This publication is made possible with partial funding from: U.S. Department of Health and Human Services Health Resources and Services

Transcription

1 Arizona Rural Health Clinic Designation Manual August 2008 Version 3 This publication is made possible with partial funding from: U.S. Department of Health and Human Services Health Resources and Services Administration Offi ce of Rural Healh Policy Rural Hospital Flexibility Program

2 Table of Contents Introduction I. An Introduction to Rural Health Clinics...4 A. Background Information B. Rural Health Clinics in Arizona... 7 C. Number of Rural Health Clinics in the United States...9 D. Frequently Asked Questions E. Steps to Becoming a Certified Rural Health Clinic...14 II. Licensing and Certification Requirements...16 A. State Licensing B. Interpretive Guidelines for Rural Health C. See Addendum:Regulatory Guide: RHC/FQHC Proposed Rule D. Preparing for the Certification Inspection E. 30 Most Common RHC Survey/Certification Deficiencies...36 F. RHC Cost Report...39 G. Important Resources...44 III. Appendices...46 A. Important Contact Information B. Definitions for Rural Health Clinic Designation C. Federal Primary Care HPSAs in Arizona D. Federal MUAs in Arizona E. Licensing Forms F. Certification Forms G. Rural Health Clinic Survey Report Cover photo taken by Alison Hughes.

3 Community Environment & Policy 1295 Martin Avenue Phone (520) PO Box FAX (520) Tucson, Arizona Rural Health Office Introduction This is the third version of the Arizona Rural Health Clinic Designation Manual. Since the first manual was published in 2004, ten new rural health clinics received the designation in Arizona and others have designations pending. Hopefully the popularity of the designation can be attributed to some extent on the resource value of this document, as it was distributed to all eligible clinics shortly after its first publication. The contents of this document will help rural clinics assess whether or not the Rural Health Clinic (RHC) designation is fiscally advantageous. It also provides a step-by-step guide to the application process for the designation. The document is made possible with funding support from the Arizona Rural Hospital Flexibility (Flex) Grant Program located in the Rural Health Office. Rural Health Clinics have proliferated throughout the country since 1977 when Congress passed the Rural Health Clinic Act. The purpose of the Rural Health Clinics program is to encourage and stabilize the provision of out-patient primary care in underserved rural areas through the use of physicians, nurse practitioners, physician assistants and certified nurse midwives. According to the National Association of Rural Health Clinics, there are currently over 3,000 designated RHC s in 47 states serving over seven million people. The small number of RHCs in Arizona was in part the result of lack of information about the designation s existence, but also in part because of the excellent work accomplished by the Arizona Association of Community Health Centers to develop a strong network of CHCs in the state. To find out more about the difference between a CHC and an RHC, please refer to the Arizona Rural Health Resource Manual published by the Arizona Rural Health Office: aspx I wish to acknowledge the work of Leila Barraza, MPH, in preparing the original document. She has dedicated many hours and commitment to its preparation that it might contribute, in some small way, to improving the health of people who live in rural and remote areas of Arizona. Alison Hughes, MPA Director, Flex Program Rural Health Office Mel and Enid Zuckerman College of Public Health August,

4 I. An Introduction to Rural Health Clinics A. Background Information What is a certified Rural Health Clinic? Rural Health Clinics (RHCs) provide primary healthcare services in medically underserved areas and are certified under Medicare. Rural Health Clinics also receive an enhanced reimbursement rate from Medicare and Medicaid. What is required to be certified as a Rural Health Clinic? To be certified as a Rural Health Clinic (RHC), a clinic must: Be located in a non-urbanized area as determined by the U.S. Bureau of the Census; Be located in a federally designated Medically Underserved Area (MUA), a federally designated Health Professional Shortage Area (HPSA), or in an area designated as underserved by the state s Governor; Provide outpatient primary care services and basic laboratory services; Employ at least one midlevel practitioner (Nurse Practitioner, Certified Nurse Midwife, or Physician Assistant) who is on-site and available to see patients at least 50 percent of the time the clinic is open; Meet health and safety requirements imposed by Medicare and Medicaid; Must have a physician on staff who provides medical supervision, direction, and consultation; the physician must be present on-site at least one day every two weeks and avail able by telecommunication for assistance at all times. Clinic Ownership: Clinic ownership can be private, non-profit, or public. Provider-Based vs. Independent Rural Health Clinics: Provider-based Rural Health Clinics are owned and operated by any entity defined by the Medicare statute as a provider (hospital, home health agency, or skilled nursing facility). The reimbursement for Provider-based RHCs is handled by the provider associated with the RHC. Provider-based Rural Health Clinics that are owned by a hospital with less than 50 beds are exempt from the per-visit reimbursement cap. The criteria for a facility being defined as Provider-based are not specific to the RHC program and apply to any department that seeks to be designated as 4

