Q&A: Calculating RHC payment

Q: How does CMS calculate payments to rural health clinics (RHC) subject to the all-inclusive rate (AIR)?

A: Each calendar year (CY), a single deductible is established for Medicare Part B services, including RHC services. The Part B deductible for CY 2021 is $203. During CY 2021, a Medicare beneficiary must generally pay for the first $203 of Part B covered services before Medicare begins to pay. After the deductible is met, Medicare will pay all independent RHCs and provider based (PB) RHCs with 50 or more beds the lesser of 80% of their AIR or 80% of the RHC national upper payment limitation amount. For dates of service on and after April 1, 2021 and subsequent CYs, Medicare will pay excepted PB RHCs the greater of 80% of their Medicare Economic Index-adjusted AIR or 80% of the otherwise applicable RHC national upper payment limitation amount after the deductible is met.

For more information, see "Note from the instructor: Changes to RHC reimbursement for CY 2021 and beyond" by Judith L. Kares, JD.