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Rural Health Clinic (RHC)

What is a rural health clinic?

A rural health clinic (RHC), or rural health center, is an outpatient care facility that provides rural health services, such as primary care and routine laboratory services, to rural and often underserved communities. To qualify as a federally certified RHC, the clinic must be in a “non-urbanized” area categorized as a federally designated health professional shortage area. 

Congress established rural health clinics in 1977 with the passing of the Rural Health Clinic Services Act. This legislation provides underserved rural communities with greater healthcare access by increasing the number of practicing physicians, physician assistants and nurse practitioners in these areas. 

The government classifies these facilities as either independent or provider-based clinics. Independent, or freestanding, rural health clinics are physician-owned facilities. Healthcare providers operate provider-based rural health clinics as part of a hospital, home health agency or other healthcare facility. 

Additionally, RHCs may join an existing ACO or become their own ACO. 

What’s the difference between rural health clinics (RHCs) and Federally Qualified Health Centers (FQHCs)? 

Both RHCs and Federally Qualified Health Centers (FQHCs) provide medical care to low-income and underserved communities. But they are different in several meaningful ways: 

  • RHCs operate only in rural areas, while FQHCs may operate in rural or urban areas

  • RHCs are non-profit or for-profit, while FQHCs are non-profit or public

  • RHCs may only provide care under a specialty, like pediatrics, while FQHCs must provide care to all age groups with minimum service requirements  

  • RHCs do not have to charge patients on a sliding scale, while FQHCs do have to charge patients on a sliding scale 

Why are rural health clinics important?

RHCs and other health clinics, like FQHCs, provide care to patients who might not otherwise be able to receive the care they need. 

Because of the critical care these facilities provide, the Centers for Medicare and Medicaid Services (CMS) reimburses rural health clinics differently than they do for other healthcare providers. 

CMS reimburses care administered to Medicare and Medicaid beneficiaries at an RHC at an all-inclusive rate (AIR) as opposed to a fee-for-service rate. RHCs are reimbursed based on each patient “encounter,” including all associated care costs. This method contrasts starkly with the fee-for-service model, which reimburses providers at specific rates for each service they provide. Under the CARES Act, the government reimburses RHCs for telehealth services.