GOOD NEWS AND A CHECKLIST

As you and your staff continue your amazing work for your patients and your communities, please know that everyone at CLC is keeping you in our thoughts and prayers. Thank you for all you are doing!

There is continued good news about FQHC funding. In round one of federal funding FQHCs received $100 million to help cope with the effects of COVID-19. The funding was pushed out within 18 days of the legislation’s approval.

In the latest round of federal funding approved the week of March 23, 2020, FQHCs will receive an additional $1.2 billion. The exact date this latest round of funding will arrive at health centers is undetermined, but it is believed that HRSA will push it out as quickly as possible.

As experts in your field, you have undoubtedly been diligently covering all your operational and financial bases. Still, if you are like us it never hurts to see a list.

Here is a checklist of items you might consider as you respond to COVID-19. If it is helpful, print this list and distribute accordingly:

COVID-19 Financial Planning for Community Health Centers

Step 1 – Short on cash?

  • Check out the new loan programs available at the federal level:

  • Keep a close eye on your account for the additional federal FQHC funding; be aware of the documentation that will be required for the use of these funds.

  • Establish a line of credit or request an increase if you have not done so already.

  • If you are low on funds you can consider drawing down your funding early but be cautious as to not cause funding shortages at the end of your grant period. The expenses must be in accordance with your approved grant budget.  Additionally, please ensure any drawdowns and expenses are in alignment with your financial and operational policies and procedures. Some agencies require board approval for disproportional drawdowns.

Step 2 - Create a tiered emergency response plan in case layoffs are needed

The financial effect of any layoffs will not be realized for 30 days due to payment of final payroll, benefits etc., so 30-day cash projections must be considered.

Staffing reductions are demoralizing and difficult and the last resort; however if this is necessary consider alternatives to layoffs which include pay reductions especially for highly paid staff, across the board reduction from full-time to part-time and benefit changes.

Almost every system’s revenue cycle has increased opportunities. Examples include fee schedule analysis, sliding fee increases (flat fee is easiest) and focusing on front desk collections.

Step 3 – Increase revenue with billing projects when encounters decrease

Initial patient encounters are dropping with average cancellation rates of 30-40%. If your billing staff’s workload decreases, consider having them work old aging in order to bring in cash that may be waiting in accounts receivable. One billing specialist FTE usually processes 10,000-12,000 encounters annually, so if encounters drop below this level, it may indicate that billing staff has capacity to process old aging.

Need additional projects for your billing team if they are slow?  Here are a few ideas:

  1. Work insurance denials 

  2. Write off uncollectable balances

  3. Process insurance and patient refunds

  4. Work patients credits and apply to other encounters if possible 

  5. If using a collection company go through accounts and send if you are behind

  6. See if you can help with any credentialing

  7. Work on any claims issues with payers that you are having

  8. Webinars are a great tool for additional training, particularly for industry updates

Step 4 - Contact your program officer if you have not already done so.

They may be able to give guidance or have up-to-the minute knowledge that may help.

Step 5 - Maintain daily and monthly routines in accounting

Now is not the time to get behind in bank reconciliations or to let internal controls slide. Maintaining audit requirements and accurate financials is still a necessity. Outsource financially critical tasks as necessary.

Step 6 - Create a point person to track incoming financial and compliance information to manage the flood of information. For the latest information on COVID-19 HRSA and CDC resources for health centers, check out this link which will be updated daily:  https://bphc.hrsa.gov/emergency-response

Step 7 - Create a weekly dashboard with leading indicators

Identify and monitor a handful of leading indicators that will forewarn you of potential issues. These might include canceled patient visits, no show rates, changing payer mix and ratios of support staff to provider, encounters per provider FTE (on a daily or weekly basis).

Step 8 - Contact local and state representatives as well as federal. Also contact your PCA

They may be able to help if you have specific requests for assistance. The PCAs are coordinating many of the efforts for community health centers.

Step 9 – Initiate cash flow projection worksheet to be updated weekly

Keep a close eye on days cash on hand. We are learning CHCs’ production is dropping significantly across the nation which will translate into cash flow reductions. Develop a cash projection worksheet and maintain it weekly. Community Link Consulting has a tool. Contact us at info@communitylinkconsulting.com if you are interested.

Step 10 – Manage expenses outside of payroll

Contact your vendors to negotiate payments plans if needed, reductions in fees or possible decreases in ordering.  Evaluate current inventories and manage supply ordering. We frequently see clinics who have more inventory stashed than they realize.

In this time of fear, being positive is needed. As leaders, many staff look to you to set the example and follow your lead. Be positive, offer hope, listen and support your co-workers through this crisis. At Community Link, the CHC systems on our hearts and minds.