The Capitol as seen in Washington, Thursday, April 29, 2021. (AP Photo/J. Scott Applewhite)

Legislation designed to prevent further financial instability for rural health clinics passed in the Senate, and soon after cleared the House.

The bipartisan Strengthening Rural Health Clinics Act of 2021, introduced by U.S. Senators Mark Warner (D-Virginia) and Roy Blunt (R-Missouri), fixes a technical issue to protect existing rural health clinics from a sudden, unexpected Medicare payment rate change that was included in the December 2020 Covid-19 relief bill.

Provisions of that bill, specifically Section 130 of the Consolidated Appropriations Act of 2021, had increased the per visit upper payment limit from $87.52 to $100 starting April 1, 2021.

Because rural health care organizations are more heavily dependent on Medicare and Medicaid, the provisions could have a potentially huge impact on the financial health of rural health clinics.

The bill also included a “grandfathered in” provision allowing existing clinics to stay at those adjusted payment rates. However, the exclusion in the bill ended up only applying to rural health clinics in existence prior to December 2019. The technical error ended up excluding hundreds of clinics nationwide that were established after December 2019, as well as clinics that were in the “mid-build” phase.

The provision affected nearly 30 rural health clinics in Virginia alone, Representative Warner said, including more than a dozen clinics that are part of the Carilion Clinic Family Medicine group, Shenandoah Medical Associates and New Warren Memorial Hospital Campus in Fort Royal, Virginia, and Valley Health Family Practice in Rutherford Crossing, Virginia, among others.

“In the past year, rural health clinics have played an essential role in bringing urgent and lifesaving care to some of our most vulnerable communities,” Warner said in a statement. “Unfortunately, this crisis has served to further throw these facilities into financial distress. By fixing a legislative error, our bill will help avoid further financial volatility and allow rural health clinics in Virginia and across the country to continue serving the communities that need it the most.”

Warner’s legislation amended the existing law to include “any qualified rural health clinic that was in existence, in ‘mid-build’, or that had either submitted an application or had a binding written agreement with an outside unrelated party for the construction, purchase, lease or other establishment of such a rural health clinic prior to December 31, 2020.”

“Rural health clinics are the lifeblood of healthcare delivery in these rural underserved areas,” said Mark Nantz, President & CEO of Valley Health System. “Ensuring that Rural Health Clinics receive proper reimbursement is critical to their continued sustainability. This legislation addresses the concerns of many across the country that were developing rural clinics in previous years and will go a long way in protecting access to care in these communities which is especially important during the pandemic.”

The House included Warner’s bill in another bill – H.R. 1868 – which delays until the end of 2021, a planned cut to Medicare that would have affected all health care providers. 

Expectations that H.R. 1868 would pass were so strong that the Centers for Medicare and Medicaid Services announced in late March that it would hold all Medicare claims after April 1 until the bill was acted on to prevent providers from having to resubmit claims. 

The Senate-passed version of H.R. 1868 also included ‘under 50-bed’ rural health clinics in existence before December 31, 2020, ‘under 50-bed’ hospital entities that submitted applications to become a rural health clinic prior to December 31, 2020 and established a methodology for setting the upper payment limits for grandfathered entities that did not get Medicare or Medicaid reimbursement in 2020. It became law on April 14, 2021.

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