Developing Hospital-Physician Linkages through the Rural Health Clinic Program

1. Developing Hospital-Physician Linkages through the Rural Health Clinic Program An Integration Strategy for CAHs

2. Agenda • A Brief History of the Rural Health Clinic Program • Program Requirements • Independent vs. Provider-Based • Reimbursement Basics • Strategic Issues • Case Examples • Conclusions Rural Health Consultants, Inc.

3. A Brief History of the Rural Health Clinic Program • Established in 1977 through P.L. 95-210 • Purpose: • To increase the availability and accessibility of primary care services in underserved rural communities through enhanced reimbursement and creation of practice opportunities for mid-level practitioners Rural Health Consultants, Inc.

4. A Brief History of the Rural Health Clinic Program • Explosive program growth in early 1990s • More than 1,000 RHCs certified in the 18 months from Oct 1993-March 1995 • From 1990-1995, the number of RHCs increased by more than 650% • Currently about 3,300 RHCs located in 47 States Rural Health Consultants, Inc.

5. What is a Rural Health Clinic? • A clinic/office that is engaged principally in the provision of outpatient primary medical care • Meets location, service, and other requirements Rural Health Consultants, Inc.

6. RHC Program Requirements: Location • Census Bureau defined non-urbanized area • Designated within the past 3 years as:* • Federally designated Health Professional Shortage Area (HPSA), or • Federally designated Medically Underserved Area (MUA), or • Governor designated shortage area Rural Health Consultants, Inc.

7. RHC Program Requirements: Staffing • Physician • Provides medical direction • Supervises clinical staff • Participates in development of P & P • Reviews patient records • Provides patient care • Mid-level practitioner • PA, NP, or CNM onsite and available to see patients at least 50% of the time the clinic is open for patient care Rural Health Consultants, Inc.

8. RHC Program Requirements: Physical Plant • May be permanent or mobile • May be a stand-alone building or a designated space within another facility • Designation is site specific Rural Health Consultants, Inc.

9. RHC Program Requirements: Core Services • Diagnostic and therapeutic services commonly furnished in a physician’s office • Six basic lab tests: • Chemical examination of urine • Hemoglobin or hematocrit • Blood sugar • Examination of stool for occult blood • Pregnancy test • Primary culturing for transmittal Rural Health Consultants, Inc.

10. RHC Program Requirements: Written Policies & Procedures • Developed by physician, mid-level, and clinician who is not a member of the clinic staff • Describes services provided directly by clinic staff or through arrangement • Provides guidelines for medical management of health problems • Provides for keeping of patient medical records and privacy of these records • Reviewed annually Rural Health Consultants, Inc.

11. RHC Program Requirements:Quality Assurance • Must maintain Quality Assessment and Performance Improvement (QAPI) Program* • Evaluate clinical effectiveness, access to care, and patient satisfaction • Measure, analyze, and track processes of care and clinic operations Rural Health Consultants, Inc.

12. Types of RHCs • Independent or Free-Standing (I-RHC) • Provider-Based (PB-RHC) Rural Health Consultants, Inc.

13. Independent RHC • An independent clinic/practice that is owned and operated by a physician, NP, PA, CNM, for-profit entity, or not-for-profit entity, consistent with state corporate practice of medicine laws Rural Health Consultants, Inc.

14. Provider-Based RHC • An “integral and subordinate” unit of a Medicare certified hospital, CAH, SNF, or home health agency • PB-RHC conforms to hospital policies and procedures • Chain of command between nursing and office staff at PB-RHC and appropriate personnel at hospital • Certification inspections and process conform to hospital procedures, etc. Rural Health Consultants, Inc.

15. Provider-Based RHC • Meets “provider-based” requirements • May be on-campus or at a remote location • Within 35 miles (except when main provider is a rural hospital with less than 50 beds) • Operates under ownership, administrative, and financial control of the main provider • Clinical services and financial operations are integrated with main provider, etc. Rural Health Consultants, Inc.

16. PB-RHC: Medicare Payment Hospital > 50 Beds • Cost per visit rate (does not include x-ray and lab) • Cap on payment per visit, annually adjusted • 2004 cap = $68.65 • Productivity standards (apply to employed providers) • 1 FTE Physician = 4,200 visits per year • 1 FTE Mid-Level = 2,100 visits per year Rural Health Consultants, Inc.

17. PB-RHC: Medicare Payment CAH/Hospital < 50 Beds • Cost per visit rate (does not include x-ray and lab) • No cap • Productivity standards (apply to employed providers) Rural Health Consultants, Inc.

18. Provider-Based RHC:Medicaid Payment • Prospective per visit rate, based on: • For existing RHCs: • Average of 1999 and 2000 rates • For new RHCs: • Average rates of similar clinics, or • Actual first year costs • Rate established in first year, then annually adjusted • Check with State for operational details Rural Health Consultants, Inc.

19. PB-RHC Strategic Questions • Is the mission of the hospital to assure access to primary care? • Are additional networking opportunities part of the strategic plan? • Is a current shortage area designation in place? • Are mid-level practitioners available? Rural Health Consultants, Inc.

20. PB-RHC Strategic Questions • Does the hospital have the expertise to manage a primary care practice? • Is physician-hospital integration desirable? • Are medical staff interested/supportive? • Should physicians be employed or contracted? Rural Health Consultants, Inc.

21. Financial Impact of Addition of PB-RHC to CAH Rural Health Consultants, Inc.

22. Conclusions: Benefits • Bringing a PB-RHC into a CAH creates opportunities for: • Assuring that primary care is available locally • Vertical integration with physicians • Enhanced Medicare and Medicaid payment • Diversion of primary care from CAH Emergency Department • Enhanced recruitment/retention through hospital-physician network with aligned incentives Rural Health Consultants, Inc.

23. Conclusions: Cautions • Doesn’t always result in financial benefits • Feasibility assessment is essential! • Productivity matters • Create incentives for clinicians • Organizational changes can be complex and disruptive Rural Health Consultants, Inc.