Understanding the 3 Recent Changes to FQHC and RHC Services Medicaid Payments in New York State

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Freed Maxick Healthcare Consulting Team


Learn how recent updates to the eMedNY System Logic and Medicaid Managed Care (MMC) Wrap Payments will impact FQHCs and RHCs in New York State, and how providers can ensure they receive proper reimbursement.

As we continue into 2023, it is important to stay updated on implementation of certain recent changes made to the Medicaid system in New York State (NYS). These changes may affect healthcare providers who offer Federally Qualified Health Center (FQHC) and Rural Health Clinic (RHC) services to Medicaid patients. In this blog post, we will explore the three major changes that have been implemented and provide insights on how healthcare providers can adapt to these changes.

New York State Medicaid Reimbursement Change #1: Automatic Tagging of FQHC/RHC Medicaid Secondary Claims

Effective from 1st January 2022, the eMedNY System Logic has been updated to automatically tag FQHC/RHC Medicaid Secondary claims for re-processing and payment at the All-Inclusive Rate (AIR). Providers are instructed to continue sending primary payer information with all 837 submissions to NYS Medicaid, where commercial or Medicare primary coverage was active and resulted in third-party payment.

It is important for providers to ensure that all FFS take-backs (and subsequent payments to "top up" to the AIR) are completed properly. We recommend reviewing the entire set of Calendar Year 2022 (service date) claims data to ensure no leakage due to the eMedNY system operational changes.

New York State Medicaid Reimbursement Change #2: Submission of Commercial Payments for Wrap Claims

Medicaid Managed Care (MMC) Primary Plans in NYS often pay less than the FQHC/RHC Medicaid Rate (whether cost-based or prospective). To bridge this gap, NYS DOH is required to pay the difference between what the MMC plans pay interimly and the higher Medicaid FFS rate through supplemental "Wrap" payments. Claims have historically been submitted with all commercial (including Medicaid Managed Care) payment data directly to the NYS DOH. Providers are now being asked not to submit commercial payments with Wrap Claim submissions (which are tagged at submission by entering Rate Code 1609).

This new method of reporting dovetails with another change that will carry administrative burden to providers. Healthcare providers should be aware of this new change and ensure that their billing and payment processes are adjusted accordingly.

New York State Medicaid Reimbursement Change #3: Inclusion of 3rd Party Commercial Payment Data in MCVR Reports

Annual Managed Care Visit and Revenue (MCVR) Reports will now be required to contain ALL 3rd Party Commercial payment data, which will be folded into the MMC Average Rate Calc. Both the MMC Average Rate Per Claim and Blended Medicaid (FFS) Payment Rate are harvested from the MCVR Report. The difference in these two figures will drive the Supplemental "Wrap" payments mentioned above.

The MCVR filed by July 1, 2023, will report information for the Claims Service Date Period 1/1/2022 – 12/31/2022. Once compiled and reviewed by the DOH, the Wrap payment rates will be applied to Claim Service Date Period 10/1/23 – 9/30/2024.

How We Can Help with New York State Medicaid Reimbursement

It is important for healthcare providers to perform a detailed scrub of the commercial 3rd party payment data to ensure that the MMC Average Rate is not overstated. Such overstatement will reduce the supplemental payment on EACH claim during the Claim Service Date Period ending 9/30/2024.

At Freed Maxick, we can provide this scrub, as well as additional insights on rate optimization. We have a team of healthcare consulting experts who can help healthcare providers navigate these changes and optimize their rates. If you are interested in learning more, please contact Clinton Ballew - Senior Manager at Freed Maxick CPA's P.C. at Clinton.Ballew@freedmaxick.com or 205-936-4345.

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