Two main factors have fueled FQHC health center growth. The first is the investment of federal grant funding to build and support health centers. The second is increased revenues from the Medicaid program due to both expansions of Medicaid and Medicaid’s prospective, cost-based “Federally Qualified Health Center” (FQHC) payment methodology, which also applies to payments made by Medicare, CHIP, and qualified health plans (QHPs) operating in the new health insurance Marketplaces.
The FQHC rate enhances health centers’ capacity by covering much of the cost of care furnished to insured patients, which means that health centers do not have to use their grant funds to subsidize those patients, and can instead use their grants, as intended, to finance care for their uninsured patients and to expand both the scope of services they provide and the number of community locations in which they operate. Indeed, while health centers are serving increasing numbers of patients with Medicaid coverage, they are also serving more uninsured patients – up two-thirds over the past three years.
Two studies by KFC.org point to improvements in FQHCs who have enhanced their patient communications processes. One study, looking at the first 10 years in which the Medicare program was in effect, examined the impact of the earliest health centers, also established in that period. The study findings suggest that health centers associated with reductions in costs concerning billing patients with uncompensated care while lower-cost medication provided by health centers were likely more “sustainable” in other areas that impact the quality of care they can afford to give. The other study, using more recent data, examined the association between health center use by low-income Medicare beneficiaries and Medicare spending and clinical quality. The researchers found that, in regions where a relatively higher proportion of low-income residents were served by health centers, Medicare spending per beneficiary was significantly lower with no apparent compromise of clinical quality of care.
What this study suggests that leaving so many open ends in compensation actually increases costs and lowers the FQHCs patient satisfaction ratings.
Two ways to minimize the sensitivity of pursuing patient balances:
The first is associated with FQHCs providing a “patient advocacy” practice that insures that every patient who can afford to pay is provided an opportunity to reimburse the provider for his/her medical services.
The second is a “patient-friendly” process which should provide that all financial communications be correct, clear, and concise. By embracing these state-of-the-art practices, providers are supporting the sensitivity of the patient’s financial communication. No matter if your practice focuses on anesthesiology or you work for a hospital, each practice should be well thought out and, more importantly, effectively executed and communicated.
Bad debt should be limited to patients who can afford to pay but have elected not to.
This statement is precisely why Emerald A/R Systems is in business with FQHCs all across the country.
At the end of the day, the definition of bad debt should be limited to patients who could afford to pay and were offered various alternatives to reimburse providers for the services provided, but who elected not to pay for services rendered. In that population, there is a percentage that clearly will not pay for something that they do not understand. This is very apparent with hospital bad debt.
The public has become more cynical of healthcare billing. Horror stories of charging for services not rendered have created a climate of distrust. All the more reason for your FQHC to engage Emerald pro-active services for financial communications with your patients.
It is well known in the healthcare industry that even though you may provide the best clinical care, a poor administrative and financial communication process will totally destroy the brand and reputation of the healthcare provider. Use of a third-party collection firm is a best practice if—and only if—you have a premium partner to communicate with your patients from the point of service and to clearly define the services rendered and the intent to collect the unpaid balance.
FQHCs who offer various options to their patients and communicate well with the public are most likely to survive the wave of the future with patient consumerism.
Emerald is your patient advocate and friendly partner who can help you improve your bottom line.
Give Emerald a call today for a no-obligation quote for services. With no up front costs and a proven track record you have nothing to lose.
-Tom Jensen www.emeraldar.com firstname.lastname@example.org 623.242.2060