CLIENT ALERT: Medicare Proposed Rules Contain Significant Advances for FQHCs in Behavioral Health and Care Management

By | Published On: July 18, 2023

FTLF will be hosting a webinar on both CMS Notices of Proposed Rule Making on August 3 at 1 p.m. ET that will cover the developments discussed below. For more information and to register, click here.

On July 13, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a preview copy of the Medicare Calendar Year (CY) 2024 Physician Fee Schedule Notice of Proposed Rulemaking (PFS NPRM). The same day, CMS issued a preview copy of the Medicare CY 2024 Outpatient Hospital Prospective Payment System Notice of Proposed Rulemaking (OPPS NPRM).

The two NPRMs bring good news for federally-qualified health centers (FQHCs) participating in the Medicare program, particularly in expanding the range of mental health, care management, and remote monitoring services that FQHCs can provide under Medicare. The reason that the outpatient hospital rulemaking is relevant to FQHCs—for the first time ever—is that a newly-added Medicare FQHC mental health benefit, “intensive outpatient services,” will be paid for via the Medicare OPPS in CY2024. While some of the new regulatory provisions are merely implementing changes that Congress has recently made to the Medicare law, others represent new policy initiatives by CMS to expand the scope of FQHCs’ capacity to serve Medicare patients.

The PFS NPRM is scheduled to be formally published in the Federal Register on August 7. The OPPS NPRM is scheduled to be published in the Federal Register on July 31. Comments on each NPRM must be submitted by September 11, 2023.

An overview of the major provisions of the CY2024 Physician Fee Schedule and Outpatient Hospital NPRMs impacting FQHCs is below.

Implementing Consolidated Appropriations Act 2023 FQHC Mental Health Provisions

As we discussed in a January 4 client alert, the Consolidated Appropriations Act (CAA) 2023 (Pub. L. 117-328), the omnibus budget law for Fiscal Year (FY) 2023, included two major new changes to the Medicare FQHC and rural health clinic (RHC) benefits, expanding the scope of Medicare mental health services that these facilities may provide. Each statutory change takes effect January 1, 2024. The PFS and OPPS NPRMs include various revisions to the Medicare regulations to implement these changes.

  • MHC and MFT Services. CAA 2023, Div. FF, Section 4121 recognizes, for the first time, marriage and family therapist (MFT) services and mental health counselor (MHC) services as covered Medicare services, and recognizes MHCs and MFTs as eligible to enroll as clinicians in Medicare, effective January 1, 2024. For FQHCs and RHCs, the provision expands the definitions of FQHC services and RHC services in the Medicare statute to include the services of MHCs and MFTs. The PFS NPRM includes various provisions reflecting this change in the law, including
    • Amending the regulations to specify that MHCs’ and MFTs’ services, and services incident to those services, are included within FQHC and RHC services; and
    • Adding MHCs and MFTs as practitioners eligible to provide a billable FQHC “visit”
  • The NPRM also includes definitions of MHCs and MFTs as Medicare clinical professionals, and these will apply in both the PFS and FQHC/RHC context. Notably, CMS is proposing that the term “mental health counselor” will be inclusive of clinical professional counselors, licensed professional counselors, and also addiction counselors who are licensed and certified as MHCs and meet applicable supervision requirements.
  • Intensive Outpatient Services. CAA 2023, Div. FF, Section 4124 creates a new Medicare behavioral health service, “intensive outpatient services” (IOP), which may be provided by FQHCs and RHCs, in addition to Medicare community mental health centers (CMHCs) and outpatient hospital departments, effective January 1, 2024. The service is in effect a less intensive version of a current Medicare service, “partial hospitalization.” It is comprised of a bundle of discrete services including, among others, individual and group therapy, occupational therapy, drugs and biologicals for therapeutic purposes which cannot be self-administered, individualized activity therapies, family counseling, patient training and education, and diagnostic services. Provision of the services is conditioned upon a determination that the patient needs at minimum 9 hours of care per week. The new service will be included within “FQHC services,” but it will be paid for through a different methodology – the Medicare outpatient hospital PPS (OPPS). The OPPS NPRM contains numerous changes to the regulations implementing intensive outpatient services, including the following:
    • Adding IOP services to the list of covered FQHC/RHC services in the Medicare regulations;
    • Requiring that an FQHC or RHC physician certify that an individual needs IOP by meeting the IOP certification rules, including that the individual (1) needs at least 9 hours per week of therapeutic services; (2) is likely to benefit from a coordinated program of services, rather than isolated outpatient treatment; (3) does not require 24-hour care; (4) has an adequate support system while not actively engaged with the program; (5) has a mental health diagnosis; (6) is not judged to be a danger to him/herself or others; and (7) has cognitive and emotional ability to participate in the treatment;
    • Proposing to establish as the CY 2024 payment rate methodology for IOP for FQHCs, the rate for the ambulatory payment classification (APC) 5861, which CMS proposes to establish at $284 per diem. This corresponds to an anticipated 3 IOP services per day. Actual Medicare payment to the FQHC would be equal to 80% of the letter of this per-diem rate and the FQHC’s actual charge for the service.
    • Proposing that IOP per diem payments under the OPPS would be eligible for FQHC supplemental payments when furnished to enrollees of a Medicare Advantage organization;
    • Proposing to amend the regulations defining a Medicare FQHC “visit,” to specify that Medicare will not pay for a IOP services on the same day as an FQHC mental health visit, but will pay for IOP services and an FQHC medical visit on the same day.
  • CMS is expressly seeking comment on whether the proposed per diem rate for IOP services within FQHCs and RHCs is sufficient.

