The future of FQHC funding

These days, FQHCs need to be innovative and find new revenue sources to supplement federal funding.

Before we look at 2019 and talk about where we are, it’s important to understand where we came from and how we got to today’s conversations concerning the funding community health centers receive and rely.  A recent Kaiser Family Foundation issue brief Community Health Center Financing: The Role of Medicaid and Section 330 Grant Funding Explained looks at the different

revenue sources for community health centers, how they’ve changed over time, how each contributes to the critical role that health centers have in the communities across the country and the importance of continued government funding that seems to decrease every year.

According to the issue brief, “nearly all [FQHC] patients (91 percent) were low-income and 69 percent were poor” in 2017. Additionally, FQHC patients “tend to be poorer in health.” “In 2017, nearly 49 percent of all health center patients were covered by Medicaid and approximately 23 percent were uninsured.”
The majority of funding for FQHCs comes from Medicaid (44 percent) and Section 330 grants (18 percent). Medicaid agencies work with health centers to develop alternative payment methodologies (APMs) to test innovative payment approaches that keep the payment linked to the cost of care. Payments are now being tied to provider performance and quality of patient care instead of volume (value-based care model) which is changing the way community health centers generate revenue today.
With the cost of care rising faster than the payment rate in some instances, community health centers’ leaders must work together to increase their net revenue in innovative ways.

How much do you depend on federal grant funding for operational costs? Let’s work together to implement innovative solutions that improve your net revenue and help you achieve financial independence.

Contact us if you’re interested in customized opportunities that will increase your net revenue through practice expansion, revenue cycle and/or 340B pharmacy.

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