A federal court has ruled that Puerto Rico's Medicaid agency violated the statutes governing payments to federally qualified health centers (FQHC). The issue is the formula used to calculate "wraparound payments" that must be made to FQHCs to make up the difference between rates paid under the new prospective payment system or by managed care organizations and their costs. Under Soc. Sec. Act §1902(bb), the payment is determined by the average cost per visit during a base year, adjusted for inflation, multiplied by the number of visits in the year for which the payment is made.
Defining visit
The statute does not define the term "visit." The agency argued that all of the encounters that a Medicaid recipient received at a clinic in one day comprised a visit. The providers contended that every encounter with a healthcare professional was a separate visit.
The clinics cited a Medicare regulation that defined "visit" as "face to face encounter between a clinic or center patient and a physician, physician assistant, 'or' nurse practitioner…." However, that regulation did not address multiple encounters in a single day. The court declined to expand the interpretation without clearer direction in the statute.
The clinics' second contention was more successful. The agency's formula subtracted all capitation payments the clinics received from managed care organizations. However, the Court of Appeals had ruled in Río Grande Community Health Center, Inc. v. Rullán that the entire capitation payment could not be considered because portions of the payment must be paid to other providers or suppliers who have arrangements with the clinic. The agency's formula was inconsistent with that ruling.
The Rio Grande ruling was binding on the parties and the court because the Court of Appeals had interpreted the statute; the particular procedure by which the appeal came before the court did not alter the binding effect of the ruling. The agency's request for judgment as a matter of law was denied.
Source: Ponce v. Perez Perdomo, D. P.R., June 4.
For more information on this and related topics, consult the CCH® Medicare and Medicaid Guide.
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