5 A. Background Information (con t) Provider-based. The criteria for Provider-based facilities are available online at: gov/transmittals/downloads/a03030.pdf. Independent RHCs are clinics not designated as Provider-based. An Independent RHC can be owned and operated by a hospital. Unless the hospital applies for and receives approval for the clinic as Provider-based, it will be considered an Independent RHC. In addition to hospitals, independent RHCs can also be owned by physicians, physician assistants, nurse practitioners, certified nurse midwives, skilled nursing facilities, home health agencies, for-profit cooporations, not-for-profit corporations, or government entities. Independent RHCs are reimbursed through an RHC fiscal intermediary. Sources: National Association of Rural Health Clinics, RHC Technical Assistance, RHC Basics: Part II, narhc.org/home/rhc.php; Rural Assistance Center, Rural Health Clinics, clinics/rhc.php; U.S. Department of Health and Human Services, Health Resources and Services Administration, Office of Rural Health Policy, Starting a Rural Health Clinic: A How-To Manual, RHCmanual.htm. Rural Health Clinics Act- PL : An Overview The following is an overview, from the National Association of Rural Health Clinics, of the requirements clinics must meet in order to become certified as a Rural Health Clinic (available online at: The purpose of the Rural Health Clinics program is to encourage and stabilize the provision of out-patient primary care in underserved rural areas through the use of physicians, physician assistants (PAs), nurse practitioners (NPs) and certifi ed nurse midwives (CNMs). 1. Location - Rural Health Clinics must be located in communities that are both rural and underserved. For purposes of the Rural Health Clinics Act, the following defi nitions apply to these terms: -Rural Areas - Census Bureau designation as Non-urbanized -Shortage Area - a federally designated Health Professional Shortage Area, a federally designated Medically Underserved Area or an Area designation by the state s Governor as underserved. 2. Physical Plant -May be permanent or mobile -Has a preventive maintenance program -Has non-medical emergency procedures 3. Staffi ng -One or more physicians -One or more PAs, NPs or CNMs -PA, NP or CNM must be on-site and available to see patients 50% of the time the clinic open for patients. 4. Provision of Services Each Rural Health Clinic must be capable of delivering out-patient primary care services. The Clinic must maintain written patient care policies: -Developed by a physician, physician assistant or nurse practitioner, and one health practitioner who is not a member of the clinic staff 5

6 A. Background Information (con t) -Describes the services provided directly by the clinic s staff or through arrangement -Provide guidelines for medical management of health problems; and, -Provide for annual review of the policies -Direct Services (must be provided by clinic staff) Provide diagnostic and therapeutic services that are commonly furnished in a physician s offi ce Provide basic laboratory services (6 tests) -Chemical examinations of urine -Hemoglobin or Hematocrit -Blood sugar -Examination of stool specimens for occult blood -Pregnancy test -Primary culturing for transmittal Provide Emergency Services -First response to common life-threatening injuries and acute illnesses -Has available drugs used commonly in life-saving procedures Services Provided through Arrangement (may be provided by individuals other than clinic staff) -In-patient hospital care -Specialized physician services -Specialized diagnostic and laboratory services -Interpreter for foreign language if indicated -Interpreter for deaf and devices to assist communication with blind 5. Patient Health Records Record System Guided by Written Policies and Procedures Designated Professional Staff Member Responsible for Maintaining Records Records must include the following information -Identification data -Physicians orders -Physical exam fi ndings -Consultative fi ndings -Social data -Diagnostic and laboratory reports -Consent forms -Medical history -Health status assessment -Signatures of the physician or other health care professionals Protection of Record Information Policies -Maintenance of confi dentiality, safeguards against loss, destruction or unauthorized use -Written policies and procedures govern use and removal and release of information -Written patient consent is required for release 6

7 B. Rural Health Clinics in Arizona (as of 8/2008) 1) Bouse Medical Clinic Location: East Pulmosa Road Bouse, AZ Mailing Address: Same as above Phone: (928) Fax: (928) Year of Certification: Type of Clinic: Provider-Based Hospital Affiliation: La Paz Regional Hospital 2) Community Health Care of Douglas, Inc Location: 2174 West Oak Avenue Douglas, AZ Mailing Address: Same as above Phone: (520) Fax: (520) Year of Certification: 2007 Type of Clinic: Provider-Based Hospital Affiliation: Southeast Arizona Medical Center 3) Copper Queen Medical Associates- Bisbee Location: 101 Cole Avenue Bisbee, Arizona Mailing Address: Same as Above Phone: (520) Fax: (520) Year of Certification: 2004 Type of Clinic: Provider-Based Hospital Affiliation: Copper Queen Community Hospital 4) Copper Queen Medical Associates- Douglas Location: 100 East 5th Street Douglas, Arizona Mailing Address: Same as Above Phone: (520) Fax: (520) Year of Certification: 2004 Type of Clinic: Provider-Based Hospital Affiliation: Copper Queen Community Hospital 5) Greasewood Clinic Location: Off Route 15 Greasewood, AZ Mailing Address: P.O. Box 457 Ganado, AZ Phone: (928) Fax: (928) Year of Certification: 1999 Type of Clinic: Provider-Based Hospital Affiliation: Sage Memorial Hospital 6) La Paz Medical Services, Quartzsite Location: 150 East Tyson Road Quartzsite, AZ Mailing Address: P.O. Box 4618 Quartzsite, AZ Phone: (928) Fax: (928) Year of Certification: 2004 Type of Clinic: Provider-Based Hospital Affiliation: La Paz Regional Hospital 7) Palominas Hereford Rural Health Clinic Location: East Highway 92 Palomias, AZ Mailing Address: Same as above Phone: (520) Fax: (520) Year of Certification: 2008 Type of Clinic: Provider-Based Hospital Affiliation: Copper Queen Community Hospital 8) Pleasant Valley Community Medical Center Location: 288 Tewkbury Young, AZ Mailing Address: Same as Above Phone: (928) Fax: (928) Year of Certification: 1995 Type of Clinic: Independent Hospital Affiliation: Cobre Valley Community Hospital 9) Regional Center for Border Health/San Luis Walk-In Clinic Location: 1896 East Babbitt Lane, Suite D San Luis, Arizona Mailing Address: Same as Above 7

