Carolina?

(Susan Welch):

Yes.

Bill Finerfrock:

Is it - are you - are you provider-based or independent?

(Susan Welch):

Provider.

Bill Finerfrock:

I would check with your provider - Fiscal Intermediary to see what they do or also get more information from your PA as to exactly what's going on during the encounter.

(Susan Welch):

OK, so (if) it's medically necessary, though, and . . .

Bill Finerfrock:

Medically necessary. If it meets the test of medically necessary, then it would - you know, the location is an acceptable location and provides Rural Health Clinic service.

(Susan Welch):

And the location would be a revenue code ((inaudible)).

Bill Finerfrock:

Well, there are new revenue codes. I don't have them here in front of me. We've sent them out. They've created several new revenue codes, of which one is a domiciliary care facility and it sounds like you would use that revenue code.

(Susan Welch):

OK. All right. Thanks.

Bill Finerfrock:

Yes.

Operator:

And moving onto our next question.

(Kelly Ann):

Hi. This is (Kelly Ann) from (Penora), the (Penora) Medical Clinic, and my question is the outside source that needs to help with the policy and procedures' manual can that be from the owner of the RHC - (like run) by a hospital?

Bill Finerfrock:

You mean a nurse or a - some other health professional at the hospital?

(Kelly Ann):

Yes.

Bill Finerfrock:

Yes, that would be fine.

(Kelly Ann):

OK, I just didn't if they needed to be somewhere outside of the owner. OK, thank you.

Operator:

And our next question.

Bill Finerfrock:

I think is going to have to be the last question, Operator. I think we're up on our hour.

(Carrie):

This is (Carrie) at Triangle Healthcare

Bill Finerfrock:

OK.

(Carrie):

I have two quick questions.

Bill Finerfrock:

((inaudible)) from (Carrie)?

(Carrie):

Triangle Healthcare in Chester, Montana.

Bill Finerfrock:

OK.

(Carrie):

In regards to safeguarding against destruction of charts . . .

Bill Finerfrock:

Yes.

(Carrie):

... can you have open shelving system or do you have to have a file system like open shelving?

Bill Finerfrock:

Is there no - there are no doors on the shelves?

(Carrie):

No, it would be open shelving.

Bill Finerfrock:

Is the - is the - is it in a room that is - that can be locked?

(Carrie):

It could be, yes.

Bill Finerfrock:

This is an area where there's been different interpretations by surveyors. We had a clinic a few years ago that had an open shelving system in which the surveyor came in and told them they would have to put in locking cabinet doors on the shelving. We were able to get (it) that that was OK as long as it was in a locked room, that the - that the shelves themselves did not have to be locked as long as the room could be made secure. So it should be sufficient.
Have you been surveyed and has there been a question raised about that?

(Carrie):

No, we're an existing provider-based RHC and we're looking at the possibility of changing from file cabinets to open shelving so I just wanted to check into it before we went to the expense.

Bill Finerfrock:

Yes, it's - I mean, I would - I would encourage you to contact your surveyors to make sure that they have not - they don't have a problem with it. As I've said several times, there's a subjective component to this where you're dealing with individuals who are making interpretations. We have gotten it, that open shelving is permissible as long as the room can be locked and made secure.

(Carrie):

OK and just another really quick question on the cost report. We're a provider-based owned by a hospital.

Bill Finerfrock:

OK.

(Carrie):

Right now we keep all the physicians' compensation in the RHC and what is your feeling about moving some of those costs based on percentages from the time studies to like the hospital ER or nursing home?

Bill Finerfrock:

So - I probably can't give you an opinion because it's probably too complicated but - so right now all of your compensation for the physician is appearing in your RHC cost report regardless of whether they're seeing patients there or not?

(Carrie):

Correct.

Bill Finerfrock:

I would think you'd want to look at that because I think you might run into - are you - did you say you're a critical access hospital?

(Carrie):

Yes, we are.

Bill Finerfrock:

So you bill (at) 50 beds?

(Carrie):

Pardon me?

Bill Finerfrock:

There are fewer than 50 beds.

(Carrie):

Yes.

Bill Finerfrock:

So you're exempt from the cap. You might run into a question of reasonableness, that if that physician is not spending all of that time in the RHC and those costs should be allocated elsewhere that the (physical) intermediary would question those.

(Carrie):

OK.

Bill Finerfrock:

All right?

(Carrie):

Thank you.

Bill Finerfrock:

I think that's going to have to do it for today's call. I want to thank everybody for all of the great questions and your participation. I also want to thank the Office of Rural Health Policy for their generous support of this series.

A transcript from today's call will be available in a few weeks and it'll be posted on the RHP Web site and we will get notification of that out through the list serve. The next conference call will be announced shortly and you will receive an e-mail notice of the date and topic and time of that next call.

I want to encourage you to let others know about this series. I encourage them to register and participate. As you heard today, we have folks from literally one side of the country to the other participating. This has been a great forum process to get people and get some of these questions out there. And if you have suggestions on future topics, please don't hesitate to send them to me at info@narhc.org.

So thank you again for your participation. We look forward to talking to you again.

Operator:

Once again, that does conclude today's conference call. We thank you for your participation and have a great day.

END