CMS 2015 PQRS Payment Adjustments and Implications on RHCs/FQHCs

By Alyssa Shinto, NACHC Federal and Regulatory Affairs Intern

On January, 26 2015, the Centers for Medicare and Medicaid Services (CMS) released a Frequently Asked Question document on the 2015 Physician Quality Reporting System (PQRS) Payment Adjustment and Providers who Rendered Services at Rural Health Clinics (RHC)/ Federally Qualified Health Centers (FQHC). We have heard from several FQHCs that have received letters stating they will receive a 1.5% reduction in the 2015 Medicaid Part B Physician Fee Schedule (MPFS) reimbursements, even though it was their understanding that FQHCs did not qualify for PQRS. The letter states, “PQRS eligible professional (EPs) or the group practice that registered for the 2013 PQRS group practice reporting option (GPRO) did not satisfactorily report 2013 PQRS quality measures in order to avoid the 2015 PQRS negative adjustment.”  The following FAQ clarifies that while FQHC services are not eligible for the PQRS negative adjustment, those services that are billed on the Medicare Physician Fee Schedule are eligible for the negative adjustment. Please do not hesitate to contact us should you have any questions about this FAQ.

We represent a Rural Health Clinic (RHC) and/or Federally Qualified Health Center (FQHC) that received a letter from CMS in 2014 stating on January 1, 2015, we will begin receiving the 2015 PQRS negative payment adjustment on all Part B covered professional services under the Medicare Physician Fee Schedule (MPFS). Why are we receiving this? We thought we were ineligible.

Services furnished by RHCs and FQHCs are not eligible for the PQRS incentive payment and are not subject to the PQRS negative payment adjustment. Only covered professional services furnished by eligible health care professionals (EPs) that are paid under the Medicare Physician Fee Schedule (MPFS) are eligible for PQRS.

Please review the Tax Identification Number (TIN)/National Provider Identifier (NPI) combination included in the letter received from CMS, as this is the individual provider to whom the 2015 payment adjustment will apply, not the clinic or facility. An example of why a physician who practices at an RHC/FQHC may be subject to the 2015 payment adjustment is that (s)he bills non-RHC or non-FQHC services under the MPFS via the 1500 claim form. The provider’s contact information used to send the 2015 PQRS negative payment adjustment letters was gathered from the Provider Enrollment, Chain, and Ownership System (PECOS). Letters that include only a TIN apply to the entire group practice as the TIN is registered to participate in the 2013 PQRS GPRO. The group’s contact information used to send the 2015 PQRS negative payment adjustment letters was gathered from the 2013 PQRS GPRO registration or self-nomination system.

CMS would also like to remind participants that there are no hardship or low volume exemptions for the PQRS payment adjustment. All EPs who billed Medicare Part B for non-RHC/FQHC services in 2013 must have satisfactorily reported PQRS in order to avoid the 2015 negative payment adjustment.

As outlined in the 2015 PQRS payment adjustment letter, if you believe that the 2015 PQRS payment adjustment is being applied in error, you can submit an informal review request. All informal review requests must be submitted via a web-based tool, the Quality Reporting Communication Support Page, during the informal review period, January 1, 2015 through February 28, 2015.

Please contact the QualityNet Help Desk at 1-866-288-8912 (TTY 1-877-715-6222) or via for help with questions. They are available from 7:00 a.m. to 7:00 p.m. Central Time Monday through Friday.

Medicaid Fee Bump Expires in 2015: The Impact on Primary Care Provider Payments in States

Due to concerns over physician reimbursement rates in Medicaid and the reported effect on participation of providers, the Affordable Care Act (ACA) included a mandatory two-year increase in Medicaid fees for primary care services by eligible providers to Medicare rates.[1] This increase, fully funded by the federal government, was approved to take effect on January 1, 2013 (whether or not states had implemented the rate change by that date), and, as Congress did not extend this increase, expired on December 31, 2014.

In the Kaiser Commission on Medicaid and the Uninsured (KCMU) Annual Medicaid Budget Survey conducted in October 2014, 15 states indicated that they intend to continue the fee increase in 2015 using state funds at their regular federal matching rate, and 12 states were undecided. Twenty-four states said they did not intend to continue the fee increase, with 23 of the states in this analysis covering 71.3% of all Medicaid enrollees. Prior to the primary care increase, 9 of these states had fees that were at or above 76% of Medicare fee levels (AL, AK, CT, DE, IA, MS, NE, NM, SC).  In fact, in North Dakota, primary care physicians were paid 134% of Medicare rates.[2]  In Michigan, the state plans to use state funds for half the increase. Some states indicated they would change the terms of the fee increase, by either adding to or limiting the types of providers who would receive the increase.