8 B. Rural Health Clinics in Arizona (con t) Phone: (928) Fax: (928) Year of Certification: 2004 Type of Clinic: Independent Hospital Affiliation: N/A 10) Sage Outpatient Clinic Location: Ganado, AZ Mailing Address: P.O. Box 457 Ganado, AZ Phone: (928) Fax: N/A Year of Certification: 2000 Type of Clinic: Provider-Based Hospital Affiliation: Sage Memorial Hospital 11) Sulphur Springs Medical Center Location: 900 W Scott Street Willcox, Arizona Mailing Address: Same as Above Phone: (520) Fax: (520) Year of Certification: 2004 Type of Clinic: Provider-Based Hospital Affiliation: Northern Cochise Community Hospital 12) Sunsites Medical Clinic Location: 225 Frontage Road Pearce, Arizona Mailing Address: P.O. Box 186 Pearce, Arizona Phone: (520) Fax: (520) Year of Certification: 2004 Type of Clinic: Provider-Based Hospital Affiliation: Northern Cochise Community Hospital 13) Superior Clinic Location: 14 N Magma Ave. Superior, AZ Mailing Address: Same as Above Phone: (520) Fax: (520) Year of Certification: 2005 Type of Clinic: Provider-Based Hospital Affiliation: Cobre Valley Community Hospital 14) Tri-Valley Medical Center Location: Harquahala Road Salome, AZ Mailing Address: Same as Above Phone: (928) Fax: (928) Year of Certification: 2006 Type of Clinic: Provider-Based Hospital Affiliation: La Paz Regional Hospital 15) Wickenburg Hospital Clinic Location: 520 Rose Lane Wickenburg, AZ Mailing Address: Same as above Phone: (928) Fax: (928) Year of Certification: Type of Clinic: Provider-Based Hospital Affiliation: Wickenburg Community Hospital 16) Wide Ruins Clinic Location: Wide Ruins, AZ Mailing Address: P.O. Box 457 Ganado, AZ Phone: (928) Fax: N/A Year of Certification: 1997 Type of Clinic: Provider-Based Hospital Affiliation: Sage Memorial Hospital Source: Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities 8

9 C. Number of Rural Health Clinics in the United States, Total # of Clinics United States 3,599 Alabama 64 Alaska 6 Arizona 2 15 Arkansas 72 California 343 Colorado 35 Connecticut 0 Delaware 0 District of Columbia 0 Florida 152 Georgia 95 Hawaii 1 Idaho 44 Illinois 197 Indiana 51 Iowa 129 Kansas 168 Kentucky 115 Louisiana 56 Maine 49 Maryland 0 Massachusetts 0 Michigan 156 Minnesota 72 Mississippi 137 Missouri 271 Montana 41 Nebraska 89 Nevada 6 New Hampshire 18 New Jersey 0 New Mexico 11 New York 9 North Carolina 109 North Dakota 59 Ohio 17 Oklahoma 42 Oregon 44 Pennsylvania 42 Puerto Rico 0 Rhode Island 1 South Carolina 95 South Dakota 54 Tennessee 40 Texas 344 Utah 14 Vermont 18 Virgin Islands 0 Virginia 55 Washington 109 West Virginia 63 Wisconsin 62 Wyoming 18 1 Source: Centers for Medicare and Medicaid Services, Standard Online Survey and Certification Reporting System (OSCAR), Report 10. Accessed through: According to the Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing, Arizona has 15 certified Rural Health Clinics in as of

