Mountain Creek Medical · Internal Working Exercise

RHC readiness, payer mix, and revenue opportunity.

The payer mix below is a planning estimate, not a substitute for a 12-month billing report.

~4,500 unique patients / year ~11,000 annual visits Family medicine ZIP 28779

Active patients~4,500

Annual visits~11,000

Current gross revenue~$2.0M

Shared savings~$200K

Target modelIndependent RHC

1

RHC Qualification Pre-Checklist

Verify the same operational, geographic, staffing, clinical, and billing criteria before moving toward survey and enrollment.

1. Rural & Shortage Designation (ZIP 28779 / Jackson County) The practice's physical street address falls inside a non-urbanized census area and holds an active Primary Care HPSA / MUA designation. Pre-Qualified by Rural Report

2. Ownership & Governance Structure Privately owned for-profit practice seeking to maximize owner equity and profitability (RHC allows 100% private ownership and normal profit distributions, unlike non-profit FQHCs). Matches Private Ownership

3. Mid-Level Provider Staffing (NP or PA) Employs at least one Nurse Practitioner (NP) or Physician Assistant (PA) via W-2 employment. Standard Primary Care Team

4. 50% Mid-Level Operating Coverage Rule An NP, PA, or Certified Nurse-Midwife is physically on-site and seeing patients for at least 50% of the clinic's published total operating hours. Operational Check

5. Six Mandatory In-House Point-of-Care Lab Tests CLIA-waived testing supplies on-site for: (1) Urinalysis dipstick, (2) Hemoglobin/Hematocrit, (3) Blood glucose, (4) Stool occult blood, (5) Urine pregnancy, and (6) Primary culture transport media. CLIA Waived Setup

6. Emergency Drug Kit & AED Readiness First-response crash box with unexpired emergency medications (epinephrine, naloxone, glucose, airway equipment) and documented emergency action plan. Safety Protocol

7. Medical Director & Annual Program Evaluation MD/DO designated for clinical policy reviews, chart sign-offs, and an annual evaluation committee including an outside non-employee community representative. Governance Setup

8. UB-04 / Institutional Billing Capability Billing software or clearinghouse able to submit CMS-1450 (UB-04) claims under revenue code 0521 with CG modifier to Part A MAC. Billing Transition

Readiness Score: 3 of 8 Criteria Confirmed (38%)

Core location and ownership requirements are met. Verify operational policies to achieve survey readiness.

Check all items

2

RHC Revenue Opportunity Model

Start with a locally reasonable payer-mix estimate, then separate Original Medicare from Medicare Advantage. The model intentionally treats Medicare Advantage and the NC Medicaid RHC rate as assumptions instead of automatically assigning the full RHC uplift.

A. Annual encounter mix

The working case uses 3,500 Medicare visits, 1,900 Medicaid visits, and 5,600 commercial / other visits across 11,000 annual encounters.

Working case Conservative Higher public payer

Total annual visits Practice baseline

Medicare visits Original + Medicare Advantage

Medicaid visits NC Medicaid total encounters

Commercial / other / self-pay Calculated remainder

B. How should Medicare Advantage be handled?

Medicare Advantage should not automatically receive the $165 Original Medicare RHC assumption. Choose the level of detail MCM actually knows.

Estimate the split I know the split All Original Medicare

Original Medicare share Planning assumption only

%

Medicare Advantage share Calculated balance

Original Medicare visits

Medicare Advantage visits

Current mode: the model splits Medicare 50/50 for planning. Change the percentage or switch to a known split when MCM pulls its payer report.

C. Reimbursement assumptions

These fields are editable on purpose. The calculator should show the effect of assumptions, not disguise them as confirmed rates.

Current Original Medicare avg / visit

$

RHC Medicare model rate CY 2026 AIR payment limit used as planning ceiling

$

Current Medicare Advantage avg / visit

$

Post-RHC Medicare Advantage avg / visit Default assumes no automatic lift

$

Current Medicaid avg / visit

$

Estimated NC RHC Medicaid all-in rate Editable planning placeholder

$

Important Medicaid assumption: North Carolina uses a provider-specific PPS/APM methodology. A newly qualified RHC can initially receive a “like-provider” rate based on similar nearby RHCs, so $120 here is an illustrative planning input, not an official MCM rate. Replace it as soon as a rate is available.

Current annual practice revenue

$

Shared savings / value-based revenue Displayed as preserved, not counted as lift

$

Why the rebuild matters: the former model applied RHC-like reimbursement to all 4,500 Medicare visits and all 2,200 Medicaid visits. This version starts with a lower Medicare volume, separates Medicare Advantage, and makes the Medicaid RHC rate explicit rather than hidden.

Estimated annual reimbursement opportunity

+$174,750

Approximately +$14,563 per month before conversion costs, collection differences, and payer-specific adjustments.

Planning model · payer mix still needs billing validation

Original Medicare visits1,750

Medicare Advantage visits1,750

Medicare lift+$89,250

Medicaid lift+$85,500

New modeled revenue$2,174,750

Top-line change+8.7%

This is an opportunity model, not a reimbursement guarantee. Medicare AIR rules, coinsurance/deductible treatment, Medicare Advantage contracts, Medicaid provider-specific rates, eligible encounters, bad debt, vaccines, cost reporting, and conversion expenses can materially change realized collections.

Model breakdown

See exactly which payer assumptions are creating the modeled lift.

Payer	Visits	Current rate	Modeled rate	Lift
Original Medicare	1,750	$114	$165	+$89,250
Medicare Advantage	1,750	$114	$114	$0
NC Medicaid	1,900	$75	$120	+$85,500
Commercial / other	5,600	Unchanged	Unchanged	$0
Total opportunity	11,000	Same annual visit volume		+$174,750

Model references: CMS CY 2026 RHC AIR payment limit ($165) and NC Medicaid's RHC PPS/APM framework, including provider-specific / like-provider methodology for newly qualified RHCs. CMS · NC Medicaid

3

Next Steps for Practice Leadership

Keep the original conversion milestones, but validate the payer data before treating the financial opportunity as a budget number.

Step 1

Obtain Official Address Certificate

Run the official CMS/HRSA “Am I Rural?” mapping report for MCM's exact street address in Sylva (28779) to attach to the state survey application.

Step 2

File Form CMS-855A Enrollment

Submit the Medicare institutional provider application via PECOS to Palmetto GBA (Part A MAC) to obtain the clinic's RHC billing identity.

Step 3

Fast-Track Deemed Accreditation

Utilize a CMS-approved deemed accreditation body (such as The Compliance Team Exemplary Provider program or AAAHC) to move through survey approval without relying exclusively on state backlog timing.

Before using the revenue number, pull one report.

A 12-month encounter report by payer should tell us Medicare FFS, Medicare Advantage, Medicaid, commercial, and self-pay visits. Once those counts are available, the payer-mix estimate can be replaced in minutes.

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