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How FQHCs Can Use Retroactive Medicaid to Grow Revenue

Mar 14, 2024 11:31:00 AM / by Altruis


Organizations that care for Medicaid patients and the underserved often end up with substantial self-pay write-offs. After all, federally qualified health centers FQHCs and other safety-net organizations don’t turn anyone away. Their mission is to provide high-quality care to all, regardless of insurance status or ability to pay.

For these organizations, the backlog of self-pay balances builds up while providers are left with little to no effective recourse. Sending the accounts to collections typically fails to recoup meaningful reimbursement.

Traditional collection methods risk stressing and even alienating underserved self-pay patients who need critical additional or follow-up care. Worried they’ll be turned away or pressed to pay their balance on-site, patients with unpaid balances may avoid appointments and shy away from contacting (or responding to) their providers. 

In the worst cases, patients end up in the ER when the right preventive or outpatient care could have averted the need for an emergency visit. Meanwhile, on the financial side, organizations that previously provided care for these patients aren’t reimbursed for the care they delivered, creating a perpetual cycle of uncompensated care, self-pay write-offs, and bad debt.

For providers, there’s no silver bullet. However, there is a way to tackle self-pay balances without resorting to traditional (and ineffective) patient collections and turn them into revenue.

What is FQHC Retroactive Medicaid?

A significant percentage of self-pay patients later become eligible for retroactive Medicaid coverage. After these newly eligible patients are successfully enrolled, their Medicaid or managed care organization (MCO) coverage can be applied retroactively to cover care provided in the months preceding their application. 

This turns likely write-offs into meaningful revenue for providers. What is FQHC coverage potential with this strategy? Here’s a statistic that provides some insight.

A study by the USC-Brookings-Schaeffer Initiative for Health Policy found that before the implementation of the Affordable Care Act (ACA), about 5% of Medicaid spending occurred during a retroactive coverage period. Post-ACA, about 14% of beneficiaries have retroactive Medicaid coverage claims.

Why aren’t Medicaid-eligible patients already enrolled?

  • They may think the enrollment process is automatic and something that CMS or the provider completes on their behalf.
  • They might be unsure how to apply.
  • They may need assistance completing the application. This is especially true for those in crisis and those with severely limited access to transportation, technology, and other resources.
  • The simplest reason: they may not realize they’re eligible.

Whatever the reason, there’s often a lag between when a provider delivers care and when that self-pay patient becomes a Medicaid enrollee.

How to Grow Medicaid Revenue: Identify, Bill, Collect

When coverage can be effectively identified and billed after the fact — within the timely filing window — providers can retroactively turn uncompensated care into Medicaid and MCO reimbursement.

Then, as the provider continues to serve these patients, billing and collecting becomes much more straightforward, predictable, and cost-effective. The patient’s eligibility can be updated in their patient record for future visits, ensuring all relevant payers are billed quickly and accurately for all eligible patient encounters. 

Write-offs decrease. Retroactive Medicaid revenue that would have been written off is recovered. Baseline Medicaid revenue goes up. Ultimately, the clinic is much more profitable.

Strengthening Medicaid and MCO Reimbursement: An Example

Here’s a real-world example of how FQHCs can grow Medicaid revenue through MCO reimbursement. In this example, a safety-net organization with significant self-pay volume and average monthly Medicaid revenue of $350,000 implemented a new technology-enabled service to identify, bill, and collect retroactive Medicaid reimbursement.

Altruis RetroPay™ enabled the automated monitoring of all unreimbursed self-pay encounters that had not yet passed timely filing deadlines. When billable coverage was identified, eligible encounters were automatically billed and collected.


The results speak for themselves:

In the 6 months following go-live, RetroPay™ captured $750,000 in retroactive Medicaid reimbursement and $145,000 in additional incremental MCO reimbursement for patients identified through RetroPay™. This accounted for $895,000 in revenue that otherwise would have been written off.

In month 6, baseline monthly Medicaid revenue was up 78% compared to the year-over-year average. Within half a year, this safety-net organization was collecting an astounding $650,000 vs. $350,000.

That’s powerful stuff, especially for organizations operating on such tight financial models. And while the dollar amounts are impressive, what’s more meaningful is the impact of more resources to empower the mission of serving others.

Can you see your organization reflected in this story? If so, Altruis can help you turn this vision into a reality for your clinic and community.

To learn more about turning uncompensated care into healthier revenues, check out Altruis RetroPay™ or contact us today.


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Topics: Retroactive Medicaid, What is FQHC


Written by Altruis

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