10 D. Frequently Asked Questions Q: What are the benefits of being certified as a RHC? A: RHCs receive enhanced Medicare and Medicaid reimbursement. Medicare visits are reimbursed based on allowable costs and Medicaid visits are reimbursed under the cost-based Prospective Payment System (PPS). Since certified RHCs are reimbursed on a cost-based reimbursement, as opposed to a fee-for-service reimbursement, RHC certification can increase revenues. RHCs may see improved patient flow through the utilization of NPs, PAs and CNMs, as well as more efficient clinic operations. Q: How do I know if becoming certified as a RHC could be financially beneficial for my clinic? A: Experts say that a good rule of thumb to follow is if at least thirty-five to forty percent of your patients are combined Medicare and Medicaid patients, then becoming a certified RHC could be financially beneficial to your clinic. Q: How does a certified RHC differ from a Federally Qualified Health Center (FQHC)? A: Federally Qualified Health Centers are organizations that receive grants under section 330 of the Public Health Service Act. FQHCs must be open at least 32 hours per week, whereas RHCs have no minimum hours per week requirement. In addition, a for-profit clinic cannot be a FQHC but can be certified as an RHC. Unlike RHCs, FQHCs must be governed by a board of directors. FQHCs are required to provide mental health and substance abuse services, dental services, transportation services required for sufficient patient care, hospital and specialty care; RHCs are not required to provide these services. Q: Do I need a separate building to have an RHC? A: No. An RHC can be in a stand-alone building, a part of another building or a mobile unit. Q: What types of services do RHCs provide? A: RHCs must provide outpatient primary care services and basic laboratory services. They can also offer other services such as mental health services and vision services, however, such services may not be reimbursed based on allowable costs. Q: If a location loses its shortage designation, is it possible to remain a Rural Health Clinic? A: Rural Health Clinics located in rural areas that are no longer designated as medically underserved may apply for an exception. Proposed criteria for allowing an exception are spelled out in the Federal Register notice Medicare Program; Rural Health Clinics: Amendments to Participation Requirements and Payment Provisions; and Establishment of a Quality Assessment and Performance Improvement Program; Final Rule (see section II.C. Important Update from the National Rural Health Clinic Association regarding the details and status of this CMS Final Rule). Q: Are there special staffing requirements for RHCs? A: RHCs must employ at least one nurse practitioner (NP), physician assistant (PA), or certified nurse midwife (CNM). The NP, PA, or CNM must be on-site and available to see patients at least 50% of the time the clinic is open. RHCs must have a physician present on-site and available to see patients at least one day every two weeks, unless greater on-site availability is required by state 10

11 D. Frequently Asked Questions (con t) law or state regulatory mechanism governing PA, NP or CNM practice. Q: What is the per visit upper payment limit for RHCs for 2008? A: For CY 2008, the Medicare RHC upper payment limit per visit is $ Provider-based clinics that are owned by a hospital with less than 50 beds are exempt from this per visit reimbursement cap. For more information, visit the Centers for Medicare and Medicaid Services at: www. cms.hhs.gov. Q: How does Medicare reimburse RHCs? A: Certified Rural Health Clinics receive an interim payment rate throughout the clinic s fiscal year, which is reconciled at the end of the fiscal year through cost reporting. The interim payment rate is determined by taking total allowable costs for RHC services divided by allowable visits provided to RHC patients receiving core RHC services. RHC staff should understand traditional Medicare regulations for coding and documentation as well as unique RHC billing requirements. Q: How does Arizona reimburse RHCs for Medicaid? A: AHCCCS, Arizona s Medicaid program, recognizes RHC services. The state reimburses RHCs under one of two different methodologies. The first is a prospective payment system. Under this methodology, for fiscal year 2001, the state calculated a per encounter rate based on an average of 100 percent of the reasonable costs furnished in FY 1999 and FY For each succeeding year, this per encounter baseline rate is then increased by the Medicare Economic Index factor. The second rate setting methodology (the Alternative Payment Methodology) requires a rebase of the PPS rate every three years, and the physician services component of the CPI is used to inflate the rate during the interim years. The clinic must agree to this methodology, and the payment to the clinic must at least equal the payment under a prospective payment system. The Arizona reimbursement methodology can be downloaded at: Q: How is an RHC encounter defined? A: An encounter is defined as a face-to to-face visit between a recognized provider (i.e., physician, PA, NP, CNM, or mental health provider) and a Medicare beneficiary for a medically necessary reason. Clinics receive the RHC rate for Medicare patients for every encounter. Q: What is the difference between a UPIN and a PIN? A UPIN (Unique Provider Identification Number) is a six-character alphanumeric identifier assigned to all Medicare physicians, medical groups and non-physician practitioners. A PIN (Provider Identification Number) is a unique number issued by payers to each provider to identify that provider as a credentialed and approved provider. This number is also known as a Medicare billing number. 11

