RHC Payment Change and Sequestration Delay

Beginning on April 1st the Rural Health Clinic (RHC) per visit upper payment limit increased from $87.52 to $100. The increased upper payment limit is a direct result of the payment changes included in Section 130 of the Consolidated Appropriations Act of 2021. Some Medicare Administrative Contractors have already sent out letters to RHCs informing them of the increased upper limit and how it will affect their All-Inclusive Rate payments.

Meanwhile, on Capitol Hill, the House is expected to pass legislation after they return from recess (April 12th) that includes a grandfathering fix for RHCs and delays the resumption of a 2% Medicare sequestration cut until the end of 2021 that affects all providers.  The likely vehicle to do this is H.R> 1868.

While H.R. 1868 is not yet law, the expectation that this bill will pass is so strong that CMS announced that they will temporarily hold claims with dates of service on or after April 1, 2021, pending Congressional Action. This includes RHC claims that would have otherwise been subject to the 2% sequester reduction.

For context, when COVID-19 began last year, Congress temporarily waived the standing 2% across-the-board reduction in Medicare reimbursement (the sequester) until the end of 2020, and then later through March 31, 2021. H.R. 1868 will now extend this waiver through the end of 2021.

Specifically, section 2 of the Senate-passed version of H.R. 1868 contains the RHC grandfathering fix which will:

– Fix the grandfathering date for under 50-bed hospital RHCs from December 31, 2019, to December 31, 2020;

– Allow under 50-bed hospital entities that submitted applications to become an RHC by December 31, 2020, to be grandfathered-in; and

– Establish a methodology for setting the upper payment limits for grandfathered RHCs that did not have reimbursement in 2020.

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