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Exceptions to the RHC Productivity Standards for RHCs as a Result of the COVID-19 Public Health Emergency

Productivity standards are used to help determine the average cost per patient for Medicare reimbursement in RHCs. Physicians, nurse practitioners, physician assistants and certified nurse midwives are held to a minimum number of visits per FTE that they are expected to furnish in the RHC. Failure to meet this minimum may indicate that they are operating at an excessive staffing level, thus, generating excessive cost.

At the end of the RHC’s cost reporting year, the A/B MAC calculates the RHC’s AIR by dividing the total allowable costs across all patient types (that is, the numerator) by the number of visits for all patient types (that is, the denominator). All patient visits (Medicare, Medicaid, Medicare Advantage, private payers, etc.) are included in determining the RHC’s productivity. If fewer than expected visits based on the productivity standards have been furnished, the A/B MAC substitutes the expected number of visits for the denominator and uses that instead of the actual number of visits. The total allowable costs (numerator) would be divided by the higher, expected number of visits (denominator). In this example, this would have the effect of lowering the AIR.

Due to the COVID-19 public health emergency, many RHCs have had to change the way they staff their clinics and bill for RHC services. Some of the RHCs may have difficulty meeting the productivity standards. As a result, National Government Services is allowed to use discretion to make an exception to the productivity standards for a one-year period based on individual circumstances. The RHC must submit a written request for the exception after the providers fiscal year end and provide justification for not meeting the productivity requirements. It is the expectation of CMS and NGS that the information include at a minimum the items included below.

  • A summary of the facility’s hours of operation.
  • A summary of the physician and mid-level practitioner hours and FTE calculations. Any non-RHC hours must be excluded from the calculation of the FTEs, including any contracted hours, administrative hours, hours of service spent in the hospital, etc.
  • A summary of the year-end total RHC visits for each practitioner position (physician, physician assistant and/or nurse practitioner).
  • The exception percentage and/or standard being requested per practitioner position (i.e., physician requested standard  is 3,780 or 90% of standard [4,200 X .90 = 3,780]). 
  • Any additional documentation or narrative that provides support for the exception request.

NGS will then evaluate the information provided and make a determination as to whether an exception should be granted. Please send any requests for exceptions to the productivity standards to

Posted 6/30/2020

Last Modified: 6/30/20
Exceptions to the RHC Productivity Standards for RHCs as a Result of the COVID-19 Public Health Emergency
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