The Rural Health Clinic (RHC) program is intended to increase access to primary care services for patients in
rural communities. RHCs can be public, nonprofit, or for-profit healthcare facilities.
To receive certification, they must be located in rural, underserved areas. They are required to use a team
physicians working with non-physician providers such as nurse practitioners (NP), physician assistants (PA), and
certified nurse midwives (CNM) to provide services. The clinic must be staffed at least 50% of the time with an
NP, PA, or CNM (requirement waived during COVID-19 public health emergency). RHCs are required to provide
outpatient primary care services and basic laboratory services.
The main advantage of RHC status is enhanced reimbursement rates for providing Medicare and Medicaid services.
The MLN Fact Sheet, Rural
Health Clinic, describes how RHCs are reimbursed “an all-inclusive rate (AIR) for
medically-necessary primary health services and qualified preventive health services furnished by an RHC
practitioner.” For Medicaid,
a 2016 CMS
letter to state
health officials details how Medicaid visits are reimbursed under a Prospective Payment System (PPS) or
an alternative payment methodology (APM), providing a payment that is at minimum the same amount required under
PPS. For specific Medicare regulations governing the RHC program, see Rural Health Clinics - Rules
and Guidelines compiled by the National Association of
Rural Health Clinics,
or visit the Centers for Medicare and Medicaid Services (CMS) Medicare Rural Health
Frequently Asked Questions:
For policy and advocacy issues:
National Association of Rural Health Clinics
Nathan Baugh, NARHC Executive Director
For technical, policy, and operational assistance on rural health issues, including CMS regulations:
Regional Office Rural Health Coordinators
For survey, certification, and licensure questions:
For RHC reimbursement questions:
Contact your state Medicare
Administrative Contractor (MAC).
State Offices of Rural Health (SORHs) provide a range of resources, services, and technical assistance for
Rural Health Clinics. For more information, contact your State Office of Rural
Some states also have state associations that provide support, education, and other information and services
specifically for RHCs. The National Association of Rural Health Clinics maintains a list of these
state associations of RHCs.
How do I get certified as an RHC?
First, determine if your clinic is eligible. See Are there
location requirements for RHCs? for information about location requirements.
Part of the certification process includes completing the RHC application and CMS provider enrollment form.
Contact your state
agency responsible for RHC certification for an RHC application packet. The CMS 855A Medicare
Enrollment Application - Institutional Providers form is available on the CMS website.
You will be notified whether you are eligible for the RHC program after your applications (the number of
applications depends on your state) have been processed. If eligible, the next step is the RHC Certification
inspection. When you are ready for inspection and in compliance with RHC requirements, notify your state agency.
The state agency will then conduct a survey. There are two alternatives to your state survey agency, the QUAD A and The Compliance
Team, both of which are Medicare-approved private RHC accreditation organizations.
One of the final steps of the certification process is to establish rates with Medicare and Medicaid. Each
Medicare Administrative Contractor (MAC) and state Medicaid agency has its own process to establish RHC rates.
It is important to get expert advice from someone familiar with the appropriate
cost report. Accuracy can have significant financial impact on a year-end cost report.
For more detailed information about becoming an RHC, see CMS's Medicare
Benefit Policy Manual – Chapter 13 – Rural Health Clinic (RHC) and Federally Qualified Health Center (FQHC)
Services and the State
Operations Manual: Appendix G – Guidance for Surveyors: Rural Health Clinics (RHCs).
Are there any other considerations before becoming an RHC?
Completing a financial assessment may be helpful to also see if becoming a certified RHC is a feasible option.
Financial benefits of RHC status depend on the mix of payers and services offered. Traditional Medicare
fee-for-service and state Medicaid provider rates could be better in some cases. When evaluating financial
feasibility, look at the broader financial picture rather than individual visits. You may want to hire a
consultant to conduct a financial feasibility study. A list of consultants
and vendors is provided by the National Association of Rural Health Clinics (NARHC). Please note that
NARHC does not endorse these consultants and is only providing the list as a service.
