Federally qualified health center (FQHC) payment
Medicare pays 80% of the lesser of the federally qualified health center (FQHC) charge or the FQHC prospective payment system (PPS) rate for the specific payment code, unless otherwise noted.
Except for grandfathered tribal FQHCs, the FQHC PPS rate reflects:
- Base rate that is the same for all FQHCs,
- Geographic adjustment based on the location where services are furnished, and
- Other applicable adjustments.
Beginning in 2017, the FQHC PPS base rates were updated annually by the FQHC market basket.
To receive payment for qualified services, HCPCS coding is required on all claims.
Geographic adjustment factor
The PPS base rate is adjusted by the FQHC geographic adjustment factor (GAF) based on FQHC location. The PPS rate is the PPS base rate multiplied by the FQHC GAF. Since the FQHC GAF is based on where the services are furnished, the payment rate may differ among FQHC sites within the same organization.
FQHC GAFs are updated periodically and located on the CMS FQHC Center.
New patient adjustment
The PPS rate is adjusted by a factor of 1.3416 when a FQHC furnishes care to a new patient. A new patient is someone who has not received any Medicare-covered professional health services (medical or mental health) from any site within the FQHC organization, or from any practitioner within the FQHC organization, within the past three years from the date of service.
Initial preventive physical exam and annual wellness visit adjustment
The PPS rate is adjusted by a factor of 1.3416 when a FQHC furnishes an initial preventive physical exam or an annual wellness visit to a Medicare beneficiary.
As noted above, these adjustments do not apply to grandfathered tribal FQHCs.
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