Key Update for FQHCs and RHCs: Medicare Coverage for IOP Services
Starting January 1, 2024, a notable change comes into effect for Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) with the introduction of Medicare coverage and payment for Intensive Outpatient Program (IOP) services. This change, established by Section 4124(c) of the Consolidated Appropriations Act of 2023 (CAA, 2023), specifically addresses the mental health needs of patients through IOP services.
What Are IOP Services?
IOP services represent a structured outpatient program offering psychiatric services to patients with acute mental illnesses, including conditions like depression, schizophrenia, and substance use disorders. These services are now recognized and reimbursed by Medicare at rates comparable to those provided by hospitals, ensuring that costs for IOP services do not influence the payment calculations under the RHC all-inclusive rate (AIR) methodology or the FQHC prospective payment system (PPS).
The Scope of IOP Benefits
The IOP benefit encompasses a range of services including:
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Individual and group therapy by qualified mental health professionals
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Occupational therapy and services provided by social workers and trained psychiatric nurses
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Therapeutic drugs and biologicals
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Family counseling and patient education directly related to treatment
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Diagnostic services
IOP Certification and Payment
For an IOP service to be eligible for Medicare coverage:
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Services must be part of a written plan of treatment established by a physician
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The plan must include a minimum of 9 hours per week of therapeutic services
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Reviews of the plan must occur at least every other month
The payment rates for IOP services are set at $259.13 for RHCs, based on a 3-services-per-day hospital-based per diem amount. FQHCs will receive the lesser of their actual charges or the established payment amount. For tribal FQHCs grandfathered under the program, payments align with the Medicare outpatient per visit rate established annually by the Indian Health Service (IHS).
Coding and Billing Requirements
Billing for IOP services requires specific codes:
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Condition code 92 for intensive outpatient claims
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Revenue code 0905 for IOP services billing
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The inclusion of at least one service from List A Primary Services for claim payment
Supplemental Payments for FQHCs
FQHCs contracting with Medicare Advantage organizations that receive a lower rate than Medicare would otherwise pay for FQHC services are eligible for a wrap-around payment from Medicare to cover the difference. This ensures FQHCs are compensated at least the Medicare amount for their services.
Impact on Multiple Visits
Encounters involving multiple health professionals or multiple encounters with the same health professional on the same day are considered a single visit, except under specific circumstances. IOP services provided on the same day as a mental health or medical visit are covered under Medicare Part B, with payments reflecting the comprehensive nature of services offered.
This update marks a significant advancement in supporting mental health services within community health settings, streamlining the payment process and expanding access to critical psychiatric care.
Check out the original article: What billing/coding staff need to know
Contact Melissa for more information at: Melissa@BurrowsConsulting.net