What is the difference between a provider-based RHC and an independent RHC?
Provider-based RHCs are owned and operated as an essential part of a hospital, nursing
home, or home health agency participating in the Medicare program. RHCs operate under the licensure,
governance, and professional supervision of that organization. Most provider-based RHCs are hospital-owned.
Independent RHCs are free-standing clinics owned by a provider or a provider entity. They
may be owned and/or operated by a larger healthcare system, but do not qualify for, or have not sought,
provider-based status. More than half of independent RHCs are owned by clinicians.
Are there location requirements for RHCs?
Yes, RHCs must be located in non-urbanized areas, as defined by the U.S. Census Bureau. There is no restriction
on how closely RHCs can be located to one another. If services are provided at more than one permanent location,
each location must be independently approved by Medicare. During the COVID-19 public health emergency, however,
this requirement is temporarily waived in order to provide flexibility to existing RHCs to meet the needs of
patients. You can use RHIhub's Am I Rural? tool as a first step to see if your
location qualifies, but note that your Am I Rural? report is not a guarantee of your rural status eligibility
for the RHC program.
RHCs must also be located in a shortage or underserved area that has been designated within the last four years
by the Health Resources and Services Administration. There are four types of
shortage areas that qualify:
Geographic-Based Health Professional Shortage Areas (HPSAs) are population-based areas that
have workforce shortages in primary medical care, mental health, or dental health. HRSA's HPSA Find tool, searchable
by state and county, determines if your area is currently designated as a shortage area.
Population-Group HPSAs have barriers preventing the patient population from accessing
primary care providers within their area. The HPSA Find tool will also
determine if your area is currently designated as a shortage area.
Medically Underserved Areas (MUAs) are designated by HRSA as having a shortage of primary
care providers, a high infant mortality, high poverty, and/or a high elderly population. HRSA's MUA Find tool, searchable by
state and county, determines if your area has a current MUA designation.
Governor-Designated Secretary-Certified are designated by the governor and
certified by the Secretary of Health and Human Services as an area
with a shortage of healthcare services for the purpose of RHC certification. Contact your State
Office of Rural Health for assistance in determining if there are any state designated shortage
areas in your state.
Find Shortage Areas by Address is another
HRSA tool that determines if a specific address is located in a HPSA
or an MUA.
The final determination of rural status is made by your state
agency responsible for RHC certification and the CMS
regional office. If you have questions or want further verification of your location status, please
contact your state agency as a next step.
If a location loses its non-urbanized area and/or shortage designation, is it possible to remain a Rural Health
Yes. An RHC previously certified as being in a non-urbanized area and designated shortage area that loses either
or both of these designations cannot be decertified by CMS. See RHC Rules and Guidelines Condition
of Coverage: Location of Clinic for additional information.
Additional rules apply to RHCs that choose to relocate. Any RHC that no longer meets one or both of the location
requirements and chooses to relocate to another non-qualifying area will be terminated from the program. An RHC
may maintain RHC status if the new location meets current location requirements. See Rural
Health Clinic (RHC) Location Determination Guidance Updated for detailed information.
Are there special staffing requirements for RHCs?
RHCs must employ at least one nurse practitioner (NP) or physician assistant (PA). RHCs are required to be
staffed by an NP, PA, or certified nurse midwife (CNM), who must be on-site to see patients at least 50% of the
time the clinic is open. However, CMS has waived the 50% requirement for the duration of the COVID-19 public
health emergency (PHE). Other staff may work under contract. Typically, a physician (MD or DO) must supervise
NP, PA, or CNM in a manner consistent with state and federal law. During the COVID-19 PHE, however, CMS has
waived this supervision requirement for nurse practitioners to the extent allowed by state law.
Every RHC must be “under the medical direction of a physician” who is an MD or DO, but the
level of direct patient care may be very limited. There is no specific FTE percentage or employed/contracted
agreement required for physicians in an RHC unless the state has additional compliance standards. The physicians
do not have to be employed by the RHC; they can provide services under contract. The arrangement must comply
with state scope of practice laws, and the physician must be on-site for sufficient periods depending on the
needs of the facility and its patients. Records review may be conducted via an electronic health record (EHR).