In a recent study from the Urban Institute, the effect of the expiration of the primary care fee bump was estimated using the state’s Medicaid fee schedule as compared to the Medicare fee schedule for selected procedure codes. In states that do not plan to extend the fee increase, primary care fees would be reduced by 47.4% and in states that plan to extend the fee increase, or are undecided, the reduction would be 31% and 31.7% respectively if the fee bump were not sustained. As comparison, if no state would extend the fee increase (with the exception of Maryland), the impact would be an average reduction in fees by 42.8%.[3]

Comparing states with above and below average primary care physician participation in Medicaid, the reduction in fees are greater in states with below average participation, although it is unclear whether the increase in payments has had an effect on the number of physicians willing to accept Medicaid patients.[4] However, the study did not find any differences in fee reductions based on whether the state had expanded Medicaid in 2014. For state-by-state analysis, please refer to the Urban Institute brief.

Although the impact of the fee increase in physician participation has not yet been evaluated, in a Stateline report (The Pew Charitable Trusts), Sandra Decker, from the National Center for Health Statistics at the Centers for Disease Control and Prevention, commented that “past evidence indicates that Medicaid pay increases spur participation by physicians,” and predicted that “lower fees will make it harder for Medicaid patients to find doctors willing to see them or that they will have to endure long waits to see doctors who accept Medicaid patients.” The implications of this impact on provider participation are of concern, especially during a time when more patients are gaining coverage and in areas with limited access to care.  If fewer primary care physicians are willing to accept Medicaid patients, there may be a greater need for health center providers, as the demand for services in underserved areas continues to increase.

[1] For a summary of the increase in the Final Rule published on November 6, 2012, see: Increasing Medicaid Payments for Certain Primary Care Physicians in 2013 and 2014: A Primer on the Health Reform Provision and Final Rule, available at

[2] Zuckerman, s.,and Goin, D. How Much Will Physician Fees for Primary Care Rise in 2013? Kaiser Family Foundation, December 2012, available at

[3] Maryland used state funds to provide primary care fee increases to all provider types, and thus, it is assumed the increased rate would continue, as noted in Zuckerman, et al. (2014).

[4] Crawford, M., and McGinnis, T., Medicaid Primary Care Rate Increase: Considerations Beyond 2014. Center for Health Care Strategies, September 2014, available at

HRSA Webinar on Annual Recertification for 340B Covered Entities

We wanted to let you know about an upcoming webinar with HRSA’s Office of Pharmacy Affairs on the annual 340B Recertification Process.  Please see the details of the webinar below.   Should you have any questions about the webinar or the recertification process, you can contact the Prime Vendor Program at 1-888-340-2787 or

The Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) is required to recertify all participating Comprehensive Health Centers enrolled in the 340B Program annually to ensure all Comprehensive Health Centers are appropriately listed on the 340B database and that all Comprehensive Health Centers remain compliant with the 340B Program requirements.  To help covered entities with recertification the OPA will hold a webinar on January 7th, 2015 at 2 PM EST. Please see the detail information regarding the webinar below:

Meeting Name:  HRSA OPA 340B Recertification of HRSA and IHS Grantees

When: January 7th, 2015 2:00 PM – 3:00 PM EASTERN TIME

Conference Number(s):  888-989-9718

Participant Code: 3351663

To join the meeting:

In addition to the webinar, OPA suggests the following steps to ensure a smooth recertification:

  • Visit the 340B Program database and verify that your Comprehensive Health Centers information is correct and that the listed sites remain eligible to participate in 340B.  It is the covered entities responsibility to keep its 340B database record up-to-date, this includes contract pharmacies.  The database record should reflect the Comprehensive Health Centers current information.  If your entity’s record is incorrect, please update it prior to the recertification process by submitting a change request form to OPA by following this link to the 340B Program change form. Questions regarding registration, change requests, or recertification may be directed to the 340B Prime Vendor Program at 1-888-340-2787, or by sending an e-mail to

Electronic Health Records Incentives and Meaningful Use Penalties- A New Round of Questions Answered

