Budgeting & Forecasting Patient Service Revenue: How FQHCs Can Be Better Equipped for 2025

As Federally Qualified Health Centers (FQHCs) gear up for 2025, it's crucial to focus on strategies and best practices to optimize financial health and boost patient engagement. FQHCs are at the forefront of providing essential healthcare services to underserved communities, and effectively managing patient service revenue while maximizing patient visits is key to sustaining and growing your impact.

Below, we'll explore strategies and best practices to help your center optimize its financial health and boost patient engagement, ensuring that you can continue to provide high-quality care to those who need it most.

Patient Service Revenue vs. Program Service Revenue

Understanding the distinction between Patient Service Revenue and Program Service Revenue is essential for FQHCs. Patient Service Revenue encompasses the income generated from services provided to patients, including medical consultations, diagnostic tests, and procedures. On the other hand, Program Service Revenue refers to funds received from grants, contracts, and other programs.

When accounting for Patient Service Revenue, it is important to differentiate this from Program Service Revenue so your FQHC's analysis of your budget is as accurate as possible. For the purpose of this article, we will be taking an in-depth look at Patient Service Revenue.

Challenges FQHCs Face When Maximizing Patient Service Revenue

FQHCs encounter various challenges when it comes to maximizing Patient Service Revenue. One challenge is that when leaders look at financials, they may see a blended reality, not specifically patient service revenue. This can be misleading.

Another speed bump can be when A/R balances differ from accounting software to billing systems. When budgeting and forecasting for 2025, you should be asking: Does the AR on our FQHC financial statement match our billing system? And if not, why?

• Allowances for bad debt?
• Contract adjustments?
• Not collectible balances?

Additional challenges may include navigating complex billing and coding requirements, managing uninsured or underinsured patient populations, and ensuring compliance with evolving healthcare regulations.

The Impact of Accurate Billing and Coding on Revenue

Accurate billing and coding play a pivotal role in maximizing Patient Service Revenue for FQHCs. Proper documentation and coding of services provided not only ensure fair reimbursement but also contribute to the overall financial health of the center. Investing in training for staff involved in billing and coding can yield significant returns in the form of improved revenue capture.

Your budgeting should start by taking a look at the past. Try taking a look at:

• How many of your claims pay
• Value Base Care & Incentive Dollars
• Fee-for-Service reimbursement
• Service bundling

By employing efficient billing and coding practices, accurate documentation, and timely claim submissions, FQHCs can minimize claim denials, reduce billing errors, and accelerate reimbursement cycles.

Key Steps in Budgeting for Patient Service Revenue

When budgeting for Patient Service Revenue, it should start with an in-depth analysis. FQHCs should consider factors such as patient volume projections, payer mix, reimbursement rates, and anticipated changes in service offerings. Developing a comprehensive budget that aligns with revenue goals and operational needs is crucial for financial stability and growth. Let's take a look at some of these steps:

• Group revenue streams by reimbursement type.
• Identify contracted rates for each payer.
• Compare actual vs. anticipated to know your revenue gap.

• How effective have you been at converting billed visits into paid visits?
• What percentage of potential revenue should you forecast or budget?
• What is your historic bad debt percentage, and how much should you allow for it?

• What were last year's fixed and variable expenses?
• What is your expected provider productivity vs actual?
• What expenses are anticipated in this fiscal year?
• What are the potential shortfalls or gaps?

• Where can you make improvements to collections?
• What's your cost per visit for CMS (Medicare & Medicaid) as compared to what you are receiving on avg?
• Do you need to have your PPS rate re-assessed?
• Do you have lines of business or providers with the capacity to see more patients?

Best Practices for Boosting Patient Visits

Boosting patient visits is a great step in growing your revenue for 2025. If your FQHC has revenue targets that require growth, like expansion, this strategic tool can help to meet those realistic goals. Some tips for keeping patients coming back, encouraging the positive word to spread about your health center, and growing the number of patients that walk through your doors include:

• Enhancing Patient Experience - Improve the patient journey from appt scheduling to follow-up care.
• Community Outreach and Engagement - Develop programs to connect with the community and raise awareness of available services.
• Leveraging Telehealth - Utilize telehealth to reach more patients and provide convenient care options.
• Partnerships and Collaboration - Work with local organizations and healthcare providers to expand reach and services.

Measuring For Success: KPIs as the Barometer of FQHC Health and Sustainability

To gauge the effectiveness of strategies aimed at optimizing Patient Service Revenue, FQHCs should establish and monitor Key Performance Indicators (KPIs). Regularly tracking these KPIs allows FQHCs to identify areas for improvement and make data-driven decisions. Profit is not a dirty word, and these KPIs help your FQHC grow profit while benefiting the communities it serves.

• Operating Margin
• Cost per Visit
• Clean Claim Rate
• Patient Collections Rate

Taking your data to actionable steps means leveraging these KPIs for improvement. Your FQHC can achieve this by establishing clear benchmarks, regularly reviewing and analyzing data, and participating in collaborative decision-making.

An FQHC's Superpower: Optimizing Budgeting & Forecasting for 2025

FQHCs can better equip themselves for 2025 by focusing on optimizing budgeting and forecasting for Patient Service Revenue. By addressing the challenges, leveraging accurate billing and coding practices, and implementing robust budgeting and measurement strategies, FQHCs can ensure their financial stability while continuing to provide high-quality care to those who need it most. And as the top revenue cycle management company, Synergy Billing can help! Contact us today.