For more information, see Section
491.8 Staffing and Staff Responsibilities for Rural Health Clinics, located within the Code of Federal
What resources are available to help RHCs maintain their primary care workforce?
Several resources and grant programs help recruit and retain physicians and mid-level practitioners:
How does Medicare reimburse RHCs?
RHCs receive an interim all-inclusive
rate (AIR) payment per visit throughout the clinic's fiscal year, which is then reconciled through cost
reporting at the end of the year. According to CMS's Medicare
Benefit Policy Manual – Chapter 13 – Rural Health Clinic (RHC) and Federally Qualified Health Center (FQHC)
Services, the interim payment rate is determined by taking the total allowable costs for RHC services
divided by the total number of visits provided to RHC patients receiving core RHC services. In addition, RHCs
are subject to productivity, payment limits, and other factors which can affect payment.
RHC staff must meet traditional Medicare regulations for coding and documentation, as well as unique RHC
Rural Health Clinic Costs and Medicare
Reimbursement, a 2019 brief from the Maine Rural Health Research Center, notes independent RHCs and
provider-based RHCs owned by hospitals with 50 or more beds are subject to a per-visit
reimbursement rate cap for Medicare payments. In fiscal year 2014, only 45% of the adjusted cost per
visit (ACPV) at provider-based RHCs was covered by the Medicare reimbursement rate, while 71% of the ACPV was
covered by Medicare at independent RHCs. As the policy brief notes, small independent and provider-based RHCs
had higher average costs per visit than other RHCs, likely arising from having lower service volumes than their
larger counterparts. A December 2017 National
Advisory Committee on Rural Health and Human Services policy brief, Modernizing
Rural Health Clinic Provisions, made several recommendations to
modernize the Rural Health Clinic program, including a recommendation that the payment cap be
In December 2020, Congress passed legislation to update the RHC reimbursement methodology as part of a larger
spending package. As a result, beginning in 2021, the RHC cap will rise each year through 2028, all new RHCs
will have a uniform per-visit cap, and no RHC will see a reduction in reimbursement. Uncapped RHCs that were
certified and enrolled in Medicare prior to December 31, 2020, are grandfathered in at the clinic's 2020
all-inclusive rate. For more information, view the National Association of Rural Health Clinics' webinar Rural Health Clinics Modernization
Policy Explained and the Centers for Medicare and Medicaid Services publication Update to Rural Health Clinic (RHC) Payment Limits.
How do states reimburse RHCs through Medicaid?
All state Medicaid programs are required to recognize RHC services. The states may reimburse RHCs under one of
two different methodologies as outlined in a 2016 CMS
letter to state
The first is a prospective payment system (PPS). Under this methodology, the state calculates a
per visit rate based on the reasonable costs for an RHC's first two years of operation. For each succeeding
year, this per visit baseline rate is increased by the Medicare Economic Index factor.
The second methodology is an alternative payment methodology. Under this methodology, there are
only two requirements: 1) the clinic must agree to the methodology, and 2) the payment must at least equal the
payment it would have received under the prospective payment system. Each state has its own method of applying
the PPS or alternative payment methodology. State Medicaid agencies should be contacted to determine how RHC
rates are determined in their state.
Medicaid agencies also may cover additional services that are not normally considered RHC services, such as
dental services. You can contact your
state Medicaid Office or CMS
Regional Office Rural Health Coordinator for information on how Medicaid pays for RHC services in your
Also, for additional information about individual state Medicaid benefits for RHC services, see
Benefits: Rural Health Clinic Services from the Kaiser Family Foundation.
Can RHCs be reimbursed for telehealth services?
Traditionally, RHCs and Federally Qualified Health Centers (FQHCs) could only bill Medicare for telehealth
services if the clinic was serving as an originating site, or where a Medicare beneficiary went to conduct a
telehealth visit with a provider in a different location.
