Approved by CMS and effective July 1, 2014, Kentucky’s Medicaid Program may now pay certain Rural Health Clinics (“RHC”), Federally Qualified Health Care Centers (“FQHC”) and Look-a-Likes a higher rate. The Department of Medicaid Services (“Medicaid”) sought approval to pay RHCs, FQHCs and Look-A-Likes that have a low per visit PPS rate at a rate equal to 125% of the Medicare rate.  This means that Kentucky RHCs, FQHCs and Look-A-Likes with low Medicaid rates, just got a raise– that is if they claim it! While the Medicaid State Health Plan Amendment provides that an “Alternative Payment Methodology” is now available, this really means that clinics with low rates can ask to be paid at a higher rate per visit without qualifying for a change in scope of service.   This increase in rate is supposed to be effective on July 1, 2014, but is based upon the Medicare Upper Payment Limit for RHCs as of September 30, 2014 and the rate as we calculate it is approximately $99.70. Essentially, this means that providers with rates below the $99.70 threshold may elect to be paid under the alternative payment methodology.

Interestingly, the same State Plan Amendment also made it more difficult for these providers to pursue an increase in its by claiming a change in scope of services that would justify re-calculation of the PPS rate. This Amendment makes clear that a change in hours, a change in location, or a renovation or new capital expense will not qualify as a change in scope of service and increase in the rate; only the addition of a covered service or increase in intensity of service will qualify for a change in scope of services.

Medicaid has yet to issue any guidance about how to claim this increase and/or elect the alternative payment methodology, but is required to make the increase effective commencing July 1, 2014. This increase in rate, If properly claimed, will also increase the amount of supplemental or wrap payment that a RHC, FQHC, or Look-A-Like must be paid. Providers should carefully watch the amounts that are paid as supplemental/wrap payments by Medicaid and assure that they are paid the amounts that they are entitled to.   My suggestion is to claim this alternative payment methodology as quickly as possible. This will bring much needed financial relief to many underpaid providers that struggle to provide safety net services in underserved areas.