CMS rulemaking failure costs taxpayers millions
Facilities designated erroneously as RHCs qualify for enhanced Medicare and Medicaid reimbursement
The Office of Inspector General (OIG) at the U.S. Department of Health and Human Services (HHS) continues to fault the Centers for Medicare & Medicaid Services (CMS) for failing to issue final regulations to enforce the location requirements for rural health clinics (RHCs).
By way of background, facilities can be designated as RHCs and qualify for enhanced Medicare and Medicaid reimbursement if they are: (1) located in rural areas and (2) located in areas that have a shortage of healthcare providers. The Balanced Budget Act of 1997 (BBA) authorizes CMS to terminate the designation of RHCs that no longer meet the location requirements, as long as they are not determined to be "essential provider" RHCs, but CMS has not issued regulations to allow RHCs to apply as essential provider RHCs.
The OIG determined that about 12 percent of RHCs no longer met the location requirements in 2013 (a 56 percent increase since 2003, when the OIG last examined this issue). The Medicare program and its beneficiaries paid approximately $132 million to these RHCs in 2012. The OIG points out that these providers should continue to qualify as RHCs only if they are determined to be essential providers.
In order to ensure that CMS can enforce the BBA provisions relating to RHCs, the OIG recommends that CMS issue regulations to enable RHCs determined to be essential providers to remain certified as RHCs. CMS thanked OIG for “their efforts on this issue,” but declined to commit to issuing regulations.
Read the complete OIG report here.
