Major changes are coming to Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) in 2025, stemming from the Medicare Physician Fee Schedule Final Rule. The Centers for Medicare & Medicaid Services (CMS) has announced updates that will reshape how these facilities deliver care, receive payments, and operate day-to-day. For healthcare providers, early preparation will be key to success. Some of the Final Rule’s Key changes for RHCs and FQHCs are outlined below. We recommend a full review of the rule, so each facility understands the complete impacts to their operations.  

Key Changes Affecting RHCs and FQHCs 

Extended Telehealth Flexibility 

Here's good news for rural providers: telehealth flexibility has been extended through December 31, 2025. RHCs and FQHCs can continue providing remote care as distant site providers, with reimbursement based on Medicare Physician Fee Schedule averages. For facilities that have made telehealth a core part of their care delivery, this extension provides welcome stability. 

Updated Conditions for Certification 

CMS has revised certification requirements to better reflect modern healthcare delivery. RHCs now have more freedom to expand their services - they're no longer required to spend most of their hours on primary care. While primary care remains essential, facilities can now offer more specialty and behavioral health services. This flexibility is particularly valuable for rural and underserved areas where access to specialized care is often limited. 

Adjustments to Productivity Standards 

CMS will be eliminating RHC productivity standards for cost report periods ending after December 31, 2024 These updates give facilities more room to align their staffing and services with what their patients actually need, rather than focusing on meeting rigid standards. Therefore, for those cost report periods ending after December 31, 2024, RHC productivity exemptions will no longer be needed.  

Payment and Billing Updates 

Shift in Care Coordination Coding 

Starting January 1, 2025, you'll see significant changes in how care coordination services are billed. Instead of using a single code (G0511), you'll need to use specific codes for each service. While this change will ultimately improve accuracy, it requires substantial updates to billing systems. That's why CMS has provided a six-month implementation period through July 1, 2025, to facilitate a smoother transition. 

New Preventive Vaccine Billing Requirements 

Effective July 1, 2025, facilities must adopt updated billing procedures for preventive vaccines (COVID-19, pneumococcal, influenza, and Hepatitis B) at time of service, not entirely in a lump sum settlement on cost report, beginning July 1, 2025. RHCs will still need to reconcile with CMS on an annual basis to receive 100% of their vaccine and administrative costs through the year-end cost report. This will affect revenue cycles for RHCs and FQHCs. Preparing for these changes will involve evaluating existing billing workflows and training staff on new vaccine billing codes to maintain reimbursement accuracy for preventive care services. 

Advanced Primary Care Management (APCM) Services Bundle 

The new APCM bundle combines care management with technology-based services, establishing a proactive approach to primary care management. This bundle encompasses essential elements such as continuous patient care access, electronic care plan management, population health analysis, and quality performance tracking. With this comprehensive approach, facilities can enhance care delivery while improving quality outcomes. 

Financial Impact and Preparation 

The 2025 Medicare changes bring significant financial and operational implications. New billing requirements will affect revenue cycles, particularly the transition from single to multiple care coordination codes. Facilities should conduct a comprehensive financial assessment focusing on: 

• Revenue Impact Analysis: Start by looking at your numbers. How many care coordination services do you provide now? What are your current reimbursement patterns? Compare these with what you might expect under the new system to spot any potential issues early.
• System Readiness: Your billing system needs to handle both old and new codes during the transition. Work with your vendors early - you don't want to discover problems when you're trying to submit claims.
• Staff Development: Invest in targeted training programs that focus on new documentation requirements and coding procedures. Your team needs to understand these changes inside and out. Invest in training now to prevent billing errors later. 

Success Strategies 

Successful implementation requires a systematic approach that balances compliance with operational efficiency.

1. Early Assessment 

Start by evaluating your current processes against new requirements. Identify gaps in technology, training, and documentation. This early assessment provides time to address deficiencies before implementation deadlines. 

 2. Take it Step by Step

Instead of trying to change everything at once, tackle these updates in phases. Start with training your staff, then update your systems, and finally put new workflows in place. This approach gives you room to adjust as you go. 

 3. Quality Monitoring 

Set up clear ways to measure how well the transition is going. Watch your claim rejection rates, how quickly you're getting paid, and how comfortable your staff is with the new procedures. If something's not working, you'll know right away. 

Partner with Lutz's Healthcare Experts 

Successfully navigating these Medicare changes requires experienced guidance and industry knowledge. At Lutz, our healthcare advisory team helps providers implement effective compliance strategies while optimizing reimbursement opportunities. We understand the unique challenges these updates present and can help design approaches that align with your organizational objectives. Contact us to explore how our expertise can help your facility transition smoothly to these new requirements.