How A Formal Fee Assessment Drove Mission and Revenue Goals for an FQHC
A Federally Qualified Health Center (FQHC) in Midwest, this client offers a variety of services to its community, including medical, dental and mental health.
This FQHC was actively supporting its region with critical mental health, dental and medical services, but they had not formally assessed their fee schedule in years, and no official process existed to ensure their fees were appropriate. As with most FQHCs, they knew that lost revenue opportunities could impact their ability to meet their mission goals, but that dramatic fee adjustments could also disadvantage self-pay patients.
The FQHC’s revenue cycle manager enlisted the help of MMG to properly benchmark their fees and determine the potential impact of a fee adjustment.
Working in conjunction with the FQHC team, MMG reviewed all procedure codes billed over the last two years and the associated charge fee billed by the FQHC at multiple locations. MMG then used its modeling to compare the FQHC rates against:
- Medicare reimbursement rates for other FQHCs
- Medicaid reimbursement rates
- Workers’ Compensation rates
- MMG Proprietary Fee database showing market comparable rates for commercial payors
Following this analysis, MMG utilized internal benchmarks to ensure both the historic charge fees and the proposed fees would be consistent with local prevailing rates, as required by the Health Resources and Services Administration (HRSA). MMG also assessed each location’s Medicare Cost Report to ensure fees billed for visits were designed to cover actual reasonable costs as required by HRSA.
Based on this modeling and detailed assessment, MMG was able to provide an independent third-party assessment of the FQHC’s fees, as well as a proposed fee schedule complete with reasoning behind all suggested increases and decreases. The new fee schedule was designed to meet all requirements under HRSA without disadvantaging self-pay patients in the community.
Given a growing percentage of the FQHC’s business being paid by commercial payors, the charge fee schedule changes were projected to result in revenue increases exceeding $30,000 per year.
What’s more, MMG left the client with valuable tools and resources to better manage their fees in the future, including a proposed fee setting process to ensure consistency, alignment with the local market and practice costs, as well as automated reports to identify missed revenue opportunities.
Collectively, these solutions set the FQHC up for success in their fee schedule for years to come, allowing them to continue serving their patients and meeting their mission goals.