Adding New Care Management and Community Health Services Payable on a Monthly Basis

Currently, most services that FQHCs provide under Medicare are paid for under the Medicare FQHC PPS. As to Medicare Part B-covered services that are not within the covered bundle of “FQHC services” paid for under the PPS, CMS has expressly authorized FQHCs to bill separately for some of these services (such as the technical components laboratory and radiology services) under the PFS or other Part B fee schedule methodologies.

Additionally, some services that are nominally within “FQHC services,” such as various care management services, are nonetheless paid for outside the FQHC PPS. Since CY 2015, beginning with Chronic Care Management (CCM) services, CMS has gradually authorized FQHCs to provide to Medicare beneficiaries a range of care management services, for which FQHCs are paid off a fee schedule, according to a rate that represents the national average of the PFS payment codes for the various services included in two G codes, G0511 (general care management) or G0512 (psychiatric collaborative care model). Currently, the code G0511 encompasses four different care management services—CCM, Behavioral Health Integration (BHI), Principal Care Management (PCM), and Chronic Pain Management (CPM)—and is paid for under the monthly rate $77.94 in CY2023. (Medicare’s monthly payment is typically the lesser of 80% of the FQHCs’ actual charge for G0511 or this payment rate.)

One of the more positive developments in the CY2024 PFS NPRM is that CMS proposes to add several new services to the G0511 payment code. First, CMS is proposing to include various service codes associated with Remote Physiologic Monitoring (RPM) and Remote Therapeutic Monitoring (RTM) in code G0511. RPM services include the collection, analysis, and interpretation of digitally collected physiologic data, followed by the development of a treatment plan and management of a patient’s condition(s) under the treatment plan. RTM services involve remote monitoring of respiratory system status, musculoskeletal status, therapy adherence, or therapy response. RPM and RTM each encompass both codes for initial setup and patient education, and codes for professional treatment management. For several years, RPM and RTM codes have been billable by physicians and physician groups under the PFS, but FQHCs have not been authorized to bill separately for these services. CMS is proposing for FQHCs/RHCs to be able to bill for RPM/RTM under G0511 either alone or with other FQHC services on an FQHC claim form.

Additionally, CMS is proposing to include in the bundled G0511 code, payment for Community Health Integration (CHI) and Principal Illness Navigation (PIN) services in FQHCs or RHCs. These two services correspond to new codes that CMS proposes to recognize for CY2024 under the PFS. Generally, CHI services are provided when certified or trained auxiliary personnel (such as community health workers) perform activities to address social determinants of health under the general supervision of the billing practitioner. PIN services are when certified or trained auxiliary personnel support the patient’s health care navigation as part of the treatment plan for a serious, high-risk disease. CMS notes in the PFS NPRM that the addition of the new codes to the general care management set (G0511) would “also support the CMS pillars for equity, inclusion, and access to care for the Medicare population,” as set forth in CMS’ Strategic Plan.