12 D. Frequently Asked Questions (con t) Q: Can our doctors, during RHC time, treat patients at a residential care facility and assisted living care facility and be reimbursed? Can our doctors do house calls and get paid? A: If the medical provider treats patients in a Skilled Nursing Facility (SNF) (100-day Part A bed) in a nursing home, those services are billed to Part B, and cannot be included in Part A encounters like other nursing home visits. Only those patients in the 100-day Part A bed have to be billed to Part B. The rest of the nursing home visits are billed thru Part A as a regular RHC encounter, at the RHC encounter rate. Any time Part B is billed for a service provided, you must also carve out the associated cost of that service from the RHC cost report. Certainly, medical providers can still provide treatment for patients in a residential care facility, if that is the patient s place of residence, and it is handled the same as a house call or home visit billed to Part A as an encounter. There are three places of service where the medical provider can bill as an RHC encounter. They are: 1) In the Rural Health Clinic 2) In a nursing home (not a 100-day Part A stay) or other medical facility 3) In the patient s place of residence or at the scene of an accident. Q: Can our clinic at a satellite location offer health services outside of the RHC? A: No. The Medicare program makes payments to the RHC for covered RHC services when provided to a patient at the clinic, skilled nursing facility or other medical facility, the patient s place of residence, or elsewhere (i.e., at the scene of an accident). Q: How would the organizational relationships between a RHC and Critical Access Hospital (CAH) operate? A: The RHC and CAH programs are two separate programs and have different participation criteria. If the facilities follow the individual criteria for their respective programs, then the two programs could co-exist. A CAH could be the owner of a certified RHC and operate the RHC as either a provider-based or independent clinic. From an economic standpoint, the CAH would be well advised to compare the payments for the clinic if operated as an RHC or as an outpatient department of the CAH. CAH outpatient payments are typically better than outpatient payments for traditional hospitals. Q: We are an RHC all day. For Medicare patients regarding CPT coding, can we use minutes vs. time spent with the patient? A: Time cannot be a factor when deciding to code up or down. Coding depends on history, examination, and the medical decision needed. For example, one patient may take 30 minutes but have nothing wrong with them while another patient may be seen for only a few minutes before they are sent to the emergency room. Coding depends on the medical decision-making, not the amount of time. Q: If you make rounds at the nursing home and you see a patient who is on hospice, can you bill it as an RHC visit? A: If the hospice patient receives services from you that are unrelated to the patient s terminal condition, then you can then bill the visit to the RHC. However, if you are adjusting pain medications or providing supportive care, then you must bill hospice. 12

13 D. Frequently Asked Questions (con t) Q: Regarding supplies, in order to be covered in the RHC, what must the supply or service be? A: The supply or service must be of a type that would be furnished in a physician s office; a type that is commonly provided without charge or included in the RHC s bill; and a type that is provided as incidental to the service of the physician, nurse practitioner, physician assistant, clinical social worker, certified midwife, or clinical psychologist. Q: Are RHCs subject to incident to regulations as it relates to the provision of services by the midlevel provider? A: No. The physician does not need to be present in the facility when a midlevel provider sees the patient and midlevel providers can see patients new to the clinic. Q: Do I have to log every flu and pneumoccal shot including non-medicare patients? A: No. There is no requirement to log other payer types, however, the total flu and total pneumoccal shots provided are needed to complete the cost report correctly. Q: How are flu and pneumoccal shots billed in RHCs? A: A log or roster of Medicare patients is maintained and submitted with the cost report at yearend. Medicare pays the cost of the shots. No bill is submitted to Medicare. Q: What does Medicare require regarding documentation in the flu and pneumoccal logs? A: Patient Name, HIC Number (Medicare Number), and Date of service (shot). Q: Can RHC bill for both a Rural Health Clinic visit and an inpatient admission on the same day? A: No. Medicare would consider this double dipping. Q: If you perform a surgery in the hospital using a global fee and the patient has a pre-op and a post-op visit in the RHC, can I bill Medicare Part A for the RHC visits? A: No. Medicare would consider this double dipping. Sources: Rural Resource Center, Rural Health Clinics, J.E. Estes, Healthcare Horizon; Rural Resource Center, Federally Qualified Health Centers, org/info_guides/clinics/fqhc.php.; National Association of Rural Health Clinics, RHC Technical Assistance, RHC The Basics: Part II; Centers for Medicare and Medicaid Services, Announcement of Medicare Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) Payment Rate Increase, AHCCCS, Arizona state plan amendment (SPA) , az.us/publications/planswaivers/amendments/medicaidspas/2003/03_007approvalcms1_5_04.pdf; Oregon Office of Rural Health, Rural Health Clinics, 13

14 E. Steps to Becoming a Certified Rural Health Clinic Step 1: Determine Eligibility for Certification. The interpretive guidelines for Rural Health Clinics are listed in section II. B. Interpretive Guidelines for Rural Health Clinics of this manual. Step 2: Financial Feasibility Assessment. A financial study should assess the actual (for existing clinics) or estimated (for new clinics) data on payor mix (Medicare, Medicaid, and other). Experts say that a good rule of thumb to follow is if at least thirty-five to forty percent of your patients are combined Medicare and Medicaid patients, then becoming a certified RHC could be financially beneficial. Additionally, if an existing practice does not currently employ an NP, PA, or CNM, the practice must decide whether the cost of hiring one would be offset by increased revenue. Step 3: File an RHC Application. If the site is already licensed as an Outpatient Treatment Center by the state of Arizona, the site must send a letter to the Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing ( stating that the site would like to be certified as a Rural Health Clinic. The letter should also include a request for an RHC application packet. It is important that the site contact their Medicare fiscal intermediary before completing the CMS 855A provider/supplier enrollment application form. If the site does not know who their fiscal intermediary is, they may check the Centers for Medicare and Medicaid Service s Intermediary Carrier Directory website ( or they may contact the Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing. If the site is not already licensed as an Outpatient Treatment Center by the state of Arizona, the site must send a letter to the Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing ( stating that the site would like to be licensed as an Outpatient Treatment Center and certified as a Rural Health Clinic. In the letter, the site should request both a licensing packet and an RHC application packet. It is important that the site contact their Medicare fiscal intermediary before completing the CMS 855A provider/supplier enrollment application form (this form can be obtained from the following website: If the site does not know who their fiscal intermediary is, they may check the Centers for Medicare and Medicaid Service s Intermediary Carrier Directory website ( pdf). Please note: Facilities located on an Indian Reservation do NOT have to be licensed as an Outpatient Treatment Center in order to apply for Rural Health Clinic certification. In addition, private practice clinics not providing urgent care services may not be required to be licensed as an Outpatient Treatment Center in order to apply for Rural Health Clinic certification. Contact the Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing for more information. Step 4: RHC Certification Inspection. The site should contact the Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing, in writing, and indicate when the site would be ready for an inspection. To be ready for the inspection, the site needs to be in compliance with RHC requirements and have seen patients at the site. The 14

