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The Quincy (Ill.) Medical Group is one of the healthcare organizations in a coalition seeking a legislative fix to help rural health clinics gain access to federal incentive payments.
The Quincy (Ill.) Medical Group is one of the healthcare organizations in a coalition seeking a legislative fix to help rural health clinics gain access to federal incentive payments.

A new rural route

Healthcare coalition, lawmakers drive effort to make rural health clinics eligible for federal incentive payments

By Jessica Zigmond
Posted: December 5, 2011 - 12:01 am ET

A small change sought through recently introduced federal legislation could amount to big changes for the nation's rural health clinics.

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After a year of lobbying, a coalition of healthcare providers has moved closer toward its goal of ensuring that America's rural health clinics are not excluded from electronic health-record, electronic-prescribing and quality-reporting incentive payments through the Medicare program.

More than 30 years ago, the Rural Health Clinics Program was established to serve Medicare and Medicaid beneficiaries in underserved rural locations and urge physicians, physician assistants, nurse practitioners and certified nurse midwives to work together to provide primary-care services. Today, the National Association of Rural Health Clinics estimates that more than 3,000 federally certified rural health clinics offer services to more than 7 million people in 47 states.

Despite its large patient population, rural health clinics were not included among those providers that could receive federal incentive payments when “meaningful use” was defined in the American Recovery and Reinvestment Act two years ago, according to Aric Sharp, CEO of the Quincy (Ill.) Medical Group, which has about 100 physicians. Sharp, who was named one of Modern Healthcare's Up & Comers this year, has largely spearheaded the coalition, which started small and currently has 30 member organizations.

“The definition they (Congress) used has been repeated over and over,” Sharp says. “Unfortunately, it left out physicians that practice in rural health clinics. As we visit the Hill and talk to various representatives, that was not their intent at all,” he adds. “They wanted physicians—regardless if they practiced at a rural or urban clinic—to get that incentive.”

Sharp and Dan Boston, executive vice president at Health Policy Source, a Washington-based consulting firm, contend that the exclusion of rural health clinics is an administrative problem that requires nothing more than a technical correction.

“Aric approached us on making sure that things were corrected on meaningful use,” says Boston, who has worked on expanding the coalition and leading its lobbying efforts on Capitol Hill. “But when we did our own due diligence, we basically found the same problems in e-prescribing and PQRS (Physician Quality Reporting System).”

The technical correction relates to how providers at these facilities bill for services. According to the National Rural Health Association, the CMS requires rural health clinics to submit Medicare claims using Part A forms (specifically UB-04 forms), even though practitioners at these facilities provide care that falls predominantly under Medicare Part B. Other providers submit their data on a Part B form, or the HCFA-1500.

“The definition of the physician fee schedule is used on the HCFA-1500, so the UB-04 falls out of that,” Sharp says. “As we started this whole initiative, every time we talked to someone on the Hill, or anyone involved, they were surprised to find the rural health clinics left out of that definition.”

In October, Quincy Medical Group signed a letter of intent to become an affiliate of the Iowa Health System. Sharp says he anticipates the deal will be completed around the end of this year. After the arrangement, Quincy will remain physician-owned and the physicians' employment agreements will not change, so it won't have an effect on the legislation that Sharp and the coalition want to see become law.

In the past year, the coalition expanded and lobbied federal lawmakers to draft legislation that would solve the problem. A week before Thanksgiving, Rep. Aaron Schock (R-Ill.), a second-term congressman, introduced a bill that would amend the Social Security Act to extend Medicare EHR incentives, as well as e-prescribing and quality-reporting incentives, to eligible professionals practicing in rural health clinics.

“RHCs should not be discriminated against simply because they bill Medicare differently than hospitals or other healthcare practitioners who practice in rural areas,” Schock said in a news release when he introduced H.R. 3458. “I represent 20 counties in Illinois, several of which include health clinics that are penalized by this accounting error,” he added.

“This is a flaw in the system that needs to be fixed,” he continued. “The last year an eligible provider can start participation in the Medicare EHR incentive program is 2014. Therefore, it is imperative for Congress to quickly level the playing field for healthcare providers who choose to practice medicine in RHCs.”

Reps. Bill Huizenga (R-Mich.), Denny Rehberg (R-Mont.), Cathy McMorris Rodgers (R-Wash.) and Greg Walden (R-Ore.) are co-sponsors on Schock's legislation.

Now, Sharp is encouraging members of the coalition to call their respective congressional delegations and support the bill, which he says he hopes to see included in the next Medicare-related legislation that Congress will consider this year. “Probably the best opportunity would be whatever patch there is for the SGR,” he says, referring to the sustainable growth-rate formula used to determine Medicare payments for physicians. “We hope it would get grafted into that.”

The change would have significant benefits for physicians who provide services at rural health clinics. According to the CMS, the Medicare EHR incentive program would allow eligible professionals, hospitals and critical-access hospitals that demonstrate meaningful use of EHR technology to receive up to $44,000 over a five-year period. To get the maximum incentive payment, eligible professionals must begin participating in 2012.

“We know that from work we've been doing with rural health organizations—like the NRHA—that rural clinics and critical-access hospitals have a lot of catching up to do,” says Neal Neuberger, executive director of the Institute for e-Health Policy. “So they need assistance on the front end with capital to make this work like other meaningful-use facilities.”

Indirect benefits

While the legislation would affect rural health clinics directly, it would also have an indirect—and important—effect on other healthcare groups. One of those is the Iowa Clinic, which has about 145 healthcare providers, including about 125 physicians, in central Iowa and greater Des Moines. Nurse practitioners, physician assistants and physical therapists make up the rest, says Ed Brown, CEO of the Iowa Clinic, which is a coalition member.

“Our ability to exchange information electronically regarding health status or digital imaging can be a clinical imperative that is of great value to our referring physicians that is of great interest to us,” Brown says, adding later that patient care could be compromised if rural facilities do not have a way of transferring data electronically to urban centers or large, tertiary medical centers. Incentive payments could make information systems more affordable for the rural providers.

The bill also has the support of the National Association of Rural Health Clinics, even though the group is not a member of the coalition, says Bill Finerfrock, executive director of the association. In an ideal world, Finerfrock says, the incentives would also extend to other providers, such as physician assistants and nurse practitioners. But there are political realities—namely, funding—related to that, he says.

A summary from the NRHA on meaningful-use incentives for rural health clinics says that changing the Social Security Act to include Uniform Billing (UB) codes would not add to the Congressional Budget Office's current estimate of the Health Information Technology for Economic and Clinical Health, or HITECH, Act. That estimate says the act would reduce federal direct spending for benefits in the Medicare, Medicaid and the Federal Employee Health Benefits programs by about $12 billion from 2011 to 2019.

The news release from Schock touted the bill as “no-cost” legislation. However, a spokeswoman for the CBO says the office has not released any new cost estimates on the HITECH Act and does not calculate or “score” legislation when it has just been introduced.

Sharp acknowledged that cost was a consideration as the coalition advocated for this change—and also recognized that much more could be done to include other providers who were not included in the HITECH Act's incentive payments.

“Some would want to add mid-level providers and change calculations and a lot of other thoughts that have merit and should probably be addressed in due course,” Sharp says. “But what we really needed to do was match what needs to be done for providers and what was palatable on the Hill. Very few members (of Congress) will want to attach something that has additional cost,” he says, adding that in this case, the “dollars have already been appropriated—we just want rurals to have an opportunity for the incentive.”

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