Frequently Asked Questions

Here are the questions we get most often. If you have questions not listed here, please Contact Us and we will be glad to help you find the answers.


What do I do when the RHC has lost its midlevel practitioner?
What do you do to change from a provider-based RHC to a freestanding RHC?
What is a Federally Qualified Health Center?
Can I sell the certificate to my RHC?
Are there any benefits to working in a HPSA or MUA shortage area?
How do you handle Worker's Compensation claims for a Medicare patient?
I want to terminate my RHC status, what do I do?
I want to apply to become a RHC, how do I do that?
Where do I find the rules on how Texas Medicaid pays RHCs?
I want to set up a new rural health clinic but I have heard that we cannot do that in Texas anymore...
I heard that CMS is gonna change some rules for RHCs, what are they?


Question: I have recently lost my midlevel practitioner and am in the process of looking for a physician assistant or nurse practitioner to hire for my rural health clinic. Do I have to notify anyone that I no longer have a midlevel working in the RHC?


Answer: One of the requirements of being a certified rural health clinic is that an existing clinic must have a physician assistant, nurse practitioner, or certified nurse midwife available to see patients 50% of the time it is open to provide medical services. In the event the midlevel leaves employment of the RHC, a waiver can be requested from the state agency that surveyed the clinic.
      In Texas, the Department of Health's Facility and Compliance Division's Zone Administrators are the offices that will grant a waiver to operate without a midlevel being available. This applies only to RHCs that already have their RHC provider number. Clinics waiting to became certified RHCs are not eligible for this waiver.
      A participating RHC may request a waiver when it loses its physician assistant, nurse practitioner, or certified mid wife in the previous 90 day period. A waiver can be granted for a period up to a year. However the RHC can not make a request less than six months after the expiration of any previous such waiver for the facility. The RHC must submit written documentation to their Texas Department of Health Zone office demonstrating its reasonable efforts to hire the required staff.

Question: We are a rural community hospital and have a couple of hospital owned rural health clinics (provider based clinics). However due to some changes in our accounting policies and the fact that one clinic is located at some distance from the hospital which may not meet the criteria of provider based, we want to change their RHC status. What do we do to still own the clinics but change them over to independent (freestanding) status?


Answer: Just notify the state agency (zone office) in writing that the clinic(s) wants to change its status from Provider Based to Free Standing with any written documents, if they have any. The state should then prepare a Form 1539 to be sent to the Centers for Medicare and Medicaid Services (CMS). CMS will notify the fiscal intermediary.

Question: What can you tell me about federally qualified health centers? With funding being spent to expand these community health centers, we are thinking about converting to one.


Answer: I have had a number of phone calls and e-mails from RHCs asking questions about Federally Qualified Health Centers (FQHC). I believe the majority of these questions can be answered by looking at the Rural Assistance Center's (RAC) web page on the FQHC program. That link is www.raconline.org/info_guides/clinics/fqhcfaq.php

Question: I am interested in taking over an existing RHC and the current owner says he will sell the clinic building and medical equipment at the current market price. However, he says that if I want the clinic's RHC certification I will have to pay him for it. Is this right? He said he did all the work to get the certification and it is his number to do as he wants.


Answer: Questions like can be addressed to your zone administrator, which is what I did. For the name of your Texas Department of Health Compliance and Licensing Zone Administrator, go to the resource web page and click on the Facility Compliance and License Division and scroll through it to find the button to the Zone addresses.The answer I received to the question of selling a certified RHC's number is:

To quote from the Regional Survey and Certification (RS&C) letter 98-06, dated April 27, 1998:

" A Medicare provider number is just a means of identifying {providers and suppliers} which participate in the Medicare program. when there is a transfer of ownership for Medicare purposes, we anticipate that there is a transfer of ownership in a business entity and that the entity continues to provide services to the community......The purchasing entity is not buying a Medicare number, it is obtaining a {provider or supplier} which is in full operation and meets Medicare regulations. The Medicare number is an identification for Medicare purposes."

Section 3210 of the State Operations Manual (CMS Pub. 7) states:

"When a provider undergoes a CHOW {change of ownership}, the provider agreement {and number} is automatically assigned to the new owner unless the new owner rejects assignment of the provider agreement."

Thus, the old owner cannot sell and the new owner cannot buy the Medicare provider agreement and number – they already belong to the new owner unless the new owner rejects assignment in writing.
      A survey of a RHC that had undergone a CHOW does not usually require a survey.If the new owner rejected assignment of the Medicare provider agreement {and number}, then they would be required to apply just as a new RHC would, and an initial survey would be conducted.
       Anyone that tries to sell a Medicare provider agreement (or number) should be reported to the Inspector General (IG) of the U.S. Department of Health and Human Services (DHHS) for investigation of fraud.

Question: I have heard there are extra benefits to working in a rural shortage area of a HPSA or MUA. What are some of the advantages?


Answer: There are a number of advantages from helping get school loans paid off to increase Medicare payments in rural geographic HPSAs to having a clinic designated as a federally certified rural health clinic or federally certified community health center. If you want to know what these shortage designations offer to rural Texas, you can check on our resource page at the TDH Health Professions Resource Center link and look for the benefit and incentive programs related to HPSA, MUA & MUP. Or go to http://www.dshs.state.tx.us/chs/hprc/


Question: I have a RHC Medicare patient who initially came to the clinic for a work related injury to his back, and while there the provider also treated the person for the flu he is suffering. Can I bill the worker's comp and also bill the Medicare fiscal intermediary? It is two separate things we treated the patient for and it seems that the money would come from two different sources.


Answer: The entire bill is sent to the worker's compensation organization and they pay for the work related injury and then the claim would need to go to the Medicare fiscal intermediary to be handled as a secondary payer by the FI in order for Medicare to pay their part of the worker's comp injury as well as a primary payment for Medicare covered items and services not related to the worker's comp injury.

