Health Center Regulatory Issues

2016: A Regulatory Year in Review

NACHC’s Regulatory Affairs Department has seen a lot of action over the last year, as the current Administration is wrapping up its remaining days in Washington, DC and has been working to propose and finalize a wide range of policy and administrative activities.

Highlights have included:


  • The final rule governing Medicaid Managed Care Plans: This is the first regulations on Medicaid Managed Care that CMS has finalized in years and covers policies guiding all areas of Medicaid Managed Care, including contract reviews and setting rates.  There were several items of importance for FQHCs including:
    • Clarifying rules about health center’s participation in value based payment arrangements in Medicaid Managed Care
    • Clarifying that incentive payments must be in addition to PPS, not in place of.
  • CMS State Health Officials Letter issued on PPS wrap around payments in Medicaid Managed Care
    • States may choose to “delegate” wrap around payments, only if the arrangement meets all of the requirements of an Alternative Payment Methodology (APM).
  • Medicare Physician Fee Schedule Final Rule: While this rule largely does not impact FQHC Medicare payments, it included several important provisions for FQHCs:
    • Implementation of an FQHC- specific market basket to be used as an annual inflation update for the Medicare PPS, in place of the Medicare Economic Index (MEI). This goes into effect January 2017
    • Easing the requirements for FQHCs to bill for chronic care management
  • The final rule on MACRA implementation: This is a major revision of the Medicare Part B payment system, which includes implementation of MIPS and Advanced Alternative Payment Methodologies (APM).  FQHC Medicare payment is not impacted by this new rule, but health centers are encouraged to voluntarily report these measures to demonstrate the quality of care they are providing to Medicare beneficiaries.
  • Process for enrolling new sites in Medicare: We continue to ask CMS to streamline the process for new FQHC sites to enroll in Medicare, and recently learned that they have taken steps to do so, by establishing a standardized – and much simpler – protocol for Regional Office reviews.  More information on this coming soon.


  • Draft Health Center Compliance Manual In August, BPHC published its long-awaited draft of the Compliance Manual, which consolidates many existing PINs and PALs into a single resource with information about requirements and how to demonstrate compliance.  NACHC was supportive of BPHC’s efforts, and submitted extensive comments about how the document could be further strengthened and clarified.
  • Further changes proposed for auto-HPSA scoring: In July, HRSA’s Bureau of Health Workforce proposed changes intended to standardize and automate the process for determining auto-HPSA scores.  Among other changes, they propose to :
    • measure poverty among a health center’s patient population by using Census data for those areas located 30-minutes or less from each site
    • assign scores at the site level rather than the organizational level.

NACHC has significant concerns about both of these proposals, as discussed in our comments.  We have met with BHW staff on several occasions to discuss our concerns and are currently participating in a Workgroup to address them.  We also continue to monitor other developments impacting shortage designations, including issues around provider data.

  • No new 340B policies – but lots of questions: HRSA’s Office of Pharmacy Affairs published two proposed regulations around 340B (both on relatively minor issues), but to date neither has been finalized.  Most notably, the draft mega-guidance – published in August 2015 – has not been finalized.  In addition, CMS’s final rule on Medicaid managed care provided no clarity around the relationship between Medicaid managed care and 340B.  Nonetheless, the scrutiny on 340B continues to intensify, and health centers are finding it increasingly difficult to retain savings associated with 340B.  Also, NACHC continues to work with the 340B office to streamline the process for new health center sites and pharmacies to become eligible for 340B.
  • FTCA: NACHC staff have met with and written to HRSA leadership requesting clarity and/or a streamlined process to confirm that FTCA covers specific types of services provided to non-patients (e.g., writing prescriptions for Naloxone for patients to give to family members) and telemedicine “touches.”  We are waiting for an official response from HRSA.



  • Increasing how many patients a provider can treat with Medication Assisted Treatment (MAT): As many of you are dealing with the opioid epidemic in your communities, the Substance Abuse and Mental Health Services Administration (SAMHSA) increased the cap on the number of patients that a physician can treat using MAT, up from 100 to 275.   In addition, it is working on additional information on the implementation of the Comprehensive Recovery and Addiction Act, which would allow physicians assistants and nurse practitioners to use MAT.
  • SAMSHA is seeking to make improvements in privacy policies for patients seeking treatment for substance use disorder (42 CFR Part 2). To date, it has only released a proposed rule (see NACHC comments) that would update these regulations to consider improvements in health care to more appropriately integrate patient information, while maintaining appropriate privacy regulations.

It has been a busy, but important year in Regulatory Affairs and with a new Administration coming into office, we expect 2017 to be just the same.  We want to thank you all for your time and attention in helping to formulate NACHC’s position on these rules and regulations and look forward to working with you in the New Year.   And don’t forget – you can always find up to date information and resources on our Regulatory Affairs site.


Happy Holidays!

Colleen and Susan