CMS published a final rule on May 2, 2014 setting forth the methodology and payment rates for the new prospective payment system for FQHC services under Medicare Part B. FQHCs will transition to the new payment system beginning October 1, 2014, based on their cost reporting periods. Under the rule, Medicare generally will pay FQHCs a single encounter-based rate per beneficiary per day (initially set at $158.85), subject to certain adjustments and exceptions. For instance, the per diem rate is subject to a geographic adjustment factor, and it will be increased by 34% when an FQHC furnishes care to a patient that is new to the FQHC or to a beneficiary receiving a comprehensive initial Medicare visit. CMS is also allowing an exception to the single encounter-based payment when an illness or injury occurs subsequent to the initial visit, or when a mental health visit is furnished on the same day as the medical visit. CMS is accepting comments until July 1, 2014 on limited provisions impacting the FQHC PPS, including chronic care management, the use of new “G Codes” for Medicare payment to FQHCs under the PPS, and calculation of coinsurance for preventive services. Also as part of this rulemaking, CMS is finalizing a proposal to allow rural health clinics to contract with nonphysician practitioners when statutory requirements for employment of nurse practitioners and physician assistants are met. Finally, the rule amends the Clinical Laboratory Improvement Amendments (CLIA) of 1988 with regarding to enforcement actions for proficiency testing referral, in conformance with the Taking Essential Steps for Testing (TEST) Act of 2012.