Reconciling Section 330 Requirements and Retail Clinic Principles

Explaining Retail Clinics,
Market Acceptance, Players,
Regulators, and the Future
of Retail Clinics
Legal slides only
Feldesman Tucker Leifer
Fidell LLP
© Scott & Company, Inc. 2008
Reconciling Section 330 Requirements and Retail Clinic
NOTE: FQHCs are advised to consult with knowledgeable local counsel when
evaluating and implementing a retail clinic model
Patients’ access to the FQHC’s full scope of services
All patients served at the FQHC’s retail clinic site must have reasonable
access to the full scope of services offered by the FQHC as a whole
Schedule of charges and discounts
Consistent with locally prevailing rates and designed to cover the
reasonable costs of operation
Adjusted based on ability to pay for uninsured and underinsured
persons with annual incomes at and below 200% of the federal
poverty level (full discounts/nominal fee for uninsured and
underinsured persons with annual incomes at or below 100% of
poverty); no discounts to third party payors
Must not deny any individual services based on ability to pay
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Reconciling Section 330 Requirements and Retail
Clinic Principles
3. Hours of operation
• Must be appropriate for the community and facilitate access
to services
4. Composition of the Board
If new demographic group represents a significant portion of
the FQHC’s patient base, then the FQHC must ensure that
the new population is sufficiently represented on its Board
5. Board authorities
Directors should be involved in the process of evaluating and
selecting a retail clinic model
Must approve the retail clinic services, hours or operation,
and any change in key policies and procedures
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Scope of Project
An FQHC that wishes to establish a retail clinic
outside of its existing site(s) must request and obtain
prior approval from HRSA to add the new site to its
scope of project
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Change of Scope of Project Request
The “change of scope” request must
– Document that no additional Section 330 funds are needed to support
the provision of services at the new site(s)
– Not shift resources away from providing services to the current target
population, or otherwise result in the diminution of the FQHC’s total
level or quality of health services currently provided to the target
– Further the FQHC’s mission by increasing or maintaining access and
improving or maintaining quality of care for the target population
– Be fully consistent with Section 330 and Health Center Program
Expectations, including appropriate governing board representation for
changes in service sites and populations served
– Provide for appropriate credentialing/privileging of providers
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Change of Scope Request: Special Retail Clinic
2007 HRSA Letter: FQHCs seeking to submit a request to add a retail
clinic site (located within a retail institution) to its scope of project
should be prepared to answer the following:
What is the FQHC’s plan for providing retail clinic patients with access to primary
care services not offered at the retail clinic site? How will the FQHC staff ensure
appropriate follow-up and coordination of care?
How will the FQHC ensure that the retail clinic addresses the needs of special
populations (e.g., elderly, chronically ill)?
What is the FQHC’s plan for instituting its sliding fee scale at the retail clinic
What role will the retail establishment play in the operation of the retail clinics?
Will it pay for the clinic’s overhead costs? Will they have any control of the fee
scale, clinical protocols, hours, or the supervision of staff?
What is the business relationship between the FQHC and the retail
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Securing FQHC Benefits
If retail clinic model arrangement is operated within FQHC’s scope of project,
the FQHC may enjoy certain Section 330 related benefits
Tort Claims Act (FTCA) coverage
pricing under Section 340B
statute safe harbor
to VFC Vaccines
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Securing FQHC Benefits: Cost-Related
Access to cost-related reimbursement
Access to reimbursement under the Prospective Payment System
(“PPS”) or other state-approved alternative payment methodology
(which is predicated on a cost-based reimbursement methodology)
for Medicaid and CHIP services and cost-based reimbursement for
services provided under Medicare
“Wraparounds” for difference between Medicaid and CHIP
managed care capitation and PPS; wraparound on Medicare
managed care payments effective FY 2006 and on CHIP
payments effective FY 2010
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Securing FQHC Benefits: Federal Tort Claims Act for
Section 330 Grantees
Access to Federal Tort Claims Act ("FTCA") coverage, in lieu of purchasing malpractice
insurance, may significantly reduce the costs of operating a retail clinic
– FTCA is only available for:
• the deemed FQHC (as well as its directors and officers);
• FQHC employees that provide services on a full-time or part-time basis;
• individually contracted providers who furnish services in the fields of general
internal medicine, family practice, general pediatrics and obstetrics and
gynecology, regardless of the number of hours worked; and
• individually contracted providers who furnish services in other fields of
practice, so long as they provide such services to FQHC patients for an annual
average of 32 ½ hours a week (i.e., on a full time basis).
– With certain exceptions, FTCA only covers services provided within the FQHC’s
approved “scope of project” and within the provider’s scope of
If a provider at a retail clinic site is not covered under FTCA, the FQHC must ensure that
he/she secures and maintains policies of professional liability (malpractice, errors and
omissions) insurance and/or self-insurance
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Securing FQHC Benefits: Section 340B Drug Pricing
Access to favorable drug pricing under Section 340B of the Public
Health Service Act
– FQHC cannot supply 340B drugs to individuals who are not
registered FQHC “patients”
– Individual will not be considered a “patient” for 340B purposes if
the only health care service received from the FQHC is the
dispensing of a drug or drugs for subsequent self-administration
or administration in the home
FQHC that locates a site in or near to a retail store that operates a
pharmacy will need to consider the implications of such arrangement
for its current pharmacy operations (whether FQHC-owned or
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Securing FQHC Benefits: Anti-Kickback Safe Harbor for
Section 330 Grantees
Access to the FQHC Health Center Safe Harbor under Federal Anti-Kickback
statute: final OIG rule issued October 4, 2007 (42 C.F.R. 1001.952(w))
– Purpose: protect from prosecution under the federal anti-kickback law
– Certain arrangements between FQHC Section 330 grantees and
providers/suppliers of goods, items, services, donations and loans
• That contribute to the FQHC’s ability to maintain or increase the
availability, or enhance the quality, of services provided
• To the FQHC’s medically underserved patients
If structured properly, may allow for reduced rent, free medical equipment
and/or funding to support the establishment of the FQHC’s retail clinic
NOTE: See OIG Advisory 01-9 (favorable opinion re: a hospital’s award of
community benefit grant to an FQHC that acquired the hospital’s
ambulatory care site)
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Securing FQHC Benefits: Vaccines for Children
Access to the Federal Vaccine For Children program
– VFC vaccines may only be administered to VFC-eligible children
• Any child 18 years of age or younger that meets at least one of the
following criteria:
– Medicaid enrolled (includes children in an expansion CHIP)
– Uninsured (does not include children enrolled in a separate
– American Indian or Alaskan Native (as defined by the Indian
Health Services Act)
– Underinsured (a child whose health insurance benefit plan
does not include VFC vaccinations)
» NOTE: Underinsured children are only eligible to receive
VFC vaccines through a FQHC or RHC
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