Strengthening the Financial Foundation of FQHCs in Wake of Pandemic

Federally Qualified Health Centers have been the safety net for individuals in need for decades. However, even with increasing demand for their services – tripling the number of patients served to more than 28 million since 2000 – FQHCs are not immune from challenges stemming from the pandemic.

For years, many Americans have struggled to afford basic healthcare. The COVID-19 pandemic has exacerbated the situation, as millions of individuals lost their jobs, as well as the regular income and health insurance that often comes with it.

Federally Qualified Health Centers (FQHCs) have been the safety net for individuals in need for decades. These community-based healthcare centers provide a comprehensive set of essential health services – including primary care, behavioral health, chronic disease management, preventive care and other services – regardless of whether a patient has health insurance.

To support their ability to care for underserved populations and rural communities, FQHCs receive funds from the Health Resources & Services Administration (HRSA) Health Center Program and charge a sliding fee scale based on an individual’s ability to pay.

But even with increasing demand for their services – tripling the number of patients served to more than 28 million since 2000 – FQHCs are not immune from challenges stemming from the pandemic.

An Impending Financial Pandemic as a Result of COVID-19

As a result of COVID-19, FQHCs have experienced a 26% decline in patient visits, as patients complied with stay-at-home orders. While many of these centers pivoted quickly to provide care virtually, with 36% of visits delivered via telehealth, the loss in patient visits severely impacted their revenue, jeopardizing their financial viability even as they continue to play a critical role in the pandemic fight. Without additional support to cover the identified shortfall through June 2021, many staff members are expected to be laid off or furloughed, and 66% of FQHCs will drain cash reserves to dangerous levels. ​​

Since the pandemic began, FQHCs have received nearly $2 billion in rapid response grants from the federal government. But more support is needed to sustain services, since these grants represent only 7% of total health center revenues. In fact, a majority (68%) of a center’s revenue is from patient care, so the decrease in visits they are now experiencing is having significant negative impact on their overall financial health.

While technology can certainly empower FQHCs to address challenges that extend beyond the current pandemic, the evolution to value-based care has dramatically changed the business model and is requiring more documentation to show patient improvements, adding the stress of more administrative tasks to already strapped staff. Complicating matters is the fact that nearly half of all community health centers are contending with the need for more medical assistants, and about 40% report shortages of both nurses and licensed clinical social workers.

With such physician shortages, the increasing incidence of chronic disease and skyrocketing healthcare bills, it’s clear FQHCs are being tasked to do more with less, while also aiming to cut costs and optimize revenue. However, implementing the right technology, such as integrated patient engagement and revenue management tools, can streamline workflows, enable greater physician and staff efficiency, and help reduce the burnout that many medical professionals are currently experiencing.

Protecting the Bottom Line for America’s FQHCs with Innovative Technology

Many FQHCs are taking proactive steps to prevent the predicted revenue decrease from becoming a reality, while also seeking to alleviate burden amongst staff. One of the key moves FQHCs have made include implementing innovative, simplified technology, such as new patient engagement and revenue cycle management (RCM) solutions. These technologies enable centers to thrive by improving workflows and staff efficiency, boosting revenue and advancing health outcomes for patients, and enhancing the quality and access to care.

RCM is particularly important as centers adjust to the new realities of the COVID-19 era and seek to ensure business continuity over the long-term. For example, solutions providing medical billing expertise can help centers maintain the revenue services critical to cash flow – and keep them up-to-date on evolving CMS requirements and telemedicine reimbursements to ensure no money is being left on the table.

Like the majority of other centers, MVA Health Centers, an FQHC with multiple locations throughout West Virginia, experienced a deep decline in patient visits during COVID-19. While virtual care solutions were utilized to continue providing care, a significant portion of MVA’s patient base are elderly patients who either do not have access to or are not accustomed to using electronics as a means to healthcare. To overcome these temporary dips in patient volume, MVA Health Centers capitalized on its existing RCM solutions to maximize its current revenue and optimize the center’s financial health. By leveraging their dedicated team of financial care experts – via daily communications and bi-weekly meetings – MVA Health Centers was also able to avoid hiccups with its revenue cycle, despite frequent changes with coding and serving a lower patient volumes, which many FQHCs experienced throughout the pandemic.

Looking ahead, the center is optimistic about their financial health in 2021 and beyond, as its employees have gained the tools and training necessary to understand how their tasks impact practice health and the bottom line.

Regardless of size or location, FQHCs are a critical component to America’s healthcare system, and play a major role in treating and addressing chronic disease and population health through proactive care in the future. By implementing key technologies, providers in these centers can improve their financial stability, deliver the services the community requires and ease the strain on providers – all of which is key to achieving their ultimate goal of improving the health outcomes of millions of underserved patients.

Marvin Luz is senior director of Greenway Revenue Services at Greenway Health, a leading health information technology services provider.