Revision of Monthly Care Management Payment Methodology

CMS further proposes to revise comments on how it calculates the payment amount for G0511. Currently, CMS uses an unweighted average of the various codes included within G0511. Due to the lower clinical intensity of the RPM, RTM, CHI, and PIN services than the existing care management services included in G0511, if CMS continued with that approach, then the addition of the various new codes would result in the reduction of the G0511 payment amount from a monthly rate of $77.94 to a rate of $64.13. CMS proposes instead to use a weighted average (with the weights being borrowed from billing prevalence under the PFS), which would result in a higher rate ($72.98) for the combined code than an unweighted average would. Notably, using FQHC claims history to derive the weighted average is not possible, as CMS does not require FQHCs to use specific payment codes when submitting claims for general care management services. CMS is specifically seeking comment on its proposal to revise the payment rate methodology for G0511.

Changes in Supervision Rules

CMS is also proposing to make several changes relating to required levels of supervision for various FQHC services in CY2024.

General Supervision in Obtaining Beneficiary Consent for Care Management and Virtual Communication

First, CMS is proposing to relax certain requirements relating to beneficiary consent for care management and virtual communication services. Under permanent CMS policy, FQHCs are required to obtain beneficiaries’ consent before the FQHC furnishes these services, and further, consent must be obtained under the direct supervision of the FQHC practitioner. Beneficiary consent is a required component for care management and virtual communication services in part because without being expressly informed that interactions with their FQHC provider under the auspices of these services (many of which are not face-to-face) constitute discrete Medicare services for which coinsurance will be imposed, beneficiaries might not anticipate that they would have coinsurance obligations for the services. During the COVID-19 PHE, CMS revised its policy to allow consent for care management services or virtual communication services to be obtained at the same time that service is initiated, and to allow consent to be procured under the general, rather than direct, supervision of the FQHC clinician. Allowing general supervision meant that the scope of services of vendors furnishing care management on behalf of FQHCs could include securing patient consent, as well as the actual provision of care management services.

In the PFS NPRM, CMS proposes to finalize a policy that would require advance consent by the beneficiary, but would on a permanent basis allow the consent to be obtained under the general supervision of the billing practitioner. In general, this would support a continued prominent role for vendors in furnishing care management services in FQHCs. It bears noting, however, that the rules do contemplate rigorous supervision of care management services by the FQHC practitioners.

Relaxation of Supervision Requirements for FQHC “Incident to” Services

Second, CMS is proposing two separate changes to its rules for so-called “incident to” services. “Incident to” items and services are those services furnished by auxiliary personnel as an incidental, though integral, part of professional services, and typically without charge. Under permanent CMS regulation, “incident to” services must be performed under the direct supervision of the billable clinician, and direct supervision must include the clinician being immediately physically available on the premises to provide assistance and direction while the service is being provided.

CMS proposes first, to amend its regulations to allow virtual presence using two-way, real time audio-visual technology, rather than physical presence, to meet the requirements for FQHC “incident to” services, until December 31, 2024. The timing of the sunset of this flexibility corresponds to the statutory sunset of other virtual supervision and telehealth flexibilities under federal legislation. CMS seeks comment on whether the regulatory definition of supervision of “incident to” services in FQHCs should be permanently revised to include such virtual supervision.

CMS proposes additionally, only for purposes of behavioral health services and on a permanent basis, to permit a standard of general, rather than direct, supervision for “incident to” behavioral health services within the FQHC. This change would bring greater consistency between FQHC requirements and requirements under the PFS; in CY 2023, CMS revised the PFS behavioral health services requirements to allow “incident to” services to be furnished under general supervision.

The proposed changes will likely not result in any significant impact on clinical practices for Medicare services in FQHCs, given the limited role of “incident to” services within the FQHC. While under the PFS, physician groups may separately bill for services performed “incident to” enrolled professionals’ services, separate billing for “incident to” services is not allowed under the FQHC PPS, given that a billable clinician must play a direct role in each qualifying FQHC “visit.”

In general, CMS’ proposals under the PFS and OPPS NPRMs represent progress in recognizing the value of FQHCs’ role as comprehensive care providers for Medicare beneficiaries, and in particular, the vital role of behavioral health and care management in FQHCs.

If you have any questions about either NPRM, contact Susannah Vance Gopalan at or 202.466.8960.

Learn more about the FTLF Team