Question: I want to terminate my RHC status, what do I do?


Answer: Owners of RHCs that want to terminate their status as a federally certified rural health clinic will need to consider several things before carrying out their decision ….

If you are selling your business and the RHC status to a new owner, you will need to complete a change of ownership packet (CHOW) which can be obtained from the state surveyor’s office that handles your clinic. Contact them!

If you are just dropping your status as a RHC but will continue as a fee-for-service provider, you will need to notify CMS of your intent to stop services as a RHC. Notify CMS through your state surveyor’s office. Contact your Medicaid provider representative for instructions on terminating services as a RHC with all of their programs.

If you are shutting down the business completely and not going to practice medicine any more, you need to notify a lot of people: that list will include Medicare, Medicaid, the physician’s medical examiners board, and your commercial insurers that you have participation contracts to provide network services for their members.

And don’t forget, a final cost report will have to be made to close out your RHC payment status. Download more specific information here (.pdf).


Question: I want to apply to become a RHC, how do I do that?


Answer: You can become a RHC if you are in a rural area(county ) that is designated as a shortage area, either a Health Professional Shortage Area (HPSA) or a Medically Underserved Area (MUA) which you can check by going to the TARHC website's resource page and linking on to either the state webpage or the Federal webpage, the links will have HPSA and MUA on their lines. Just as a note, to become a RHC you will have to have a midlevel practitioner on staff, meaning a PA, NP, or certified midwife employed in the clinic at least 50% of the time it is open to see patients.

The process of applying to become a RHC is handled through the Texas Department of State Health Services (DSHS) by their Facility Licensing and Compliance Division that has Zone offices around the state and there is a link to that Division on the TARHC website resource page that also has the addresses of the Zone offices.. You will need to contact their Zone office that is responsible for your part of the state to apply for RHC certification. They do a lot of their application distribution of required forms on the Internet but this is basically what you will hear from them...you will be directed to go to the CMS website (or TrailBlazer) to obtain a provider enrollment form (Form CMS -855A) remember the RHC is a facility and gets paid by Part A Medicare, so don't go to the Part B section and get that enrollment form. You will have to also get a NPI number for the rural health clinic that you will list on the CMS-Form 855A . So get the NPI first and then do the 855A form. Once the 855A enrollment form is completed, you need to mail it to the fiscal intermediary (FI).

The FI will process their part of this application and once they have done their part of the process, they will send the approved CMS Form 855A to the Zone office for your area.

Once the state Zone office receives the approved Form 855A from the FI, they send a letter to you informing you that they received the FI approval and request you sent them a letter stating when you are ready for the survey and have provided services to at least five patients. The Zone office will also direct you to the Government Printing Office (GPO) website to obtain a copy of the Conditions for Certification (42 CFR 491, Subpart A) and to the CMS website to obtain copies of the survey report form (Form CMS-30) and the interpretive guidelines. When the Surveyor goes on site, they obtain a request to establish eligibility (Form CMS-29), three original, signed copies of the health Insurance Benefit Agreement (Form CMS-1561A), Office of Civil Rights (OCR) forms which are in Appendix G of the State Operations Manual.

This entire process is not a quick procedure, it may take anywhere from three months,but normally six months to get certified. But some have taken almost an actual year in some cases, and if any part of the process is not completed correctly or caught in a log jam, the wait to get certified seems to never end. So be patient but ask questions all along the way....don't sit and think you are being taken care, ask those questions!


Question: Where do I find the rules on how Texas Medicaid pays RHCs?


Answer: The rules on how Texas pays the RHC Medicaid Prospective Payment System (PPS) encounter rate can be found in the Texas Adminstrative Code at www.sos.state.tx.us. You can reach it by going through these parts to get to the RHC Reimbursement information.

Title 1 Administration
Part 15 Texas Health and Human Services Commission
Chapter 355 Reimbursement Rates
Subchapter J Purchased Health Services
Division 6 Rural Health Clinics
Rule 355.8101 Reimbursement

Question: I want to set up a new rural health clinic but I have heard that we cannot do that in Texas anymore, is it because we have too many RHCs?


Answer: We do have a problem in Texas for initial certification of new RHCs but it is not because we have too many clinics, the problem is a financial one from the CMS budget standpoint. There simply is not enough money to contract with the state health department to carry out all the functions that must be done for the Medicare program, and it is different for each state... Texas is going through what other states have experienced in the past...and now as a result of prioritizing initial facility surveys (certification inspections for participation in the Medicare program) Rural Health Clinics have been given a very low priority. An exception can be made if there is no access for healthcare to Medicare beneficiaries in that area where someone wants to establish a RHC....but consideration for an exception will have to be determined by the state surveyor who will then make a recommendation to the CMS Regional office in Dallas for consideration if it truly is a situation of no healthcare available to beneficiaries in that location. See the attached correspondence dated November 5, 2007 on this priority designation status for initial RHC surveys. Download CMS correspondence for more information... (Word)

Question: I heard that CMS is gonna change some rules for RHCs, what are they?


Answer: CMS published their new RHC Rule proposal in the Federal Register which can be viewed at >http://federalregister.gov . Public comments must be submitted by 5:00pm Eastern time on August 27, 2008. You can download the slides that were used at a RHC Technical Assitance Conference Call on July 8, 2008 that addresses the proposed RHC changes here: Download the Slideshow (PowerPoint)



Texas Association of Rural Health Clinics

P.O. Box 203878

Austin, Texas 78720-3878

(512) 873-0045

Texas Association of Rural Health Clinics
For information contact Ramsey Longbotham or call (512) 873-0045
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