Medicare PPS Base Rate & G-Codes for 2017: What FQHCs Need to Know

AAFCPAs would like to make health center clients aware that the Centers for Medicare & Medicaid Services (CMS) recently updated the federally qualified health centers (FQHC) prospective payment system (PPS) base payment rate and the geographic adjustment factors (GAF) for 2017. AAFCPAs advises clients that now is the time to re-evaluate the charges that were established for the 5 payment codes known as G-codes, and to revisit the FQHC’s regular fee schedule.
Most FQHCs have been billing Medicare for over a year now using the PPS, and tracking the bundle of services furnished during an encounter.  Your charges were most likely established using what management deemed to be a reasonable cost at that time based on the cost report schedules. However, at that time, the cost report filed annually by FQHCs calculated a cost for all services rendered by the FQHC, and did not break out the cost to distinguish whether the service rendered was a medical or mental health service.
FQHCs are now in a better position to establish accurate and well-supported G-codes, which could result in opportunities to optimize your reimbursements from Medicare.  Alternately, a re-evaluation may determine that you over-stated your rates, and you should adjust now to avoid future liability.
AAFCPAs encourages FQHCs to re-evaluate the charges that were previously set for each G-code in response to the following:

• You now have a better cost report format that gives you a better breakout of each type of costs;
• Through G-codes, you now have improved tracking of the bundle of services furnished during an encounter;
• There is an updated 2017 FQHC PPS base rate, which reflects a 1.8% increase above the 2016 base payment rate; and
• There is an updated 2017 geographic adjustment factor (GAF) based on the geographic practice cost indices (GPCIs) used to adjust payment under the Medicare physician fee schedule.

AAFCPAs has been providing critical guidance to our FQHC clients transitioning to the new Medicare Prospective Payment System (PPS) methodology, effective in 2014.  We continue to help clients optimize reimbursements under this new payment methodology, and keep up-to-date with annual changes implemented by the Centers for Medicare and Medicaid Services (CMS).  Read more.
AAFCPAs has been helping healthcare entities succeed since our founding in 1973. If you have any questions, please contact your AAFCPA partner, or Matt Hutt at 774.512.4043, mhutt@aafcpa.com.