Rural health clinic

[4] Recent evidence shows that the presence of RHCs enables greater appointment availability for Medicaid patients.

This cap is adjusted annually based on the percent change in the Medicare Economic Index (MEI).

Prior to 2001, State Medicaid Programs were required to pay RHCs via a cost-based reimbursement model similar to that of Medicare.

However, the passage of the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA 2000) replaced cost-based reimbursement with a state-specific prospective payment system (PPS).

The RHC program was criticized in the 1990s for allowing enhanced reimbursement to remain for RHCs, even if that clinic is no longer in a rural or under-served community.

To address this issue, Congress passed the Balanced Budget Act of 1997 (BBA) eliminating the grandfather clause for RHCs that had allowed them to retain their status despite the fact that the RHC's location requirements no longer qualified the RHC for the program.

On June 26, 2008, CMS released a second proposed rule to implement the BBA-required elimination of the grandfather clause and to make changes to the RHC and Federally Qualified Health Center (FQHC) conditions of participation.