Health Center Regulatory Issues

CMS Issues Final Rule on Medicaid and Essential Health Benefits

By Roger Schwartz and Arielle Gurwitch

On July 5, 2013, CMS issued a lengthy final regulation (Medicaid and Children’s Health Insurance Programs: Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes, and Premiums and Cost Sharing; Exchanges: Eligibility and Enrollment) which relates to a variety of Medicaid, CHIP and Exchange rules and policies.  We are still in the process of reviewing the final rule, however we have focused our attention on statements in the preamble to the rule in which CMS makes clear that states must provide FQHC services to those single adults who become eligible for Medicaid in January 2014 and that health centers providing such services are to be reimbursed as they are now under Medicaid, that is, under PPS/APM reimbursement.  Essentially, if a state opts to provide Medicaid coverage for low-income single adults, as provided in the Affordable Care Act, they are eligible for a benchmark or benchmark equivalent benefit package, referred to as “alternative benefit plans (ABP),” which packages must include certain benefits.  In the preamble to this rule, CMS states that federal “regulations 42 CFR 440.365 continue to require that a state must provide that individuals enrolled in in an ABP have access, through that coverage or otherwise, to …FQHC services” and that when FQHCs are part of the ABP network, reimbursement must be as provided required under the Medicaid statute.”  This policy is extremely important for current health center patients who now become eligible for Medicaid, as well as the newly eligible population who come to health centers for the first time.  The Medicaid statute, regulations, and rule preamble now seem well aligned to assure FQHC services to new Medicaid eligibles and PPS payment to health centers.  We’ll be sure to share any additional analysis of this important final rule here on the Policy Shop.


  1. This sounds very positive for the FQHCs in the states that have opted to accept the Medicaid expansion. But what is the impact on those states (Wisconsin) that chose not to accept the expansion?

  2. Also, in States that are exploring alternative plans that propose to divert medicaid expansion dollars into private insurance vehicles (Oklahoma, Arkansas) as a way to “really not expand Medicaid or accept ACA Obamacare rules”, will the FQHC reimbursement requirement stand? It is still using Federal Medicaid money to serve uninsured eligible folks under the ACA (and supposedly approved by the Feds as an acceptable alternative) but will be delivered through private insurers. Comments? Thoughts?

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