RCM improvement: Strengthening processes and diversifying revenue streams in FQHCs

The Affordable Care Act (ACA) has enabled millions of Americans to obtain health insurance coverage, but many are still unable to afford the plan they purchased.

Community health centers are counted on to provide care to these Americans as many will struggle to pay their bills and insurance plans will not reimburse organizations until deductibles are met. ACA has brought to the attention the need for federally qualified health centers (FQHCs) to strengthen existing revenue cycle management (RCM) processes and diversify revenue streams if they want to remain viable.

Strengthening Processes

Ensuring efficient RCM lifecycle processes is critical to an FQHC. The RCM lifecycle includes the time an appointment is scheduled through when payment is received (or denied) for the service provided. Here are four areas of focus for improving RCM.

1. Fee schedule. It is important to review the health center's fee schedule and ensure a charge is assigned for each service/procedure provided in the clinic. Recent Medicare Prospective Payment System changes for FQHCs forced many health centers to review their fee schedule as they had to establish charges for the G-codes. FQHCs should follow the two 330 principles governing charges which state that a health center must prepare a schedule of fees or payments for the provision of its services a) "consistent with local prevailing rates or charges" and b) "designed to cover its reasonable costs of operation" (PHS Act 330(k)(3)(G)(i) when deciding how to set fees.

Note: Fee schedules should reflect the costs of operation and the schedule of discounts should address issues with access.

2. Financial clearing process. The health center's front-end RCM processes must include methods to verify insurance coverage at the time of appointment scheduling. FQHCs can develop their call centers into more of a "patient navigation center" in which patient representatives are trained to schedule appointments, verify insurance coverage and start the process of obtaining authorizations. By verifying benefits, the health center can have a financial responsibility conversation with patients and more likely ensure collection of copayments and deductibles.

3. Technology. FQHC clinicians play an important role as they must correctly document the visits and accurately code for services provided. Ensuring timely charge capture will allow the health center to audit and review claims as appropriate, possibly leading to quicker reimbursement.
If an FQHC is using an electronic health record (EHR), then it will be important for there to be an interface between the EHR and practice management system (EPM). The interface will send the charges from the EHR to the EPM. It can also be configured to catch coding errors through claim scrubbing to identify missing modifiers, missing linkages between the procedure and diagnosis codes, and other payer-specific problems that can cause denied claims.
There are many EHR and EPM systems available. An FQHC should take its needs into consideration and review the capabilities of each system before purchasing.

4. Denial management. It is imperative for FQHCs to assign staff to monitor denial reasons and provide adequate staff training to prevent future errors. Using automation through an EPM allows the FQHC to set tasking alerts when an account has not been paid in a timely manner and prioritize work for billing specialist. Developing dashboards and aging reports will provide visibility into billing operations.

Diversifying Revenue

Seeking new sources or combinations of funding is an ongoing process necessary for financial sustainability for most nonprofits. Here are three areas of focus for FHQCs to diversify revenue.

1. Value-based reimbursement. Preparing for and participating in value-based reimbursement initiatives will offer an FQHC the ability test different models of payment and determine how the health center needs to plan for the future. The center should work with payers for opportunities to get reimbursed on the quality of care provided. New payment models, such as patient-centered medical homes, are likely to replace or at least supplement fee-for-service models. These models will emphasize coordinated care and quality of care measurements.

To participate in a value-based reimbursement initiative, the FQHC must set baseline measures for quality metrics and improve on performance. Conduct an assessment to determine readiness for value-based reimbursement and ensure baseline measures account for certain quality outcomes, patient experience or population health metrics.

2. Grant funds. Funding opportunities for providers that want to expand access and improve care for underserved and vulnerable populations are increasing. These funds will allow an FQHC to expand operations and continue to support innovative approaches to the delivery of primary and preventive health services. These awards come with the caveat that the health center must prove successful outcomes and metrics.

3. Collaborative efforts. Collaborative relationships between hospitals and community health centers can benefit both provider types as FQHCs are uniquely positioned to be an important partner for hospitals systems as they seek to improve health outcomes.

One method of collaboration we have seen work successfully involves hospitals assisting with funding for capital needs and helping build FQHC clinics by donating lease space. Some hospitals have found value in placing FQHC clinics on or near their campus to help ensure patients are appropriately seen in a primary care setting and not in the emergency room or inpatient setting.

Take the Initiative

As the healthcare market evolves, FQHCs need to strategically seek out innovative strategies or embrace new financial models. They will help FQHCs achieve financial sustainability and ensure the health center operates at optimal levels and maintains its mission of serving the community.

Maria Serafine is a consultant with and Joan Dentler is president and CEO of Avanza Healthcare Strategies, which provides hospitals and federally qualified health centers with strategic guidance, with a focus on outpatient services and population health management.As the healthcare market evolves, FQHCs need to strategically seek out innovative strategies or embrace new financial models. They will help FQHCs achieve financial sustainability and ensure the health center operates at optimal levels and maintains its mission of serving the community.

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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