Rural Health Clinics (RHC) and Federally Qualified Health Centers (FQHC)

In accordance with Section 702 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act (BIPA) of 2000, effective January 1, 2001, reimbursement is provided for "core" services and other ambulatory services as listed in Appendix G at a PPS per encounter visit. Each RHC`s per visit is based on its reasonable cost of providing Georgia Medicaid-covered services including other ambulatory services costs during FY 1999 and FY 2000. This baseline rate, effective January 2001, is utilized as the basis for rates in succeeding years. Annually, each RHC's per-visit rate is calculated by adjusting the prior year's rate by the Medical Economic Index (MEI). MEI is announced in Recurring Update Notifications (RUNs) issued by Centers for Medicare and Medicaid Services (CMS) in November or December each year.

The baseline rates effective January 1, 2001, will be adjusted by the Medicare Economic Index (MEI), effective for dates of service on and after October 1, 2001, based on the MEI and for changes in the RHC's scope of services during January 1, 2001, through September 30, 2001. For Federal Fiscal Year (FFY) 2002 and FFYs thereafter, the per-visit rate will be calculated by adjusting the previous year's rate by the MEI for primary care, and for changes in the RHC's scope of services during the prior FFY.

For newly qualified RHCs and FQHCs that participate in FY 2000 only, the department will use the FY 2000 cost for calculating the baseline PPS rate effective January 1, 2001. Clinics that qualify after the fiscal year 2000 will have their initial rates established by a statewide average for similar centers. After the initial year, payment will be set using the MEI and change of scope methods used for other clinics.

FQHCs and RHCs that qualify after the fiscal year 2000 will have their initial rates established by a statewide average of similar clinics. After the initial year, payment will be set using the MEI and change of scope methods used for other clinics.

Rural Health Clinics

Rural Health Clinics (RHCs) was established by the Rural Health Clinic Services Act of 1977 to address an inadequate supply of physicians serving Medicare beneficiaries in underserved rural areas and to increase the utilization of nurse practitioners (NP) and physician assistants (PA) in these areas.  RHCs have been eligible to participate in the Medicare program since March 1, 1978, and are paid an all-inclusive rate (PPS) per visit for qualified primary and preventive health services.

RHCs are defined in section 1861 (aa) (2) of the Social Security Act (the Act) as facilities that are engaged primarily in providing services that are typically furnished in an outpatient clinic.  RHC services are defined as:

  • Physician services;
  • Services and supplies furnished incident to physician's services;
  • NP, PA, certified nurse-midwife (CNM), clinical psychologist (CP), and clinical social worker (CSW) services; and
  • Services and supplies furnished incident to an NP, PA, CNM, CP, or CSW services.

RHCs can be either independent or provider-based.  Independent RHCs are stand-alone or freestanding clinics and submit claims to a Medicare Administrative Contractor (MAC).  They are assigned a CMS Certification Number (CCN) in the range 3800-3974 or 8900-8999.  They are assigned a Georgia Medicaid Category of Service of 541 and 542.

Location of Clinic

To be eligible for certification as a RHC, a clinic must be located in a non-urbanized area, as determined by the U.S. Census Bureau, and in an area designated or certified within the previous four years by the Secretary, Health and Human Services (HHS), in any one of the four types of shortage area designations that are accepted for RHC certification.

In addition to location requirements, an RHC must:

  • Employ an NP or PA;
  • Have an NP, PA, or CNM working at the clinic at least 50% of the time the clinic is operating as an RHC;
  • Directly furnish routine diagnostic and laboratory services;
  • Have arrangements with one or more hospitals to furnish medically necessary services that are not available at the RHC;
  • Have available drugs and biologicals necessary for the treatment of emergencies;
  • Meet all health and safety requirements;
  • Not be a rehabilitation agency or a facility that is primarily for mental health treatment;
  • Furnished onsite all of the following six laboratory test:       
      • Chemical examination of urine by stick or tablet method or both;
      • Hemoglobin or hematocrit:
      • Blood sugar;
      • Examination of stool specimens for occult blood;
      • Pregnancy test; and
      • Primary culturing for transmittal to a certified laboratory.
  • Not be concurrently approved as an FQHC, and
  • Meet other applicable State and Federal requirements.

The physician providing medical direction may be the owner of the RHC, an employee of the clinic or under agreement with the clinic to carry out the physician responsibilities located at 42 CFR 491.8(a) (6) (b).

Federally Qualified Health Centers

Federally Qualified Health Centers (FQHCs) were established in 1990 by section 4161 of the Omnibus Budget Reconciliation Act of 1990 and were effective beginning on October 1, 1991. As with RHCs, they are also facilities that are primarily engaged in providing services that are typically furnished in an outpatient clinic and are paid a PPS for qualified primary and preventive health services.

FQHC services are defined as:

  • Physician services;
  • Services and supplies furnished incident to a physician's services;
  • NP, PA, CNM, CP, and CSW services;
  • Services and supplies furnished incident to an NP, PA, CNM, CP, or CSW services; and
  • Outpatient diabetes self-management training and medical nutrition therapy for beneficiaries with diabetes or renal disease.

The statutory requirements that FQHCs must meet are located in section 1861 (aa) (4) of the Act.  An entity that qualifies as an FQHC is assigned a CCN in the range 1800-1989, and 1000-1199. They are assigned a Georgia Medicaid Category of Service of 540.

FQHC services also include certain preventive primary health services. The law defines Medicare-covered preventive services provided by an FQHC as the preventive primary health services that an FQHC is required to provide under section 330 of the Public Health Service (PHS) Act.

NOTE: Information in this chapter applies to FQHCs that are Health Center Program Grantees and Health Center Program Look-Alikes.  It does not necessarily apply to tribal or urban Indian FQHCs. 

An FQHC must:

  • Provide comprehensive services and have an ongoing quality assurance program;
  • Meet other health and safety requirements;
  • Not be concurrently approved as an RHC; and
  • Meet all requirements contained in section 330 of the Public Health Service Act.
    • Serve a designated Medically-Underserved Area (MUA) or Medically Underserved Population (MUP);
    • Offer a sliding fee scale to persons with incomes below 200% of the federal poverty level; and
    • Be governed by a board of directors, of whom a majority of the members receive their care at the FQHC.

FQHC Location Requirements

FQHCs may be located in rural or urban areas.  FQHCs that are Health Center Program Grantees or Look-Alikes must be located in or serve people from an HRSA-designed MUA or MUP.

Change in Scope of Services

A change in scope of services for an FQHC and RHC is defined as a change in the type, intensity, duration and/or amount of services. It is the clinic's responsibility to recognize any changes in their scope of services and to notify the department of those changes and to provide the department with documentation and projections of the cost and volume impact of the change.

Current State Average Rates Effective 10/1/2019 – 9/30/2020 (for new enrollments)

FQHC – MEI      1.9%     -      $118.30

HB-RHC – MEI     1.5%     -     $82.05

FS-RHC – MEI     1.5%     -     $79.07

CAH-RHC – MEI    1.5%     -     $82.05