Medical Billing for Federally Qualified Health Centers

Blog Posts  |  29 September 2023

Written by: Cheryl Reifsnyder, PhD and Katie Wilson

Federally Qualified Health Centers (FQHCs) are federally funded nonprofit health centers that provide healthcare to medically underserved areas and populations. FQHCs provide primary care services, regardless of patients’ ability to pay, with fees based on a sliding scale. While FQHCs provide service in all types of areas, they are a vital healthcare “safety net” in rural areas of the U.S.; in 2022, the Health Center Program served more than 9 million rural residents, providing care to patients who might not have been able to afford or access healthcare otherwise.

All healthcare organizations must deal with the ever-shifting landscape of changing reporting regulations and payment requirements. However, as nonprofit organizations providing care to underserved populations, FQHCs face the unique challenge of keeping up with the changing regulatory landscape while operating under tight budgets or uncertain funding. This makes financial stability a crucial prerequisite for FQHCs to provide their clientele with high-quality patient care.

However, financial stability—along with its components, the medical billing process and overall revenue cycle management—is far more complex for FQHCs than for the average medical practice. Managing the FQHC’s revenue cycle requires careful attention to the details of documentation, coding, and regulations.

In this article, we look at 3 key strategies an FQHC can use to optimize payment while maintaining an atmosphere of quality patient care.

Strategy #1: Understand the FQHC payment cycle for timely claims submissions

The payment cycle is the entire process required for payment for the medical services an FQHC provides. It begins with patient pre-registration and verification of benefits, continues with the patient’s visit and coding of the most appropriate diagnostic code to correspond with the patient’s treatment, followed by claim creation, submission, and follow-up.

Revenue cycle management (RCM) aims to develop a process that helps the FQHC receive payment in full, as quickly as possible, for the services provided. Unfortunately, most bills and claims require lengthy periods for RCM processing.

FQHCs must act on each step of the RCM process accurately and correctly to ensure they can submit their claims in a timely manner. If any step in the cycle is missing or information is captured incorrectly, the error can lead to a partial or complete claim denial. This is why understanding the information required for each step of the payment cycle is essential for FQHC payment success.

The FQHC payment cycle encompasses 7 primary steps:

Step 1: Patient registration

The payment cycle begins at the first contact with the patient, during pre-registration and registration. Staff must capture accurate patient demographics and insurance information at the outset, when first scheduling the patient’s appointment. Gathering correct information at this initial step prevents the need to add to or correct information later in the process.

Step 2: Insurance and eligibility checks

Another critical step also occurs before the patient visit: Confirming the patient’s insurance coverage. This includes both confirmation that their insurance will be active at the time of their visit and determining whether the patient is eligible for the scheduled services.

For FQHCs, this step is complicated by the fact that FQHCs often serve diverse patient populations with varying eligibility for insurance coverage and payment programs. Verifying patient eligibility while navigating the complexities of sliding scale fees and the intricacies of payment can be time-consuming and error-prone.

Overcoming these challenges first requires the FQHC to establish an efficient process for verifying patient eligibility. They can also invest in technology solutions to streamline billing and payment (discussed further below). Finally, it’s essential to establish a procedure for clear communication with patients concerning their financial responsibilities before their initial visit. Clarifying patients’ financial responsibilities at the outset can enhance patient satisfaction and improve revenue collections.

Step 3: Documentation and coding

Another key step in the payment cycle is capturing accurate Current Procedural Terminology (CPT) and International Classification of Diseases (ICD-10) codes during and after the patient visit. Services must be documented specifically as outlined for FQHCs and documentation must be completed within a short timeframe after the visit to enable timely filing and avoid the payment issues that arise when claim filing is delayed.

FQHCs face complex billing and coding requirements. As healthcare regulations and payment policies are frequently changing, it can be challenging to stay current with the most recent requirements for coding, documentation, payer regulations, and so on. Overcoming these challenges requires FQHCs to 1) use certified coders when preparing claims and 2) invest in comprehensive training for all coding and billing staff to keep them up to date with current regulations and requirements.

Ensuring accurate coding, proper documentation, and compliance with regulatory guidelines enables the FQHC to minimize claim denials and reduce revenue leakage.

Step 4: Charges

Preparing clean claims for payment also requires entering accurate billing charges for the provided services. This step is made more complex because FQHCs operate using a sliding fee scale. Entering charges requires careful preparation and detailed review before finalizing.

Step 5: Claim review

Claim review is another crucial step in the payment cycle. This is the FQHC’s opportunity to review claims and identify any errors before finalizing them for submission—a critical step because a single error can result in a claim spending significantly longer in A/R, leading to claims denials.

Denied claims either remain unpaid or must be reworked and resubmitted—a costly process in terms of staff time and further delays in payment.

Step 6: Timely claim submission

Understanding and implementing each of the previous steps prepares the claim for timely submission. Timely submission helps to guarantee a timely payer review, with a correspondingly quick turnaround for payments. This is only possible if the prior steps are completed accurately and efficiently.

Step 7: Patient collections

Finally, once a claim has been resolved, the FQHC must follow up on any remaining balance with the patient. This step can be streamlined by earlier discussion of any financial responsibility the patient may have before the actual patient visit.

Strategy #2: Leverage technology to streamline the process of FQHC billing and payment

Like all medical facilities, FQHCs depend on the complete billing and payment cycle, from gathering information at pre-registration to accurate documentation of services provided to claims submission and follow-up. However, FQHCs must tackle these tasks with more limited resources and financial constraints than most medical organizations. Tight budgets combined with inadequate staffing often make it difficult for FQHCs to supply adequate resources for efficient management of billing, coding, claims preparation, and other essential processes.

Implementation of cost-effective technological solutions can help FQHCs overcome these challenges.

