Welcome to DZA’s latest Medicare newsletter, where we bring you the important updates affecting rural health clinics (RHCs) and federally qualified health clinics (FQHCs) for the upcoming year! This edition serves as a reminder for changes finalized in the 2025 Medicare physician fee schedule (MPFS) final rules.
To read about a specific topic in this article, use the following links:
- Hepatitis B Vaccines
- Preventative Vaccines Billing
- Productivity Standards
- Primarily, Primary Care
- RHC Lab Services
Hepatitis B Vaccines
Hepatitis B vaccines were added to the list of preventative vaccines and will be paid at the reasonable cost in RHCs and FQHCs. Since this vaccine will no longer be included in their respective RHC or FQHC rates beginning on January 1, 2025, these vaccines are not be separately billed as they have in the past.
This means clinics are to treat them like other preventative vaccines (this includes pneumococcal, influenza, and COVID-19 vaccines) and hepatitis B vaccines are to be included on the Medicare vaccine log for the cost report.
But wait—there’s more regarding vaccines and it’s a big deal…
Preventive Vaccines Billing
Beginning on July 1, 2025, RHCs and FQHCs can bill preventive vaccines and the administrative costs at the time of service.
The RHC statute mandates that preventative vaccines (pneumococcal, influenza, COVID-19, and hepatitis B), along with their administration for Medicare patients, be reimbursed at 100% of reasonable costs, rather than the 80% limit applied to other services. Currently, these vaccines are not billed to Medicare and payments are reimbursed through the cost report (except for hepatitis B, prior to January 1, 2025).
This is a big change in vaccine billing—let your billers know and possibly reach out to your software vendors for potential updates or changes.
CMS issued an MLN Matters Article and Change Request (CR) with updated guidance for clinics and instructions to Medicare Administrative Contractors (MACs). The main takeaways are:Vaccines and their administration must be billed on a UB-04 using bill types 71X or 77X.
The MLN article and CR, both titled “Payment for Medicare Part B preventive vaccines & their Administration for RHCs & FQHCs,” can be found here: MLN 13923 and Change Request 13923.
Since these preventative vaccines will continue to be reimbursed at 100% costs, payments for these services received at the time of service will need to be annually reconciled on the cost report to receive full vaccine and administrative costs. (Sorry, not sorry–cost report preparers will be asking for the same vaccine data, and now for Hepatitis B, too!)
Does this mean if we don’t bill at the time of service we can claim them on the yearend cost report?
Well, couple of things—CMS uses the word “can” to indicate that RHCs and FQHCs are now allowed to bill for the vaccines and their administration at the time of service, not that they are required to do so. However, CMS expects RHCs and FQHCs to bill promptly at the time of service to trigger interim payment through claims. Finally, the cost report reconciliation is only intended to adjust payments already made—not to create payments that never occurred through billing. If no claim is filed, there’s nothing to reconcile. CMS explicitly stated that the annual reconciliation will ensure payments made match reasonable costs, there was no mention that this reconciliation is intended to create a new payment when no claim was filed.
In other words, as the industry currently surmises, if an RHC/FQHC misses billing for a vaccine service, they lose the opportunity for payment unless they can submit a late claim within timely filing rules. CMS did specifically state that “we plan to release additional guidance implementing these policies in advance of the effective date of July 1, 2025.” At this time CMS has not issued further guidance regarding the vaccine reconciliation process that will be part of the Medicare cost report.
Productivity Standards
RHC productivity standards were set at 4,200 visits per full-time equivalent (FTE) physician and 2,100 visits per FTE nurse practitioner, physician assistant, or certified nurse midwife. The cost report would settle on the larger of actual visits or minimum productivity standards.
CMS eliminated these productivity standards for cost report periods ending after December 31, 2024. In other words, productivity standards will no longer be applicable for 2025 cost reports.
What does this mean for cost reports that are not calendar yearend?
For example, if your cost report ends on June 30, 2025, the productivity standards will not apply for the entire cost report period.
What if our RHC wants to qualify for productivity exemption, since it went away?
CMS clearly stated, “We do not agree with instructing MACs to apply a waiver during final settlement that would eliminate any application of the guidelines as we are striving to have all RHC fiscal year ends for this change be handled consistently.” This would apply to older cost reports that have not been finalized yet (that is, without a Notice of Program Reimbursement). In other words, CMS will not accept this as a reason to be exempted from the productivity standards in older cost reports. Instead, the previous guidelines for requesting and receiving an exemption from the MAC would continue to apply.
Primarily, Primary Care
Federal rules state that RHCs are to be primarily engaged in “providing outpatient health services.” However, state survey guidance states, “RHCs may not be primarily engaged in specialized services” and stipulate “primarily engaged” is determined if more than 50% of total RHC hours is providing primary care services.
Since this caused quite the conundrum for RHCs wanting to provide more specialized services (which are technically “outpatient” services), CMS finalized the following: beginning January 1, 2025, RHCs will no longer be surveyed to a requirement that they provide more than 50% of operating hours as primary care services.
RHC Lab Services
Beginning in 2025, hemoglobin and hematocrit testing will no longer be a required lab service for RHCs. Additionally, CMS removed the requirement that RHCs directly provide “examination of stool specimens for occult blood.”
Closing
With the removal of the RHC 50% primary care requirement and the elimination of the productivity standard, now is a great time to step back and evaluate the mix of specialties and providers within your RHC—and to explore other cost report strategies in collaboration with your cost report preparer.
If you have any questions or need further assistance, please contact us or reach out to a DZA reimbursement consultant today.
Tristi Cohelan
Principal
