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Public Notice of Final Action for Federally Qualified Health Centers (FQHCs) Payment Methodology

The South Carolina Department of Health and Human Services (SCDHHS), pursuant to the requirements of Section 1902(a)(13)(A) of the Social Security Act, gives notice of the following actions regarding its methods and standards for paying providers under the State Plan under Title XIX of the Social Security Act Medical Assistance Program (Medicaid).

Effective for services provided on or after July 1, 2023, SCDHHS will amend the South Carolina Title XIX State Plan by revising the Medicaid rate setting methodology for FQHCs. This payment change will impact only those FQHCs that are currently being reimbursed under the alternate payment methodology (APM). The prospective payment system (PPS) rates determined under this methodology will continue to be considered an APM. SCDHHS will establish the rate using the base year 2021 cost reports trended forward to the annual payment period using the midpoint-to-midpoint trending methodology. In addition to the above change, SCDHHS will amend the following used to establish the FQHC PPS encounter rates:


  • Overhead cost allowance increased from 30% to the 75th percentile;
  • Minimum productivity levels (MPLs) set at 3,160 for physicians, 3,160 for OB/GYN physicians and 2,585 for mid-level practitioners.

The agency will implement the above actions to provide 100% of the Medicaid reimbursement upon payment of each Medicaid fee-for-service claim in lieu of annual cost report reviews that result in either under or overpayments.

Based on the action above, SCDHHS anticipates a budget impact of approximately $39 million (total dollars) per year.

Copies of this notice are available at each South Carolina Healthy Connections Medicaid county office and at for public review. Additional information regarding this action is available upon request at the address cited below.

Any written comments submitted may be reviewed by the public at SCDHHS, Division of Ancillary Reimbursements, 1801 Main Street, Columbia, South Carolina, Monday through Friday between 9 a.m. and 5 p.m.

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