Strategic RHC AIR Calculations for 2026: A Deep Dive into Cost-Based Reimbursement

Form CMS-222-17 is the mandatory annual cost report used by independent (freestanding) Rural Health Clinics (RHCs) to determine their Medicare reimbursement. Filed within 150 to 180 days after the end of a clinic’s fiscal year, this document provides the Centers for Medicare & Medicaid Services (CMS) with a comprehensive snapshot of a clinic's financial and operational health. It is the primary mechanism for calculating the clinic’s All-Inclusive Rate (AIR)—the flat fee Medicare pays per patient visit—by reconciling total allowable costs against the total number of patient encounters. Accurate completion is critical; errors in reporting staff time or overhead can lead to significantly lower reimbursement rates or even the suspension of Medicare payments.

Key Components and Requirements
Purpose: Replaces the older CMS-222-92 form to modernize how data is collected, including more detailed tracking of medical and mental health visits.

Who Files: Required for all independent RHCs and those that were formerly part of a Skilled Nursing Facility (SNF) or Home Health Agency (HHA) complex. Note: Hospital-based RHCs generally use Form CMS-2552-10 instead.

Worksheet S Series: Handles the certification and status of the report, including the mandatory signature from the Chief Financial Officer or Administrator.

Worksheet A: Organizes the "Trial Balance of Expenses," where you separate general service costs from direct patient care costs.

Worksheet B & C: These are the "engine" of the report where the productivity standards are applied and the final Medicare rate per visit is calculated.

Vaccine Reporting: Specifically tracks costs and visits for Pneumococcal, Influenza, and COVID-19 vaccines (Worksheet B-1), which are reimbursed outside of the standard AIR.