Payment for IOP Services

250.1 Payment for IOP Services (Rev. 12832; Issued: 09-12-24; Effective:01-01-24; Implementation:10-14-24) The CAA, 2023 requires payment for IOP services furnished by RHCs and FQHCs to be made at the same payment rate as if it were furnished by a hospital. Section 4124(c) of the CAA, 2023 also requires that costs associated with IOP services furnished by RHCs and FQHCs to not be used to determine payment amounts under the RHC all-inclusive rate (AIR) methodology or FQHC prospective payment system (PPS). FQHCs that contract with MA organizations must be paid at least the same amount they would have received for the same service under the FQHC PPS. This provision ensures FQHCs are paid at least the Medicare amount for FQHC services. Therefore, if the MA organization contract rate is lower than the amount Medicare would otherwise pay for FQHC services, FQHCs that contract with MA organizations would receive a wrap-around payment from Medicare to cover the difference. IOP services are included as part of the wrap-around payment policy. Effective January 1, 2024, payment for IOP Services furnished by RHCs will be the rate determined for (Intensive Outpatient (3 services per day) for hospital-based IOPs) and not the RHC AIR. Payment for IOP services furnished in FQHCs will be the lesser of a FQHC’s actual charges or the rate determined for hospital-based IOPs and not the FQHC PPS. Additionally, grandfathered tribal FQHCs will have their payment based on the IHS Medicare outpatient per visit rate when furnishing IOP services. That is, payment is based on the lesser of a grandfathered tribal FQHC’s actual charges or the IHS Medicare outpatient per visit rate. Multiple Visits When IOP services are furnished on the same day as a mental health visit or on the same day as a medical visit, all services are covered under Medicare Part B. However, in the event IOP services are furnished on the same day as a mental health visit, CMS will make one payment at the IOP rate. That is, payment for the mental health visit will be included under the IOP rate. In the event IOP services are furnished on the same day as a medical visit, CMS will make one payment for the medical visit under the FQHC PPS or under the RHC AIR methodology and one payment for IOP services at the IOP rate.