Rural Health Clinic Costs and Medicare Reimbursement


The Rural Health Clinic (RHC) Program is one of the nation's oldest rural primary care programs. A key feature of the RHC Program is Medicare and Medicaid volume-appropriate, cost-based reimbursement, which is designed to sustain these vulnerable rural primary care providers. Medicare currently pays RHCs for the lesser of reasonable costs (expressed as an adjusted cost per visit) for a defined package of RHC services or a per-visit reimbursement cap, from which provider-based RHCs owned by hospitals with fewer than 50 beds are exempt. Although the per-visit cap is updated periodically, RHC administrators, policymakers, and stakeholders question whether the updates have allowed RHCs to keep pace with increases in staffing and other costs. This brief explores this issue by examining the costs of RHCs relative to Medicare payment limits for various types and sizes of RHC providers.

Maine Rural Health Research Center
John Gale, Zachariah Croll, Andrew Coburn