In response to the COVID-19 pandemic, however,
Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act,
which was signed into law on March 27, 2020. The CARES Act allowed RHCs and FQHCs to serve as distant sites in
order to provide telehealth services to patients at any location, including their homes, for the duration of the
COVID-19 public health emergency. The CY
2022 Medicare Physician Fee Schedule Final Rule updated federal regulations to make permanent the
ability of FQHCs and RHCs to be reimbursed by Medicare for mental health visits that use interactive, real-time
audio-visual and audio-only technology. Beginning January 1, 2022, RHCs and FQHCs are paid for these services at
the same rates they are paid for in-person mental health services.
For more information on changes to rural healthcare and telehealth as a result of COVID-19, see RHIhub's Rural Response to Coronavirus Disease 2019 (COVID-19).
How does the Merit-Based Incentive Payment System (MIPS) affect RHCs?
In short, it doesn't. RHC services are exempt from the Merit-Based Incentive Payment System (MIPS) because MIPS
applies to payments made through the Physician Fee Schedule. The Quality Payment
Program (QPP) was created by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MIPS is
one of two tracks within the QPP designed to provide incentives for high quality care. MIPS requires reporting
on quality improvement, performance assessment, and costs. These categories are factored into a score which
affects Medicare reimbursement.
Because RHCs receive cost-based reimbursement for RHC services, the bulk of their payment is exempt from MIPS.
However, some RHC clinicians furnish non-RHC services paid for under the Physician Fee Schedule (billed on CMS
1500). These non-RHC services may be subject to MIPS reporting requirements if the clinician exceeds the low
volume threshold set as: $90,000 Medicare Part B payments, or 200 Medicare Part B patients. Again, RHC billing
(CMS 1450) and reimbursement would not count toward the $90,000 threshold and those patients would also not
count towards the 200 Medicare Part B patients. If your clinician provides a significant amount of non-RHC
services on the Physician Fee Schedule (exceeding the low volume threshold), then those payments are subject to
MIPS reporting and adjustments.
RHCs are allowed to participate in MIPS voluntarily to obtain a MIPS score, but this score will not affect their
cost-based reimbursement. Because RHCs may voluntarily participate in MIPS, there is speculation that CMS may
include RHCs in MIPS in the future. For more information on MIPS eligibility, see How MIPS Eligibility is Determined.
Can Rural Health Clinics be certified as Patient-Centered Medical Homes (PCMHs)?
The Patient-Centered Medical Home (PCMH) is a healthcare delivery model that requires a patient to have a
continuing relationship with a healthcare team that coordinates patient care to improve access, quality,
efficiency, and patient satisfaction. Although no federal support program currently exists to assist RHCs in
gaining recognition as a PCMH, and they receive no financial benefits from Medicare for this, they are eligible
to do so. The National
Council for Quality Assurance (NCQA) and The
Compliance Team (TCT) have both developed CMS-approved PCMH programs appropriate for rural health
providers. For additional information about RHCs adopting the PCMH model, see Rural
Health Clinic Readiness for Patient-Centered Medical Home Recognition: Preparing for the Evolving Healthcare
Can RHCs join Accountable Care Organizations (ACOs)?
Yes, RHCs are
able to participate in the Medicare Shared Savings program and become an Accountable
Care Organization (ACO) or join an existing ACO. ACOs establish incentives for healthcare providers to
coordinate care among
different settings — hospitals, clinics, long-term care — when working with individual patients. The
Medicare Shared Savings Program rewards ACOs that meet certain performance standards for serving
Medicare beneficiaries. CMS has published Program
Statutes & Regulations that would help doctors and hospitals coordinate care through ACOs. See Medicare
Shared Savings Program for Providers for additional information about joining ACOs, the benefits, and
requirements for participation.
What is the difference between a Federally Qualified Health Center (FQHC) and a Rural Health Clinic (RHC)?