15 E. Steps to Becoming a Certified Rural Health Clinic (con t) Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing will then conduct a survey. Step 5: Rural Health Clinic Cost Report. Once a clinic has received its Medicare Provider Letter from the Centers for Medicare and Medicaid Services, the clinic then files a projected cost report in order to have its Medicare Rate determined. Independent Rural Health Clinics complete the CMS Form and Provider-based Rural Health Clinics complete Worksheet M of the CMS Form. These forms are available from the CMS Web site ( gov/cmsforms/). Adapted from: Rural Assistance Center, Rural Health Clinics, 15

16 A. State Licensing II. Licensing and Certification Requirements A site must be licensed by the Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing as an Outpatient Treatment Center in order to become a certified Rural Health Clinic in Arizona. If a site is interested in becoming both licensed and a certified Rural Health Clinic, then the site may request both a licensing application packet and an RHC application packet from the Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing (see Appendix A. Important Contact Information). The requirements for licensing medical facilities are according to Title 9, Chapter 10 of the Arizona Administrative Code. To see the sections of the code pertaining to the licensing of health institutions in its entirety, please visit the following website The forms required for licensing (see Appendix E. Licensing Forms) can be printed from the internet from the Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing s website ( If the site is applying for an initial license, the site must complete the Initial Application for a Health Care Institution License. The initial application is for a new facility just being licensed for the first time or for an already licensed facility that has had a change in location or ownership. If the site is applying for a renewal of their license, the site must complete the Renewal Application for a Health Care Institution License. In addition, an Outpatient Facility Information sheet must accompany the initial or renewal application. An important aspect of licensing is that the facility s floor plan must be contiguous. For example, if a patient must pass through a hallway in order to get to another area of the clinic, and that hallway is not licensed, then the patient of the clinic cannot pass through that hallway. Therefore, once the patient comes into the licensed area, the patient must be able to stay in the licensed area for the duration of the visit. It is important to note that the Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing must be notified, in writing, if any changes are made to the site s building, administration, or to the services offered by the site. Please note: Facilities located on an Indian Reservation do NOT have to be licensed as an Outpatient Treatment Center in order to apply for Rural Health Clinic certification. In addition, private practice clinics not providing urgent care services may not be required to be licensed as an Outpatient Treatment Center in order to apply for Rural Health Clinic certification. Contact the Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing for more information. Source: Arizona Department of Health Services, Division of Licensing Services, Office of Medical Facilities Licensing, 16

17 B. Interpretive Guidelines for Rural Health Clinics A site must comply with the following guidelines in order to become a certified Rural Health Clinic. These interpretive guidelines are available online from the National Association of Rural Health Clinics at: The forms required for certification as a Rural Health Clinic are listed in Appendix F. Certification Forms. INTERPRETIVE GUIDELINES - RURAL HEALTH CLINICS Conditions for Certification I. COMPLIANCE WITH FEDERAL, STATE, AND LOCAL LAWS (42 CFR 491.4) The RHC and its staff are in compliance with applicable Federal, State, and local laws and regulations. A. Federal Laws and Regulations.--The Federal regulations governing the certifi cation of RHCs were published in the Federal Register on July 14, 1978, 43 FR 136. Conditions for certifi cation under those regulations are the subject of these guidelines. B. State Laws and Regulations. All States have practice acts that govern the activities of health professionals. While there is considerable variation in the States practice acts concerning physician assistants, nurse practitioners and certifi ed nurse-midwives, there is a broad mandate in the medical practice acts of all States giving physicians authority to diagnose and treat medical conditions. The extent to which the physician may delegate these responsibilities and to whom, and under what conditions, varies in the states. Some States have updated their practice acts since the advent of the physician assistant, nurse practitioner and certifi ed nurse-midwife health care professionals. In some instances, these updated practice acts have included defi nitions and specifi c references to permitted/prohibited activities, supervision/guidance required by a physician, and location/situations in which nurse practitioners, certifi ed nurse-midwives and physician assistants may function. In some States where nurse practice acts have not been signifi cantly updated, some functions of the nurse practitioner are viewed as an extension of the traditional nursing role as being covered by the existing nurse practice act. Rural health clinics can be certifi ed only if the State permits--that is, does not explicitly prohibit--the delivery of primary health care by a nurse practitioner, certifi ed nurse-midwife or a physician assistant. The surveyor will encounter wide variations in the wording, interpretation, and application of States practice acts as they affect the physician assistant, nurse practitioner and certifi ed nurse-midwife in the RHC setting. In situations where the State law is silent, or where the state law does not specifi cally prohibit the functioning of a physician assistant, nurse practitioner or certifi ed nurse-midwife with medical direction by a physician and with the degree of supervision, guidance, and consultation required by the RHC regulations, the surveyor may consider this condition as being met. Interpretations needed on specifi c aspects of the State s practice act should be sought through the State regulatory agency or board(s) dealing with the practice and profession. II. LOCATION OF CLINIC (42 CFR 491.5) Consult with the Regional Offi ce (R.O.) to preliminarily ascertain that a clinic meets the basic requirement of location prior to scheduling a survey. The clinic must be located in a rural area that is designated as a shortage area. Applicants determined not qualifi ed under this requirement should be sent a letter (see Exhibit.27) with the appropriate notation. A. Rural Area Location. The law requires the clinic to be located in an area that is not an urbanized area as defi ned by the Bureau of the Census. The Bureau has published both a narrative defi nition of an urbanized 17

