Recently, Congress passed the Covid relief bill which contained language affecting the Medicare cap on RHCs. Beginning April 1, 2021, the cap is being raised to $100.00 (then adding another $13.00 each year through 2028) when the cap will be at $190.00 per visit, then increased by the Medicare Economic Index (MEI) each year. As part of this, all newly established RHCs would now also be subject to this increased cap, which means that no new RHC (even those purchased or established by hospitals with less than 50 beds) could receive uncapped cost-based reimbursement. This will be a significant change for RHCs.
ATTN: Provider Based RHCs (less than 50 beds – uncapped RHCs)
Uncapped RHCs in "existence today" would be grandfathered-in at their current All-Inclusive Rate and would still see year-over-year increases, but would be constrained to their current AIR plus an adjustment for MEI (the Medicare Economic Index). "Existence today" currently means RHCs certified 12/31/2019 and prior for the grandfathering of the uncapped rate. However, there was a misprint in the legislation and it should have been written as 12/31/2020. This is currently being reviewed for an update to the correct date, as well as a possible extension of this date to 3/31/2021. However, we do not expect that a future date will be granted past 12/31/2020 for "in process" clinics to become RHCs, but it is unknown at this time.
ATTN: Independent RHCs and Provider Based RHCs (greater than 50 beds) – capped RHCs)
The Medicare capped rate you have been experiencing of $86.31 in 2020 and recently with the MEI increase, $87.52 in 2021 is going to increase dramatically effective 4/1/2021 and then increase dramatically each year until 2028. Independent RHCs and Provider Based RHCs greater than 50 beds that have been capped at a lower RHC rate for so many years, will now be paid the lower of their annual calculated cost per visit or the new increased Medicare cap rate each year (see rates below per year). RHCs have been waiting for this for over a decade.
Annually filed cost reports will be even more important to ascertain you are maximizing your cost per visit.
Below is the RHC rate increase for all RHCs types (independent, provider based over 50 bed and provider based under 50 bed) all using the same system for capped cost based reimbursement.
2021 January 1 –March 31 $87.52. On April 1, the cap goes to $100.00 per visit.
2022 $113.00
2023 $126.00
2024 $139.00
2025 $152.00
2026 $165.00
2027 $178.00
2028 $190.00
After 2028 and in subsequent years, the cap goes up by the Medicare Economic Index (MEI)
You can find more information at this link: https://www.narhc.org/News/28696/Rural-Health-Clinic-Modernization-Included-in-Final-COVID-Package
We are happy to answer any questions you have about this.
Chris A. Christoffersen, President, CEO
Health Services Associates, Inc.