FQHCs Boost Revenue Through MassHealth Change in Scope of Services

AAFCPAs would like to make Federally Qualified Health Center (FQHC) clients in Massachusetts aware that MassHealth change in scope guidelines provide an adjustment process for certain changes in scope and an associated boost in revenue through an increased Prospective Payment System (PPS) rate. The U.S. Department of Health and Human Services (HHS) defines a change in scope for FQHC/RHC services as adding or dropping services covered by Medicaid under the approved Medicaid state plan. This includes a change in the type, intensity, duration, or volume of services. Note that a change in cost alone does not qualify as a change in scope. State agencies need to account for the cost of new services even if they do not involve a face-to-face visit, such as lab work, x-rays, drugs, outreach, case management, and transportation.

MassHealth defines a qualifying event as the addition or removal of an FQHC service that affects its existing PPS rate. This includes an increase in service intensity due to a change in types of patients served, for instance if you begin to serve a higher risk population. It also includes a change to service delivery methods, such as the integration of telehealth services. A qualifying event could also involve a change in service due to new technology or medical practice, a change in service volume, or capitalized expenses related to those changes, such as rent, mortgage interest, amortization, equipment leases, or depreciation of assets such as buildings, fixtures, equipment, or motor vehicles. AAFCPAs advises that clients look into any event which may increase costs resulting in a corresponding increase to the cost per visit.

The cost associated with a change in scope must amount to a change in your existing PPS rate by three percent or more and must be subject to reasonable cost criteria. If the three percent threshold is met, your PPS rate will increase by ten percent. Clients must submit a change in scope request within 18 months from the date of implementation of the change in scope event and must include data for a six-month period following implementation. Rate changes are retroactive to the implementation date but may not exceed eight months prior to the submission date. Applicants may combine multiple change in scope events across an 18-month period to justify a change in scope submission and to reach the three percent threshold. Because there is a six-month look-back period prior to submission, AAFCPAs advises that clients remain vigilant to opportunities that could increase reimbursement. The opportunity to realize a 10 percent increase in reimbursement rates is significant and should not be overlooked.

How We Help

AAFCPAs helps FQHCs increase reimbursement by analyzing events that could qualify for a change in scope and by providing guidance as to whether it is something you should consider. We can help clients strategize and assess the potential impact of revenue proactively while projects are still in the planning phase. We are also available to assist with application preparation and submission.

If you have questions, please contact Matthew Hutt, CPA, CGMA, Partner at 774.512.4043 or mhutt@nullaafcpa.com—or your AAFCPAs Partner.