18 B. Interpretive Guidelines for Rural Health Clinics (con t) area and maps displaying the land area of urbanized areas. Lists and maps of the urbanized areas are contained in the number of inhabitants census volume for that State (census of population series PC A). Note that this definition is different from that of a metropolitan statistical area (MSA). Contact the Census Bureau for a determination on whether the clinic is located in a non-urbanized area. B. Shortage Area Designation. After it has been ascertained that the clinic is located in a non-urbanized area, the CMS RO will certify whether or not the clinic is located in a currently designated shortage area. The CMS RO, after consulting with PHS RO staff, promptly responds in writing to the request for a determination. This information may be given by telephone as long as it is followed by a written response. This consultation explores designation: -- As an area with a shortage of personal health services under 5330(b)(3) or 1302(7) of the PHS Act; -- As a health professional shortage area described in 5332(a)(1)(A) of the PHS Act; -- As an area which includes a population group which the Secretary determines has a health professional shortage under 5332(a)(1)(B) of the PHS Act; -- As a high migrant impact area described in 5329(a)(5) of the PHS Act; or -- As an area designated by the chief executive offi cer of the State and certifi ed by the Secretary as an area with a shortage of personal health services. These designations are published periodically in the Federal Register by the PHS Bureau of Health Care Delivery and Assistance. Designation under any section qualifi es a RHC location. The designation process is a continuing process, with additions of newly designated areas and deletions of previously designated areas occurring daily. Designation information can also be obtained on-line by going to: datawarehouse.hrsa.gov/ For HPSA information, click on Health Professional Shortage Areas (HPSAs) under the Health Professions header and for MUA information click on Medically Underserved Areas/Medically Underserved Populations which is under the Primary Health Care header. C. Mobile Units. The Conditions for Certifi cation must be met by a mobile unit for it to qualify as a RHC. In addition, it should be ascertained that the mobile unit has fi xed scheduled locations, each of which meet the rural and shortage area requirements. Since the mobile unit is a clinic, it is expected that the RHC services are provided in the unit and not in a permanent structure, with the unit serving only as a mobile repository for the equipment, supplies, and records. The only exception would be if the RHC services are furnished off the clinic s premises (away from the unit) to homebound patients. Where a facility offers RHC services at a permanent structure as well as in a mobile unit, each facility must be certifi ed separately as a RHC. This is differentiated from the situation where a permanent structure provides RHC services off the premises, e.g., to homebound patients, with the use of a vehicle to transport supplies, equipment, records, and staff. D. Exceptions to the Location Requirement. There are two grandfather provisions applicable to the certifi cation process. 1. Loss of Location Eligibility. This grandfather provision applies to the annual recertifi cation process. It should be used as a yea response to item J11 and on the CMS-30 when a facility which was previously certifi ed as being located in a nonurbanized and designated shortage area subsequently loses either or both of these characteristics. When this occurs, the facility does not lose its eligibility for continued participation in the program because it does not meet the location requirement. If J11 is marked yes, mark J17 and J18 N/A. 18

