FQHC revenue cycle management can be complex and resource-intensive. Outsourcing revenue cycle management in FQHCs (federally qualified health centers) holds potential benefits like streamlining operations, improving cash flow, and reducing administrative burdens. For revenue cycle leaders considering outsourcing, evaluating key areas such as billing and collections, timely filing, denial management, and revenue cycle KPIs is an effective way to assess the potential benefits. This process should start with evaluating best practices in these areas—reviewing them can help FQHC leadership make informed decisions about outsourcing.
Outsourcing FQHC revenue cycle management can offer numerous advantages, including access to specialized expertise, improved efficiency, and enhanced financial performance [1]. By partnering with a skilled vendor, FQHCs can focus on their core mission of delivering quality care while ensuring their revenue cycle operates smoothly.
FQHC Billing and Collections
Effective FQHC billing and collections processes are essential to maintaining cash flow and robust financial stability. Leadership should consider best practices including:
- Stratifying accounts by amount and aging to prioritize efforts
- Identifying Medicare and commercial accounts separately
- Leveraging clearinghouses and reviewing claim edits to minimize errors
Other areas of focus include staff education, covering payer contract requirements, coverage verification, appeals processes, timely filing rules, fee schedules, and special billing requirements.
Billing is critical as the initial billing drives over 80% of cash flow in an average FQHC facility, making it critical to the overall health of the organization. Outsourcing with the right partner can significantly improve efficiency and accuracy by mitigating common errors that might have been an ongoing problem for the revenue cycle department. For example, if a department has a history of rejected claims or high rates of denials, an outsourcing partner can help mitigate these issues. Rejections delay revenue and complicate timely filing, while denials require significant resources to appeal. Coders, billers and other revenue cycle staff must work these claims promptly and address the root causes to prevent future rejections.
Secondary billing is another core function of FQHC billing services. While Medicare automatically crosses over secondary claims to the correct payer, most commercial payers require manually generated claims with proof of primary payment and adjustment amounts. Ensuring follow-up on claim status and developing a formal collections policy can further enhance cash flow and reduce outstanding accounts receivable (A/R).
Improving Timely Filing for FQHCs
Timely filing is critical to positive FQHC revenue cycle management outcomes. Missing filing deadlines can result in significant revenue loss. Best practices include monitoring claims filing to ensure compliance with payer requirements, tracking write-offs due to missed deadlines, and implementing clear policies and procedures for billing staff.
Medicare allows one year for initial claims submission, but many commercial payers require claims within 90 days. Additionally, Medicare allows 120 days to respond to claim denials, while commercial payers may have varying deadlines. FQHC revenue cycle leaders should put a process in place to monitor claims that are on hold and ensure deadlines are met. Outsourcing partners can help mitigate issues with the percentage of claims not filed on time and the dollar amount of write-offs while providing senior leadership with insights into how these improvements are impacting financial results.
Denial Management for FQHCs
Effective FQHC denial management is essential for maximizing revenue and minimizing loss. Best practice includes tracking and reporting denials (by payer, type, reason, and department), designating a denial management team to appeal denials and implementing prevention processes such as prior authorization and registration quality assurance.
Common denial reasons for FQHCs include:
- Incorrect insurance identification
- Lack of medical necessity
- Missing prior authorizations
By addressing these issues with the help of an outsourced vendor, FQHCs can reduce denials and improve cash flow. A robust denial management program should include standardized appeal processes, interdisciplinary team collaboration, and ongoing staff education used in conjunction with third-party revenue cycle management options.
FQHC Revenue Cycle KPIs
Monitoring RCM key performance indicators (KPIs) is essential for effective FQHC revenue cycle management. Best practice includes holding weekly meetings to review KPIs, using dashboards to present KPI data, and setting goals to track progress toward objectives such as reducing days in A/R. KPIs such as clean claim rates, and denial rates should be prioritized when evaluating the value of outsourcing in a revenue cycle strategy. By leveraging dashboards, FQHCs can identify trends, address issues proactively, and drive continuous improvement. Ongoing issues with certain metrics can be an indication that leadership should consider outsourcing in their revenue cycle strategy.
Making the Outsourcing Call for Your FQHC
Outsourcing FQHC revenue cycle management can be transformative for organizations struggling with billing inefficiencies, denial management, and timely filing. By reviewing best practices, FQHC revenue cycle leaders can identify areas where outsourcing can add value.
To learn more about how outsourcing can benefit your organization, contact 3Gen Consulting today. Let us help you unlock the full potential of your FQHC revenue cycle management.