Recently, we have received several inquiries from health centers regarding Electronic Health Record (EHR) Incentives and “meaningful use” (MU) requirements and penalties as prescribed in the HITECH Act. As most health centers will recall, due to the more generous benefits available under the Medicaid incentive program, virtually all eligible health center providers opted to participate in the Medicaid versus Medicare EHR incentive program. Health center organizations were not eligible as entities due to the HITECH Act’s focus on “eligible professionals” not health center organizations. Many readers will also recall that there were no downward payment adjustments under the Medicaid incentive program for failing to demonstrate meaningful use, only the potential loss of incentives themselves. However, as the date for Medicare payment adjustments approaches (January 1, 2015) some health centers are wondering whether they should be worried. Here are some Frequently Asked Questions (FAQs) and the answers.
Q: Are health center providers who participated in the Medicaid EHR incentive payment program subject to downward adjustments to their health center’s base Medicaid payment rate?
A: No. The Medicaid EHR Incentive program does not have payment penalties for failure to demonstrate meaningful use though participating providers do have to demonstrate meaningful use to continue receiving incentive payments.
Q: Are health centers’ Medicare FQHC claims subject to downward adjustment due to failure to demonstrate meaningful use?
A: No. The HITECH Act and its accompanying regulations indicate that for providers who fail to meet meaningful use standards there is a payment adjustment to the “covered professional services” billed by the eligible professional under the Medicare physician fee schedule. Health center Medicare FQHC payments are not made under the fee schedule.
Q: Could health center providers be facing payment adjustments January 1, 2015 to Medicare services billed outside of the FQHC rate under the Medicare Part B fee schedule if they fail to demonstrate meaningful use?
Q: What are the payment adjustments for providers who fail to demonstrate meaningful use?
The non-FQHC Medicare fee schedule claims of eligible health professionals at health centers could be adjusted down by 1% per year capping out at 5%.
Q: Which professionals are subject to these adjustments?
The fee schedule claims of all eligible professionals who fail to demonstrate meaningful use are subject to adjustments January 1, 2015. Eligible professionals are essentially all physicians as defined in the Medicare stature, such as: a doctor of medicine or osteopathy, a doctor of dental surgery or medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor. Eligible professionals who demonstrated meaningful use in Medicare or Medicaid in 2013 are not subject to 2015 reductions but will need to demonstrate meaningful use again in 2014 to avoid 2016 payment adjustments.


Recent Medicaid Developments from the States

Since the elections, there has been a flurry of Medicaid expansion activity in the states that we wanted to make sure you were aware of.

NEW HAMPSHIRE: New Hampshire submitted an 1115 waiver to transition their traditional Medicaid expansion into premium assistance in the marketplace for 2015. Read New Hampshire’s proposal here.

INDIANA: Indiana received a one year extension of their current waiver, which means their pending 1115 waiver to expand Medicaid is still being negotiated.

ARIZONA: Arizona has submitted an amendment to their Medicaid expansion 1115 waiver which would impose premiums and increase co-pays. Read Arizona’s 1115 amendment here.

In addition a handful of states have recently released Medicaid expansion proposals. A great deal of debate in these states is expected before waiver applications land at the Centers for Medicare and Medicaid Services (CMS). However, if successful, the poorest populations in another five states could gain Medicaid coverage.

FLORIDA: Florida is considering a premium assistance approach named “A Healthy Florida Works” which includes premiums, healthy behavior incentives, and job-seeking/training requirements.

UTAH: Utah is debating a premium assistance model which would include employer sponsored coverage or a plan on the marketplace. The Utah approach includes co-pays, job-search/training, and healthy behavior incentives. Read more about details about the Healthy Utah plan here.

WYOMING: Governor Mead voiced support for the Wyoming Health Department’s version of Medicaid expansion called the Strategy for Health, Access, Responsibility, and Employment (SHARE) program which would utilize current providers for a benchmark benefit package and also include premiums and co-pays, healthy behavior incentives, and employment assistance. Access Wyoming’s plan here, and read more about it in the Washington Posts’ article, “Wyoming’s Republican Governor Will Push to Expand Medicaid,”, Georgetown University Health Policy Institute’s blog, “Wyoming Medicaid Waiver Could Pass Muster with CMS”, or Families USA’s report, “Top 9 Occupations of Working but Uninsured in Wyoming Who Would Benefit from Expanding Health Coverage” and corresponding infographic.

MONTANA: Montana, like Wyoming, is considering an approach to utilize current providers for a benchmark benefit package. More details will be released soon.

TENNESSEE: Tennessee announced their plan to seek an 1115 waiver to expand Medicaid. Details include the choice of premium assistance or employer-sponsored coverage, premiums, co-pays, and healthy behavior incentives.

Additionally, Families USA has updated two Medicaid expansion resources—including an updated map showing where states stand on Medicaid expansion and an updated page on state Medicaid expansion waivers.