19 B. Interpretive Guidelines for Rural Health Clinics (con t) 2. Clinics Operating on July 1, Potential applicants under this grandfather provision still have to meet the rural location requirement. The other requirement under this provision is that the Secretary has determined that the area served has an insuffi cient supply of primary care physicians. Facilities providing services on July 1, 1977, in a nonurbanized area which is determined to have unmet needs for primary health care but which is not a designated shortage area are potential applicants. Therefore, the facility may be primarily serving a designated area but not located in a designated shortage area. It must be determined whether the location of the clinic is an appropriate part of a service area which includes areas or populations which have been designated either as having a health manpower shortage, or as being medically underserved. Aiding this determination will be previous PHS decisions made on behalf of the Secretary. The answer to question V on CMS-29 is an important indicator. Several PHS programs provide or have provided grant support to enable the facility to provide health care to designated areas. These programs do not require that the facility be located in a designated shortage area. Many of these facilities were operating with PHS grant support prior to enactment of the Rural Health Clinic Services Act of 1977 (P.L ) and may constitute certifi able RHC applicants. Some examples of these PHS programs are National Health Service Corps (KHSC), Migrant Health, Health Underserved Rural Areas (HURA), and Rural Health Initiative (RHI). Prior to P.L a number of states had programs to assist their rural areas with greater access to primary care. The location of the facilities developed by these programs was determined by valid criteria established by the State, although location in a designated shortage area may not have been one of them. These facilities are also potential applicants under this grandfather provision. When it is determined that an applicant clinic not located in a designated shortage area may be a potential applicant under this grandfather provision, develop the following information and submit it to the CMS RO for a determination as to whether the facility meets the requirements of this grandfather provision: -- A description of the geographic boundaries of the facility s service area; -- Information developed through consultation with the PHS RO, staff about whether the area, or any portion of the area, had ever been reviewed for designation under any of the applicable sections of the PHS Act; -- Identification of any designated population group or institution in the facility s service area; -- Information secured from the appropriate Health Systems Agency and the State Health Planning and Development Agency and about the primary care resources available in the facility s service area; -- Information about any planning, developmental, or operating funds awarded to the facility by the county, State, or Federal Government to assist in providing, greater access- to health care in the area; -- Information about the factors considered in determining where the facility was to be located; and -- Any additional information the SA or RO feels is relevant. III. PHYSICAL PLANT AND ENVIRONMENT (42 CFR 491.6) A. Physical Plant Safety. To insure the safety of patients, personnel, and the public, the physical plant should be maintained consistent with appropriate State and local building, fi re, and safety codes. Reports prepared by State and local personnel responsible for insuring that the appropriate codes are met should be available for review. Determine whether the clinic has safe access and is free from hazards that may affect the safety of patients, personnel, and the public. B. Preventive Maintenance. A program of preventive maintenance should be followed by the clinic. This includes inspection of all clinic equipment at least yearly, or as the type, use, and condition of equipment dictates; the safe storage of drugs and biologicals (see 42 CFR 491.6(b)(2)) and inspection of the facility to assure that services are rendered in a clean and orderly environment. Inspection schedules and reports 19

20 B. Interpretive Guidelines for Rural Health Clinics (con t) should be available for review by the surveyor. C. Non-medical Emergencies. Review written documentation and interview clinic personnel to determine what instructions for non-medical emergency procedures have been provided and whether clinic personnel are familiar with appropriate procedures. Non-medical emergency procedures may not necessarily be the same for each clinic. IV. ORGANIZATIONAL STRUCTURE (42 CFR 491.7) A. Basic Requirements. Ascertain that the clinic is under the medical direction of a physician(s), has a staff that meets the requirements of ,and has adequate written material covering organization policies, including lines of authority and responsibilities. B. Written Policies. Written policies should consist of both administrative and patient care policies. Patient care policies are discussed under 42 CFR 491.9(b). In addition to including lines of authority and responsibilities, administrative policies may cover topics such as personnel, fi scal, purchasing, and maintenance of building and equipment. Topics covered by, written policies may have been infl uenced by requirements of the founders of the clinic, as well as agencies that have participated in supporting the clinic s operation. C. Disclosure of Names and Addresses. The clinic discloses names and addresses of the owner, person responsible for directing the clinic s operation, and physician(s) responsible for medical direction. Any entity may organize itself as an owner of a RHC. The types of organizations being referred to are described in answers to question IV on the Request to Establish Eligibility. These range from: -- A physician in a private general practice located in a shortage area who employs either a nurse practitioner, certifi ed nurse-midwife or a physician assistant; -- A nurse practitioner, certified nurse-midwife or a physician assistant in solo practice in a shortage area who develops the required relationship with a physician for medical direction; to -- Organizations either for profi t or not for profi t who own primary care clinics located in shortage areas. Any change in ownership or physician(s) responsible for the clinic s medical direction requires prompt notice to the RO. Neither of these changes requires resurvey or recertifi cation if the change can otherwise be adequately verifi ed. Notice of any change in the physician(s) responsible for providing the clinic s direction should include evidence that the physician(s) is licensed to practice in the state. V. STAFFING AND STAFF RESPONSIBILITIES (42 CFR 491.8) A. Suffi cient Staffing. The staffi ng described in 42 CFR 491.8(a) is the minimum staffi ng requirement. However, you also determine whether the clinic is suffi ciently staffed to provide services essential to its operation. Because clinics are located in areas that have been designated as having shortages of health manpower or personnel health services, they frequently are not able to employ what would be considered suffi cient health care staffs. When item J42 on the SRF is marked no, explain, with reasonable detail, the circumstances (and efforts to overcome them) that make employment of additional needed staff not possible. Should the loss of a physician, physician assistant, certifi ed nurse-midwife or nurse practitioner member of the staff reduce the clinic s staff below the required minimum, the clinic should be afforded a reasonable time to comply with the staffi ng requirement. The clinic must provide some type of documentation showing the its good faith effort to obtain staff. The clinic should inform the State of all actions taken to recruit a replacement and expected outcome. The loss of a physician assistant or nurse practitioner staff member may require a temporary adjustment of the clinic s operating hours or services and an adjustment in the scheduled visits by the physician(s) providing medical direction. The loss of the physician member will 20