CMS Clarifies PQRS Penalties for Physicians at FQHCs and RHCs

We previously reported that providers that bill Medicare Part B for services outside the FQHC service package will be subject to the PQRS penalties, however, last week, CMS put out further clarification on this issue that we wanted to make you aware of.

In a recent MLN Matters article, CMS clarified that the PQRS penalties do not apply to those providers who ONLY provide Medicare Part B services at FQHCs or RHCs.  However, if a provider provides Part B services at an FQHC or RHC and a non-FQHC/RHC setting, the PQRS penalties do apply.

Please note, the Medicare FQHC PPS payment (or all inclusive rate, if your center has not yet transitioned to the PPS) is not billed on the Part B fee schedule.  This would apply only to those services provided outside of the FQHC benefit. 

FAQs from CMS MLN Matters Article

If I furnish professional Medicare Part B services only at an RHC or an FQHC, are the services eligible for PQRS?

No, if you furnish Medicare Part B professional services only at an RHC or an FQHC, such services are not eligible for either the PQRS incentive payment or for the PQRS negative payment adjustment.

I’m an Eligible Professional (EP) and I furnish professional Medicare Part B services at an RHC/FQHC and also furnish services at a non-RHC/FQHC setting. Are the non-RHC/FQHC services eligible for the 2015 PQRS incentive payment or for the PQRS negative payment adjustment?

Yes, for an EP who furnishes professional Medicare Part B services at an RHC/FQHC and also furnishes services at a non-RHC/FQHC setting, the non-RHC/FQHC services may be eligible for the PQRS incentive payment or the negative payment adjustment. The PQRS program applies a negative payment adjustment to practices with EPs, identified on claims by their individual National Provider Identifier (NPI) and Tax Identification Number (TIN), or group practices participating via the Group Practice Reporting Option (GPRO) (referred to as PQRS group practices) who do not satisfactorily report data on quality measures for covered Medicare Physician Fee Schedule services furnished to Medicare Part B Fee-For-Service beneficiaries. A negative payment adjustment may be triggered in future year(s) if an EP furnishes services, but does not report them.

You can read the MLN Matters article here, and NACHC’s previous blog post on this topic here

CMS Publishes Finals Rules for the Federally-facilitated Marketplaces; some Rural Health Clinics to Qualify as Essential Community Providers in 2016

On February 20, 2015, CMS released the finalized 2016 “Letter to Issuers” and final rule on “Benefit and Payment Parameters” establishing requirements for Qualified Health Plans (QHPs) to be sold in Federally-facilitated Marketplaces in 2016. NACHC previously submitted comments on both documents, which address network adequacy and payment rules. Among the issues impacting FQHCs directly, little was changed since initial guidance was proposed late in 2014. Key issues impacting FQHCs are 1) network adequacy, 2) ECP provider type requirements, and 3) payment.

Network Adequacy:
CMS proposes to leave in place for 2016 the same network adequacy processes and standards in place for 2015. Namely, each QHP must attest to “maintaining a network that is sufficient in number and types of providers…to assure that all services will be accessible to enrollees without unreasonable delay.” QHPs will be required to submit detailed provider network data, which CMS will analyze and evaluate (and has the right to request a detailed justification from a plan as to how it will ensure adequate access in particular areas). CMS will also require that QHPs publish their provider directories online throughout the course of the year, updated at least monthly. CMS plans to continually evaluate and issue updated rulemaking in future years.

Essential Community Providers:

In the 2016 Letter to Issuers, CMS also leaves in place current ECP minimum threshold standard of 30 percent. In other words, each plan must contract with at least 30 percent of the available ECPs in each plan’s service area.
Each plan must also offer contracts in “good faith” to at least one ECP in each ECP category. A contract is defined as in good faith if its terms are those that “a willing, similarly-situated, non-ECP provider would accept or has accepted.” The ECP categories include, FQHCs, family planning providers, hospitals, Indian health care providers, Ryan White providers, and a catchall “other” ECP providers category. Starting in 2016, the guidance newly permits some Rural Health Clinics (RHCs) to qualify in this “other” category as Essential Community Providers (ECPs). This allows these RHCs to count towards the requirement that QHPs contract with at least 30 percent of ECPs in their service area. However, the only RHCs that can be counted as ECPs “1) based on attestation, the clinic accepts patients regardless of ability to pay and offers a sliding fee schedule; or is located in a primary care Health Professional Shortage Area (geographic, population, or automatic); and 2) accepts patients regardless of coverage source (i.e., Medicare, Medicaid, CHIP, private health insurance, etc.).”

Most importantly, however, FQHCs remain one of the required ECP “types”— for which all QHPs must contract with at least one provider of each type in each county in the plan’s service area. In other words, QHPs will continue to be required to offer a contract to at least one FQHC in each county regardless of whether they otherwise have a contract with an RHC or other ECP provider.

Payment to FQHCs:

Lastly, the final rule makes no substantial change to the FQHC payment requirements. It reiterates that if an item or service covered by a QHP is provided by an FQHC, the QHP must pay the health center’s Medicaid PPS/APM rate as defined in 1902(bb) of the Social Security Act. It does, however, include a concession that nothing precludes a QHP and FQHC from agreeing upon a different payment rate, so long as such rate is at least equal to that QHPs generally applicable payment rates.

The full-text of the 2016 Letter to Issuers can be found here and the final rule on Benefit and Payment Parameters can be found here.

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