FQHC Change in Scope of Service - Pennsylvania Association of ...

FQHC Change in Scope of ServiceRyan Paul, Senior Healthcare Program AnalystBureau of Fee-for-Service Programs

FQHC Change in Scope of ServicePurpose and Scope• On June 20 th 2012, the PA Medical Assistance (MA) Program issued MA Bulletinnumber 08-12-31.• The purpose of this bulletin was to notify Federally Qualified Health Centers(FQHCs) of the procedure for notifying the Department of Public Welfare(Department) of a change in scope of services and the process to adjust theProspective Payment System (PPS) rate(s).• This bulletin also notified FQHCs of updates to the FQHC Provider Handbook,Appendix E that reflect the change in scope of services procedure.• This bulletin applies to all Medical Assistance (MA) Program enrolled FQHCsrendering services to MA recipients in the Fee-for-Service and managed caredelivery systems.

FQHC Change in Scope of ServiceBackground• FQHCs seeking to change the scope of services they provide must request achange in scope of services through the Health Resources and ServicesAdministration (HRSA).• The HRSA Policy Information Notice (PIN) 2008-01 provides that HRSA will eitherapprove or deny the FQHC’s request for a change in scope of services within 60days of the date a complete request is received.• A change of scope for purposes of the HRSA Notice of Grant Award is not the sameas change of scope of services for purposes of the MA Program.

FQHC Change in Scope of ServiceBackground (Cont’d)• The Department defines a change in scope of services as the addition of a servicethat has never been provided or the discontinuance of an existing service.• Other changes, including the opening or closing of a service location, a change inthe intensity of a particular service, or capital expenditures, do not qualify as achange in scope of services.• In addition, an increase or decrease of provider’s costs does not constitute achange in scope of services.

FQHC Change in Scope of ServiceNotification to the Department• If HRSA approves a request for a change in scope of services involving the additionof a service that has never been provided or the discontinuance of an existingservice, the FQHC must:• Notify the Department of the change in scope of services within 30 days ofthe issue date identified in block 1 of HRSA’s Notice of Grant Award, so thatthe Department can begin the PPS rate(s) adjustment process.

FQHC Change in Scope of ServiceEffective Date• The effective date of the rate adjustment based on the change in scope of serviceswill be the effective date specified in the Notice of Grant Award from HRSA,provided the Notice of Grant Award approving the change in scope of services isreceived by the Department within 30 days of the issue date identified in block 1 ofthe Notice of Grant Award.• If the HRSA Notice of Grant Award is not received by the Department within 30days of the issue date identified in block 1, the effective date of the rate adjustmentwill be determined by the Department.• Until a final rate is determined, the FQHC’s existing rate(s) will be considered aninterim rate(s).

FQHC Change in Scope of ServiceFinal Rate Adjustment• FQHCs must submit a cost report within 120 days after the close of the FQHC’sfirst full fiscal year of operation with the change in scope of services.• The cost report must include the FQHC’s actual costs for the full fiscal year.• If the FQHC is unable to submit a cost report within the 120 day timeframe, theFQHC may request one thirty-day extension for submission of the cost report bynotifying the Department in writing at the address listed below at least one businessday prior to the cost report submission due date.• The request must detail why the extension is necessary.• The Department will deny an FQHC’s request for a thirty-day extension forsubmission of the cost report, if the FQHC does not demonstrate good cause forthe extension.

FQHC Change in Scope of ServiceFinal Rate Adjustment (Cont’d)• The FQHC’s final rate(s) will be determined via a desk review and/or audit of theFQHC’s cost report.• The FQHC will be notified in writing of its final PPS adjusted rate(s), uponcompletion of the desk review and/or audit.• The final rate(s) will be used for final reconciliation and will be the prospectivepayment rate(s) going forward.• The notice will include information regarding the FQHC’s appeal rights.

FQHC Change in Scope of ServiceFinal Reconciliation• In accordance with 55 Pa.Code §1101.69 (relating to overpaymentunderpayment),the Department will use the final reconciliation process toreimburse the FQHC for any underpayment or to recover any overpayment basedon the difference between its final PPS rate(s) and interim rate(s).• If the FQHC receives an overpayment, a uniform period will be established for therecoupment of the overpayment from the FQHC, according to the guidelinesestablished in 55 Pa.Code §1101.69a (relating to establishment of a uniformperiod for the recoupment of overpayments from providers).

FQHC Change in Scope of ServiceStub Period• When the effective date of a change in scope of services differs from the first dateof an FQHC’s fiscal year, a “stub” period is created.• The “stub” period is the effective date of the change in scope of services throughthe last day of the provider’s fiscal year.• All “stub” periods will undergo final reconciliation to the regular rate(s), establishedfrom the first full year of the FQHC’s operation with the change in scope of services,less the Medicare Economic Index percentage for the applicable rate year.Example of a “stub” period:• The FQHC’s request for change in scope of services is approved by HRSA with aneffective date of September 1, 2011.• The provider’s fiscal year runs from January 1, 2011 through December 31, 2011.• In this example, the “stub” period runs from September 1, 2011 through December31, 2011.

FQHC Change in Scope of ServiceInterim Rate Adjustment• The FQHC may request an interim rate adjustment, pending the determination offinal rates based on a change in scope of services.• The Department will review the rate adjustment request and the FQHC’s submitteddocumentation.• If the documentation indicates that the PPS rate would be increased by more than20%, the Department will make an interim PPS rate adjustment.• The FQHC will be notified of the Department’s decision on the request for aninterim rate adjustment.• The notice will include information regarding the FQHC’s appeal rights.

FQHC Change in Scope of ServiceInterim Rate Adjustment (Cont’d)• To request an interim rate adjustment, providers should submit:1. a cost report containing the most recent fiscal year’s actual costs;2. a detailed budget of the projected costs expected to be generated by the newservice(s);3. the number of projected encounters expected to be generated by the newservice(s).• If the FQHC’s request is denied, the Department will determine the final rate after itreceives the cost report with the FQHC’s actual costs from the first full fiscal year ofoperation reflecting the change in scope of services and has performed a deskreview, and/or audit of the cost report.

FQHC Change in Scope of ServiceProcedure• The FQHC must submit the following, within 30 days of the issue date identified inblock 1 of HRSA’s Notice of Grant Award:1. a copy of the HRSA Notice of Grant Award approving a change in scope of services; and2. a cover letter to the Department that describes the service that has been added ordeleted from the FQHC’s scope of service, and the effective date.• All of the above items are to be submitted to the Department at the followingaddress:DPW/OMAP/BFFSPDGS ComplexCherrywood Building49 Beech DriveHarrisburg, Pennsylvania 17110Attention: Division of Rate Setting

FQHC Change in Scope of ServiceProvider Handbook Updates• The FQHC Provider Handbook has been updated to include a procedure for aFQHC’s PPS rate adjustment(s) based on a change in scope of services.• FQHCs must follow this procedure to obtain a PPS rate adjustment(s) as a result ofa change in scope of services.• FQHCs may view the “Change in Scope of Services Procedure for FederallyQualified Health Centers”, in Appendix E of the FQHC Provider Handbook, byaccessing the following website link:http://www.dpw.state.pa.us/ucmprd/groups/webcontent/documents/document/s_001850.pdf• FQHCs that do not have access to the internet may request a hard copy ofAppendix E of the on-line FQHC Provider Handbook by contacting the Division ofRate Setting at (717) 265-7831.

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