Electronic Health Records (EHRs)

Most healthcare organizations use certified EHR systems to streamline processes, increase efficiency, and comply with the Center for Medicare & Medicaid Services’ (CMS’s) Meaningful Use and Promoting Interoperability requirements. However, using EHRs goes far beyond storing data for patients’ electronic health records.

The Veradigm EHR, an ambulatory EHR platform designed to support the needs of busy practices, streamlines workflows and assists in recording essential patient information based on what’s been collected previously in similar circumstances. Customizable visit templates help simplify patient visit documentation, a vital step in RCM.

Practice management software

EHRs are not the only technology available to help FQHCs optimize payment. Improving payment also requires healthcare organizations to focus on reporting and analysis, reducing rejected or denied claims, and closely tracking full insurer and patient payments. Practice Management (PM) software is a crucial tool because it enables FQHCs to optimize their capabilities from patient registration to final payment.

Veradigm PM is a comprehensive RCM solution that can help boost FQHCs’ operational efficiencies and productivity at every step of the payment cycle. Advanced check-in features streamline front-desk processes, decreasing errors in the initial steps of patient registration. Front-desk operations also include a centralized area to view patients’ eligibility status; options for guided workflows can help improve collection rates and processes.

Automated, customized claims management workflows minimize errors and enable staff to review and resolve claims before submission. Real-time reporting provides easy access to the most current information on charges, payments, claims statuses, current A/R aging, and coding trends, to help measure the FQHC’s financial performance.

In addition, Veradigm monitors current program reforms and tracks upcoming regulatory changes to ensure your organization complies with the most current reporting and security mandates.

RCM software

Effective RCM also depends on accurate data management and accurate analytics. Leveraging RCM software to establish performance metrics on key performance indicators (KPIs) can help FQHCs use data-driven insights to optimize payment processes.

Veradigm Payerpath supports your FQHC’s success with a comprehensive suite of RCM solutions. Veradigm Payerpath reaches a network of over 3,100 payers and delivers an average of over 98% first-pass clean claims rate.1

Veradigm Payerpath’s Claims Management solutions help optimize the FQHC reimbursement process. Claims Management solutions include:

  • Claims Management system, to identify and retrieve missing information, incorrect codes, and data-entry errors that will result in rejected or denied claims
  • Remittance Management system, to notify users when electronic explanation of benefit (EOB) statements from payers are available for review
  • Notes, increasing operational efficiencies by enabling reconciliation of submitted claims with payer and trading partner reports, responses, and electronic remittances
  • Coding, compliance, and reference tools, encompassing a robust online coding library that provides coding guidelines, documentation, and policy information to assist compliance throughout complex technical and regulatory changes
  • Worker’s compensation system, streamlining every step in the worker’s compensation payment cycle, from eligibility verification through patient collections
  • Eligibility benefits inquiry system, providing real-time access to patient insurance information before patient visits

In addition, Veradigm Payerpath’s Patient Responsibility Solutions assist with improving patient payments. These include:

  • Patient statements, a fully automated and integrated solution offering high-quality, customizable, patient-friendly statements designed to improve patient payment rates through a preferred payment method
  • Veradigm eStatements with online bill pay, presenting patients’ financial responsibility and offering multiple payment methods from a dedicated patient engagement platform integrated with the FQHC’s billing system, so patient payments can be automatically and seamlessly posted back
  • Veradigm patient payment lockbox, an enhanced lockbox product that receives and processes all forms of mailed patient payments to a secure PO box, where payments are processed, imaged, and delivered electronically to the FQHC
  • Patient check-in and payment collection, an integrated revenue collection tool for front desk and billing personnel to process and record point-of-care patient payments

Veradigm Payerpath provides a complete system for managing every step in the payment cycle, ensuring prompt and accurate payments. Its web-based claims management system helps to eliminate the missing information, incorrect codes, and data-entry errors that result in rejected or denied claims.

Strategy #3: Consider outsourcing your medical billing services

Medical billing is always a complex process, but FQHCs’ medical billing services are unique, with nuances that require the attention of experts who understand the changing environment of government regulations and the importance of compliance with current coding and billing procedures. Only experts who understand the entire payment cycle for these specialized facilities can ensure accurate coding, proper documentation, and strict adherence to regulatory guidelines.

FQHCs must meet a stringent set of requirements, including providing care on a sliding fee scale based on patients’ ability to pay. FQHCs must also meet stringent requirements for patient visits, which must:

  • Be medically necessary
  • Be face-to-face medical or mental health qualified preventive health visits between the patient and FQHC practitioner, during which the practitioner provides one or more qualified FQHC services
  • Include, in certain limited circumstances, an RN or LPN homebound patient visit
  • Provide, under certain conditions, certified diabetes self-management training or medical nutritional therapy from a qualified practitioner

Initially, outsourcing medical billing might seem to remove an FQHC’s financial control—but that is not the case. Indeed, outsourcing can be a step toward creating greater success for the organization, as it lifts the burden of medical billing from FQHC staff, giving them greater freedom to focus on patient care.

Outsourcing medical billing can provide a more regulated and sustainable strategy for an FQHC’s RCM. Outsourcing can lead to fewer billing mistakes, resulting in faster payments and patient payments. Outsourcing can enhance transparency, as a reputable medical billing company will regularly generate reports based on established KPIs. Outsourcing can guarantee compliance with ever-changing healthcare regulations, as well as provide access to expert consulting. Outsourcing can even reduce costs, as it can be more expensive to manage an entire department of in-house billers than outsourcing the work.

All these advantages can lead to better patient care and greater patient satisfaction.

Questions about FQHC Medical Billing Services?

Do you have questions about FQHC Medical Billing Services? Contact us at Veradigm today!

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