Starting April 1, RCHs (rural health clinics) are to start using Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) codes in filing their claims. While this may seem fairly straightforward, the Centers for Medicare & Medicaid Services (CMS) is having a difficult time in making decisions about correct coding and billing in this area. Questions about the applicability of the NCCI (National Correct Coding Initiative) edits, the NCCI coding policy manual, and the use of modifiers such as the -25 and -59 continue to be asked.

Note that there are two different types of RHCs: provider-based and independent. Our discussion will address provider-based RHCs that file a UB-04 claim.

First, a little background information on RHCs, particularly how they bill and are paid under the Medicare program:

  1. RHCs are cost-based reimbursed, and thus the cost report is all-important.
  2. The unit of payment for RHCs is a visit, which then drives the determination of what is called the all-inclusive rate, or AIR. The AIR is different for each RHC based upon the services provided and the given RHC’s cost report.
  3. RHC coding and reimbursement has, in the past, generally been lumped in with FQHCs (Federally Qualified Health Centers); however, FQHCs now have gone to their own prospective payment system (PPS), so the reimbursement mechanism is now quite different between these two types of rural providers.
  4. Because reimbursement historically has been based on the AIR, the main purpose of filing claims was to establish appropriate charges for a visit that then could be converted to costs using the CCRs (cost-to-charge ratios) from the cost report. Because the charges for each visit was the main piece of information used for calculating reimbursement, there was no particular overriding need to code.
  5. Of course, copayments and deductibles are an issue. Generally, there is a 20-percent coinsurance of the charges issued for the given visit.
  6. Now that certain services are being broken out for separate payment (e.g., preventative services), and also because some services may not be subject to coinsurance, there is a need to code by line item on the UB-04.

The critical definition is this: what constitutes a visit? In some cases, the converse question is also important: what does not constitute a visit?

A visit generally involves a medically necessary medical service, a mental health visit, or a qualified preventive health visit. The visit must involve a face-to-face encounter between the patient and the RHC practitioner. Transitional care management (TCM) can also be construed as a visit, as can preventive services such as the initial preventive physical examination (IPPE) and the annual wellness visit (AWV). See Chapter 13 of the Medicare Benefits Policy Manual for a complete listing.

What does not constitute a visit? Well, one of the best examples is that of a minor surgical procedure performed on a date on which there is no eligible visit provided and billed. For example, a patient might present on Monday, receive evaluation and management services, and then come back on Friday to have a minor surgical procedure (e.g., removal of a benign lesion). Because there was no visit on Friday, the ability to charge for the lesion removal becomes moot because there is no visit charge into which the surgical charge can be included. Here is a statement from the IOM Medicare Benefits Policy Manual, Section 40.4, as revised by Transmittal R220BP:

“Surgical procedures furnished in a RHC or FQHC by a RHC or FQHC practitioner are considered RHC or FQHC services. Procedures are included in the payment of an otherwise qualified visit and are not separately billable. If a procedure is associated with a qualified visit, the charges for the procedure go on the claim with the visit. Payment is included in the AIR when the procedure is furnished in a RHC, and payment is included in the PPS methodology when furnished in a FQHC. The Medicare global billing requirements do not apply to RHCs and FQHCs, and global billing codes are not accepted for RHC or FQHC billing or payment.”

While there are several issues raised in this quote, it would appear that procedures (presumably, surgical procedures) are not separately billable. But what does this mean? For our example of the surgery occurring on Friday with the visit occurring on Monday, how should this be (or not be) coded and billed? Should the claim be held from Monday until the surgical procedure is provided on Friday so that the surgical charge can be rolled into the visit charge? However, with the new coding requirement that there be a separate line item with a code, what date should be used?

Let us take another example, this time with physical or occupation therapy (PT/OT). An encounter for a PT or OT service does not constitute a visit for the purposes of establishing the AIR payment rate. If the PT/OT service is provided on the same date as a visit, then the charges can be rolled into the visit charges. But what if the PT/OT services are provided on a different date? Here is some guidance found in the IOM Medicare Benefits Policy Manual, Section 180, as revised by Transmittal R220BP:

“If the services are furnished on a day when no otherwise billable visit has occurred, the PT or OT service provided incident to the visit would become part of the cost of operating the RHC or FQHC. The cost would be included in the costs claimed on the cost report and there would be no billable visit.

If a PT or OT therapist in private practice furnishes services in a RHC or FQHC, all associated costs must be carved out of the cost report.”

The new billing requirement is that each line on the UB-04 must how have a CPT/HCPCS code along with an appropriate revenue code. With some exceptions, the charges are supposed to be rolled up into the visit charge. An example where the charges are not rolled up is with a telemedicine originating site charge that uses the Q3014 HCPCS code, along with Revenue Code 0780. The current payment for an originating site is $25.10.

Let us take a simple example that is a slight modification of an example given in MM9269:

FL 42 – Rev Code


FL 45 – DOS

FL 46 – Units

FL 47 – Total


























Now, let us assume that the usual charge for 99213 is $95. What will be the total with the first line item? Everything will have to be rolled up to $95 + $50 + $150 + $10 = $305. This is for the line item for the visit, that is, the 99213, which will go into the process for determining the overall AIR. What about the total of all line items? Should that be $305 + ($50 + $150 + $10) = $515? If so, is there not a double-counting of line items two through four?

Of course, we will need to properly calculate the copayment and check for the applicability of any deductibles. Here is what Section 220.2 of Chapter 13 of the Medicare Benefits Policy Manual indicates: 

“When one or more qualified preventive service(s) is provided as part of a RHC visit, charges for these services must be deducted from the total charge for purposes of calculating beneficiary copayment and deductible. For example, if the total charge for the visit is $150, and $50 of that is for a qualified preventive service, the beneficiary copayment and deductible is based on $100 of the total charge, and Medicare would pay 80 percent of the $100, and 100 percent of the $50 (minus any deductible). If no other RHC service took place along with the preventive service, there would be no copayment or deductible applied, and Medicare would pay 100 percent of the payment amount.”

The normal coinsurance is 20 percent of the charges. However, there are some services that have no coinsurance and for which the deductible may also not apply. In our billing example above, G0101 is preventative, so there is no copayment. But what about laceration repair (12002) and venipuncture (36415)? Will these items also need special consideration? Somehow, someone is going to have to calculate the proper copayment amount and check for any applicable deductible.

Other questions that are raised include this: what happens if there are two visits on the same date of service? Presumably, the two visits would be for different reasons. The guidance is to use the -59 modifier to separate the two visits.

What about using the -25 modifier? There is no mention of this in the guidance. In normal clinical coding situations, the -25 modifier would be used to separate an E/M service (i.e., a visit) from some other associated service such as a minor surgical procedure or possibly even something like a venipuncture. Of course, the NCCI Coding Policy manual prohibits the use of the -25 modifier to separate an E/M service for a minor surgical procedure if performed on the same date.

The bottom line? Movement of RHCs to CPT/HCPCS coding is not at all straightforward. RHCs should be watchful for additional guidance that probably will be issued in the coming months.

Being compliant relative to proper coding and billing for RHCs will be a challenge.

About the Author

Duane C. Abbey, Ph.D., CFP, is an educator, author and management consultant working in the healthcare field. He is president of Abbey & Abbey Consultants, Inc., which specializes in healthcare consulting and related areas. His firm is based in Ames, Iowa. Dr. Abbey earned his graduate degrees at the University of Notre Dame and Iowa State University.

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