Sec. 10.09.08.08. Reimbursement Methodology for FQHC Services

A. Federally qualified health centers shall be reimbursed for covered services once the provider is in compliance with all federal and State requirements.

B. The only well-child visits that are eligible for Program reimbursement are those that are billed as EPSDT screens.

C. Payment of Allowable Costs.

(1) Federally qualified health centers shall be paid 100 percent of the FQHC’s allowable costs, subject to the limitations contained in §§D-G of this regulation, that are related to the provision of covered services.

(2) Allowable costs will be determined in accordance with Medicare principles of cost reimbursement as contained in 42 CFR 413.5, unless otherwise specified in this chapter.

(3) Providers' allowable costs are subject to audit and verification by the Department or its designee.

(4) Costs not adequately documented, return on equity, bad debts incurred by private pay, Medicare patients, or third-party payers, and bad debts resulting from denied costs of the Program are not allowable in establishing reimbursement rates.

(5) Services covered under §1915(g) of Title XIX of the Social Security Act, which are called targeted case management services, and the costs associated with these services, are excluded when establishing reimbursement rates.

D. All-Inclusive Cost-per-Visit Rate.

(1) Reimbursement to providers of federally qualified health center services shall be on a per-visit basis. The Department or its designee shall establish an all-inclusive interim and an all-inclusive final cost-per-visit rate for each provider.

(2) Each provider shall have a rate established for primary care services. A rate for dental care services shall be established if the service is offered.

(3) The all-inclusive cost-per-visit rate for primary care visits covers the allowable costs associated with covered primary care, mental health, and substance abuse services. FQHCs may not charge the program, other than an all-inclusive cost-per-visit rate, for any ambulatory service.

(4) The all-inclusive cost-per-visit rate for dental care visits covers only those services that are reimbursed by the Program under COMAR 10.09.05. Other dental services are not reimbursable.

(5) Providers' costs, except for those of OB/GYN physicians, for staff who provide radiology services, for off-site visits, and for out-stationed eligibility workers, are divided into the following four cost centers:

(a) General service cost center is composed of those costs associated with the depreciation of the facility's building or buildings and equipment, the operation of the plant, the administration and management of the facility, medical records, and those administrative costs associated with pharmacy and EPSDT services which are not reimbursed under a different payment methodology;

(b) Primary care services costs are composed of those costs, including supplies, associated with health care staff, including laboratory technicians, who provide direct care to patients;

(c) Dental services costs are the costs of supplies and health care staff associated with the provision of dental services to patients; and

(d) Non-reimbursable costs are those costs that are not reimbursable under this payment methodology.

(6) The interim and final cost-per-visit rates for each service shall be determined by dividing the provider's allowable costs for each service by the total number of visits to the provider for each service.

E. Calculation of the Interim All-Inclusive Cost-per-Visit Rate.

(1) An interim all-inclusive cost-per-visit rate shall be established for the first 2 years of operation.

(2) Providers shall be divided into those located in urban areas and those located in rural areas. Baltimore City and the Maryland counties of Allegany, Anne Arundel, Baltimore, Carroll, Cecil, Charles, Harford, Howard, Montgomery, Prince George's, St. Mary’s and Wicomico are urban areas.

(3) All other Maryland counties are rural areas.

(4) Providers located out-of-State shall be placed in the same reimbursement class as that of the nearest Maryland county.

(5) An interim all-inclusive cost-per-visit rate shall be established for primary care and for dental care services, if applicable, for each provider, by averaging the current FQHC all-inclusive cost-per-visit rate amounts for each area, urban or rural.

F. Calculation of the Final All-Inclusive Cost-per-Visit Rate.

(1) Following the close of the provider's 2nd fiscal year, the Department or its designee shall determine the final all-inclusive cost-per-visit rate for primary care services and, if offered, for dental care services, for those fiscal years based on the costs stated in the cost report for the 2 fiscal years and subject to the limitations in these regulations.

(2) The provider shall submit to the Department or the Department's designee, on the form prescribed, direct and indirect costs and statistical data applicable to patient care.

(3) The provider's cost report shall be reviewed in accordance with the standards referenced in §C(1) of this regulation to determine the allowable costs and the number of visits for that cost reporting period.

