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What are rural health clinics (RHCs)?

A Rural Health Clinic is a federally qualified health clinic certified to receive special Medicare and Medicaid reimbursement. CMS provides advantageous reimbursement as a strategy to increase rural Medicare and Medicaid patients' access to primary care services. RHCs must meet certain conditions to qualify for this reimbursement, as stipulated by Section 330 of the Public Health Service Act. The Centers for Medicare and Medicaid Services (CMS) reimburses RHCs differently than it does other facilities. The 2000 Benefits Improvement and Protective Act (BIPA) required CMS to pay RHCs using a prospective payment system (PPS) rather than via a cost-based reimbursement system. RHCs receive an interim payment from Medicare, and at the end of the year, this payment is reconciled using the clinic's cost reporting. For services provided to Medicaid patients, States can reimburse using PPS or by an alternative payment methodology that results in a payment equal to what the RHC would receive under PPS. In addition, regardless of whether the patient sees a mid-level provider or a physician, the RHC must receive the same amount for its services.

RHCs are required to be staffed by a team that includes one mid-level provider, such as a nurse practitioner (NP), physician assistant (PA), or certified nurse midwife (CNM), that must be on-site to see patients at least 50 percent of the time the clinic is open, and a physician (MD or DO) to supervise the mid-level practitioner in a manner consistent with state and federal law.  While federally qualified health centers (FQHCs) provide dental, mental health, substance abuse, and transportation services, RHCs are only required to provide outpatient primary care services and basic laboratory services.  RHCs must be located within non-urban rural areas that have health care shortage designations.

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