OAR 410-147-0360: Encounter Rate Determination

(1) The Division of Medical Assistance Programs (Division) will coincide enrollment of a Federally Qualified Health Center (FQHC) or Rural Health Clinic (RHC) with the calculation of a clinic’s Prospective Payment System (PPS) encounter rate: (a) DMAP will enroll a clinic as an FQHC or RHC effective the date DMAP determines the clinic’s PPS encounter rate. The encounter rate may be used to bill for services provided on or after the coinciding effective dates of enrollment as an FQHC or RHC with the Division and determination of the clinic’s encounter rate. (b) Consistent with OAR 410-120-1260, Provider Enrollment, only enrolled providers can submit claims to the Division for providing specific care, item(s), or service(s) to Division clients. A clinic or individual provider needs to bill fee-for-service for services provided prior to enrollment as an FQHC or RHC with DMAP, according to applicable service program’s enrollment and billing Oregon Administrative Rules (OARs). (2) To determine the PPS encounter rate(s), an FQHC must submit all financial documents listed in OAR 410-147-0320 for each Medical, Dental and Mental Health/Substance Use Disorder Services. (a) Effective October 1, 2004, for FQHCs only, the Division will calculate three separate PPS encounter rates for clinics newly enrolling as an FQHC with the Division: (i) Medical; (ii) Dental; and (iii) Mental Health/Substance Use Disorder services. (b) FQHCs enrolled with the Division prior to October 1, 2004, with a single PPS medical encounter rate, will have a separate encounter rate calculated if the clinic adds a service category listed in either Section (2)(a)(ii) or (iii) of this rule. Refer also to Section (16) of this rule. (3) To determine the PPS encounter rate, a RHC must submit all financial documents listed in OAR 410-147-0320. (a) The Division will accept an uncertified Medicare Cost Report; (b) If the clinic’s Medicare Cost Report, provided to the Division, does not include all covered Medicaid costs provided by the clinic, the clinic must submit additional cost information. The Division will include these costs when determining the PPS encounter rate. (c) The Division will remove the Medicare productivity screen and any other Medicare payment caps from the RHC’s Medicare encounter rate; (d) An RHC can submit the Division cost statement form 3027 as a substitute to the Medicare Cost Report. (4) FQHCs or RHCs that have an additional clinic site(s) under the main FQHC or RHC designation, must file the required financial documentation for each clinic site unless specifically exempted in writing by the Division. If exempted from this requirement by the Division, an FQHC or RHC may file a consolidated cost report. See OAR 410-147-0340 regarding separate enrollment for multiple sites. (5) FQHCs and RHCs cannot include costs associated with non-FQHC or non-RHC designated sites in the cost report. (6) FQHCs and RHCs cannot include costs associated with non-covered Medicaid services. The Division does not allow the inclusion of indirect or direct costs for non-covered Medicaid services in the clinic’s cost report/statement as allowed expenses. Refer to OAR 410-120-1200 Excluded Services and Limitations. (7) An out-of-state FQHC or RHC will only include expenses associated with Medicaid covered services provided at clinic sites serving Division clients when completing the Cost Statement (DMAP 3027). For RHCs only, the Medicare Cost Report can only include financial documents for Medicaid-covered services provided at clinic sites that see Division clients. Do not include costs associated with non-FQHC or RHC designated sites, or clinic sites that do not serve Division clients in the Cost Statements (DMAP 3027) or Medicare Cost Reports for RHCs. (8) At any time, if the Division determines that the costs provided by the clinic for calculating the PPS encounter rate(s) were inflated, the Division may: (a) Request corrected cost reports and any other financial documents in order to review and adjust the encounter rate(s); and (b) Impose sanctions as defined in OARs 410-120-1400 Provider Sanctions, 410-120-1460 Type and Conditions of Sanctions; and 943-120-0360 Consequences of Non-Compliance and Provider Sanctions. (9) Effective January 1, 2001, DMAP determines FQHC and RHC encounter rates in compliance with 42 USC 1396a(bb). In general, the PPS encounter rate is calculated by dividing total costs of Medicaid covered services furnished by the FQHC/RHC during fiscal years 1999 and 2000 by the total number of clinic encounters during the two fiscal years. (10) Clinics existing in 1999 and 2000, and enrolled with the Division as a FQHC or RHC as of January 1, 2001, receive payment from the Division for services rendered to Medicaid-eligible OHP clients per an all-inclusive PPS encounter rate (calculated on a per visit basis) that is equal to 100 percent of the average of the costs of the clinic for furnishing such services during fiscal years 1999 and 2000 which are reasonable and related to the cost of furnishing such services, or based on such other tests of reasonableness. (11) Clinics first qualifying as an FQHC or RHC after fiscal year 2000, will receive payment from the Division for services rendered to Medicaid-eligible OHP clients per an all-inclusive PPS encounter rate (calculated on a per visit basis) that is equal to 100 percent of the average of the costs of the clinic for furnishing such services during the fiscal year the clinic first qualifies as an FQHC or RHC. Coinciding with enrollment as an FQHC or RHC with the Division, a clinic will have a PPS encounter rate: (a) Established by reference to payments to other clinics located in the same or adjacent areas, and of similar caseload; or (b) In the absence of such clinic, through cost reporting methods based on tests of reasonableness. (12) Beginning in fiscal year 2002, and for each fiscal year thereafter, each FQHC/RHC is entitled to the PPS encounter rate(s) payment amount to which the clinic was entitled under Section 42 USC 1396a(bb) in the previous fiscal year, increased by the percentage increase in the Medicare Economic Index (MEI). (13) For established, enrolled clinics with a change of ownership, the new owner can submit: (a) A Cost Statement (DMAP 3027) or Medicare Cost Report within 30 days from the date of change of ownership for review by the Division to determine if a new PPS encounter rate will be calculated as otherwise described in this rule; or (b) In writing, a letter advising adoption of the PPS encounter rate calculated under the former ownership, including notice if there is a change to the clinic’s tax identification number; (c) Failure to submit a cost statement (DMAP 3027) or Medicare Cost Report within 30 days of the change of ownership, will forfeit the opportunity for calculation of a PPS encounter rate(s) at a later date. The PPS encounter rate(s) calculated under the former ownership will be reassigned to the new ownership. (14) The Centers for Medicare and Medicaid Services (CMS) defines a change in scope of services as one that affects the type, intensity, duration, and amount of services. Clinics must submit a request for change in scope to the Division for review. (15) The Division may establish a separate PPS encounter rate if a FQHC adds Dental or Mental Health/Substance Use Disorder services. A separate PPS encounter rate will be calculated by the Division for the added service element if: (a) Costs associated with the added service element were not included on the original cost statements for the initial PPS encounter rate determination; (b) The addition of the service element has been approved by the Health Resources and Services Administration (HRSA) and is included in the notice of grant award issued by HRSA; (c) The FQHC is certified by the Addictions and Mental Health Division (AMH) to provide mental health services (if mental health services are provided by un-licensed providers), or has a letter or licensure of approval by Addictions and Mental Health Division (AMH) former Office of Mental Health and Addictions Services (OMHAS) to provide substance use disorder services; (i) Certification by AMH of an FQHC’s outpatient mental health program is required if mental health services are provided by non-licensed providers. Refer to OAR 410-147-0320(3)(i) and (5)(h) for certification requirements (iii) A letter of licensure or approval by AMH is required for FQHCs providing substance use disorder services. Refer to OAR 410-147-0320 (3)(j) and (5)(i); (16) If an FQHC meets the criteria as outlined in Section (15) of this rule for the addition of Dental or Mental Health/Substance Use Disorder services, after the initial encounter rate determination, the Division will determine the PPS encounter rate for the newly added service element using the date the scope change was approved by HRSA. For example: the clinic submitted 1999 & 2000 cost reports. In 2001 the clinic added a dental clinic. The cost report would be from 2001 (the most appropriate months) with the MEI adjusted for 2002, 2003 and 2004. (17) When an FQHC shares the same space for multiple services, then the Division will use square footage to determine the percent of the indirect cost associated with each encounter rate. (18) A clinic may be exempt from this requirement if an FQHC has minimal utilization for a particular service such as “Look Alike” clinics and is located in an isolated area. Submit an exemption request with appropriate documentation to the Division FQHC Program Manager for consideration. (19) For an FQHC approved by the Division to participate in an Alternate Payment Methodology (APM) pilot, the following will apply: (a) APM converts the clinics current PPS rate into an equivalent per member per month (PMPM) rate using the clinic’s historical patient utilization and the clinic’s PPS cost base rate. The purpose of APM is to reimburse clinics an amount no less than what the clinic would have received if paid with PPS. The Division shall process quarterly reconciliations and if the APM issued is less than what the clinic would have received if paid using PPS, the Division shall reimburse the clinic the difference. The Division will perform a final annual reconciliation and remit payment within 120 days after the close of the calendar year. (b) The Division shall have a memorandum of understanding to establish an effective date with each participating clinic. (c) A clinic may request to return to its PPS rate by submitting written request to the Division. The Division shall return the clinic to their PPS rate within 30 business days after a clinics request has been received.