Although FQHCs and RHCs both provide primary care to underserved and low-income populations, there are some
Differences Between RHCs and FQHCs
|Rural Health Clinics
||Federally Qualified Health Centers
|For-profit or nonprofit
||Nonprofit or public facility
|May be limited to a specific type of primary care practice (e.g., OB-GYN,
||Required to provide care for all age groups
|Not required to have a board of directors
||Required to have a board of directors – at least 51% must be patients of the
|No minimum service requirements
||Minimum service required – maternity & prenatal care, preventive care,
health, emergency care, and pharmaceutical services
|Not required to charge based on a sliding fee scale
||Required to treat all residents in their service area with charges based on a
|Not required to provide a minimum of hours or emergency coverage
||Required to be open 32.5 hours a week for FTCA coverage of licensed or certified
healthcare providers. Must provide emergency service after business hours either on-site or by
arrangement with another healthcare provider
|Required to conduct a biennial program evaluation regarding quality improvement
||Required to have ongoing quality assurance program
|Must be located in a Health Professional Shortage Area, Medically Underserved
governor-designated and secretary-certified shortage area. May retain RHC status if designation of
service area changes.
||Must be located in an area that is underserved or experiencing a shortage of
|RHCs must be located in non-urbanized areas
||FQHCs may operate in both non-urbanized and urbanized areas
|Required to submit an annual cost report; however, auditing of financial reports
is not required
||Required to submit an annual cost report and audited financial reports
For a more complete comparison, see HRSA's Comparison
of the Rural Health Clinic and Federally Qualified Health Center Programs.
How do RHCs meet the healthcare needs of rural Medicare beneficiaries?
RHCs were first created to meet the primary care needs of rural Medicare beneficiaries. Access
and Capacity to Care for Medicare Beneficiaries in Rural Health Clinics, a 2019 policy brief from the
University of Minnesota Rural Health Research Center, summarizes the findings of a voluntary survey of 111 RHCs.
The survey found that 87% of RHCs accept walk-in appointments and 65% of RHCs had appointments available for
existing Medicare beneficiaries. However, 37% of RHCs had appointments available for new beneficiaries within
one day, and the average wait time for an appointment for new beneficiaries was 5 days.
While RHCs provide primary services to rural residents, RHCs often must refer patients to other providers when
specialty care is required. Access to
Specialty Care for Medicare Beneficiaries in Rural Communities notes that
22% of Medicare beneficiaries that had appointments at RHCs needed specialty care, but 64% of RHCs had
difficulty finding specialists to which they could refer these patients.
Rural residents, especially those on limited or fixed incomes, may find cost a barrier to accessing care at
as a Barrier to Accessing Care at FQHCs and RHCs for Rural Medicare Beneficiaries illustrates, rural
Medicare beneficiaries experience a higher cost-sharing burden when receiving care at RHCs compared to Federally
Qualified Health Centers (FQHCs). Unlike FQHCs, Medicare Part B deductibles do apply to services provided at
RHCs. Additionally, RHCs are not required to utilize sliding fee scales like FQHCs, although many RHCs do offer
one. Delaying or postponing primary care due to cost can lead to poor health outcomes.
What are the demographics and most common medical characteristics of RHC Medicare patients?
According to HRSA Data Explorer, there are more than
4,700 RHCs in the United States as of August 2021. The 2013 Profile of Rural Health
Clinics: Clinic & Medicare Patient Characteristics findings brief, based on 2009 data, identified
several important features:
The median number of RHC visits by a Medicare beneficiary was 3 per year while the mean was 4.8
The median distance Medicare patients traveled one way to an RHC was 6.2 miles
Medicare patients utilizing RHCs were an average age of 71
22% of Medicare patients seen at RHCs were under the age of 65, 38% were 65–74, 27% were 75-84 and 13% were
85 and above
58% of RHC Medicare patients were female
91% of the RHC Medicare patients were White and 6.6% were African American
In addition, the North
Carolina Rural Health Research and Policy Analysis Center analyzed 2014 Medicare claims data, and
identified the top 5 common medical characteristics of RHC patients to be:
Diabetes mellitus (6.5%)
Disc disorders and back problems (4.9%)
Respiratory infections (3.9%)
Obstructive pulmonary diseases (3.4%)