(4) In calculating the final all-inclusive cost-per-visit rates, the limitation on general service cost center costs described in §D(5)(a) of this regulation shall apply.

(5) Once the all-inclusive cost-per-visit rate has been determined for each fiscal year, each provider is eligible for additional primary care reimbursement for services rendered by OB/GYN physicians, staff who provide radiology services, off-site visits, and out-stationed eligibility workers. Costs for these additional services are limited to salaries and fringe benefits, including any malpractice insurance, that are paid by the provider. The additional primary care reimbursement shall be calculated by taking the sum of the provider's expenditures for OB/GYN physicians, for staff who provide radiology services, out-stationed eligibility workers, and off-site visits. This sum is divided by the total number of primary care visits. The resulting rate shall be added to the all-inclusive cost-per-visit rate.

(6) The final all-inclusive cost-per-visit rate shall be determined by averaging the all-inclusive cost-per-visit rates for the 2 fiscal years and by adding, if applicable, the additional rate for OB/GYN, staff who provide radiology services, or off-site visits.

(7) This final all-inclusive cost-per-visit rate shall be implemented retroactively to the start date of the FQHC’s operation.

(8) The final all-inclusive rate shall be increased by the Medicare Economic Index (MEI) each calendar year.

(9) The provider shall maintain adequate financial records and statistical data according to generally accepted accounting principles and procedures.

(10) The provider shall keep all records available for a period of 6 years subject to inspection or audit by the Department or the Department's designee at any reasonable time during normal business hours.

G. Cost Reporting.

(1) A provider shall submit to the Department or the Department's designee a cost report, and other financial and statistical information requested, within 3 months after the close of the provider's 2nd fiscal year, unless the Department grants the provider an extension or the provider discontinues participation as a federally qualified health center. The following apply:

(a) The Program may grant a provider an extension if the provider makes a written request setting forth the specific reasons for the request and the Department determines that the request is reasonable; or

(b) If a provider discontinues participation as a federally qualified health center, it shall submit its cost report and other financial and statistical data to the Department within 45 days after the effective date of termination.

(2) Cost reports are considered to have been received by the Department or the Department's designee when the submitted reports are completed according to the instructions issued by the Department, or the Department's designee.

(3) If a provider's cost report has not been received within 3 months after the close of the provider's 2nd fiscal year or within the deadline set by the Department after an extension has been granted, the Department shall reduce the provider's current interim all-inclusive cost-per-visit rate by 20 percent for visits paid during the calendar month in which the report is due and any subsequent calendar month until the report has been submitted. This amount shall be eligible for repayment to the provider upon final cost settlement for the fiscal year or fiscal years from which the payments were withheld.

(4) When a provider's cost report is received by the last day of the 6th month after the end of the provider's 2nd fiscal year and the Department or the Department's designee determines that the final all-inclusive cost-per-visit rate is different than the interim all-inclusive cost-per-visit rate, the increase or decrease is applicable to all reimbursable visits retroactively.

(5) The Department or its designee shall notify each provider of the results of the verification of the provider's cost report.

(6) The provider may appeal the final cost settlement by following the procedures described in COMAR 10.09.36.09.

H. Calculation and Reimbursement of Number of Visits for FQHC Services Rendered to MCO Enrollees.

(1) The FQHC shall transmit all of the encounter data to the appropriate MCO.

(2) The MCO shall reimburse the FQHC their established all-inclusive cost-per-visit rate for all eligible visits.

(3) The FQHC shall have the responsibility of reconciling the number of eligible visits with the MCOs.

(4) Each MCO shall transmit all of its FQHC encounter visits to the Department.

(5) For an FQHC, the calculation of the number of MCO enrollee visits is as follows:

(a) For each 6-month period thereafter, the number of eligible visits received for each period shall be totaled by the Department 12 months after the end of the period;

(b) The number of visits reported in §H(5)(a) of this regulation shall constitute the number of visits on which final payments shall be made to each MCO as reported by each FQHC for that 6-month period;

(c) The MCO shall receive an interim supplemental payment once every 3 months (quarterly);

(d) The interim supplemental payment shall be modified by a final reconciliation of the number of eligible visits applicable to a previous 6-month period received by the Department within 1 year from the end of the 6-month period; and

(e) The final payment made to each MCO according to this regulation is not subject to cost settlement.