Medicaid Rate Setting & PPS Optimization Services for FQHCs

Medicaid Change in Scope refers to an adjustment in your FQHC's reimbursement rate due to significant changes in the scope of services provided. You may qualify when adding or removing service lines, expanding facilities or sites, experiencing significant changes in patient population characteristics, substantially changing service intensity levels, making major technology or equipment investments, or implementing regulatory or compliance-driven operational changes. If any of these situations apply to your organization, we can help determine whether pursuing a CIS would be financially beneficial. 

The Medicaid Prospective Payment System establishes a per-visit rate based on 100% of your reasonable costs for furnishing FQHC services during a base period. This rate is adjusted annually by the Medicare Economic Index (MEI) to reflect inflation. When significant scope changes occur, you can request a rate recalculation through the Change in Scope process. Each state has different requirements for what qualifies as a significant change, how cost reports should be prepared, and what documentation is required. States must also make supplemental or wraparound payments to cover any difference between managed care payments and your PPS rate if the PPS rate is higher. 

This is the most common concern we hear from health centers, and it's why our process begins with comprehensive analysis before any submission. We model the potential impact of a rate adjustment using your current financial and operational data, allowing you to make an informed decision about whether to proceed. Our expertise in cost report preparation and understanding of state-specific methodologies helps us present your cost structure in the most favorable light while maintaining complete compliance. In our extensive experience, properly prepared submissions result in rate increases, not decreases, when opportunities are carefully evaluated beforehand. 

Timeline varies significantly by state, typically ranging from 3 to 9 months from initial submission to final rate approval and implementation. Some states have more streamlined processes with clear timelines, while others require extensive review and may request additional information during evaluation. We help you understand your state's typical timeline and work to expedite the process through our relationships with state agencies and thorough initial submissions that minimize back-and-forth requests for clarification. 

The annual financial impact of a successful Medicaid rate adjustment often equals or exceeds the value of major grant opportunities that health centers actively pursue. Unlike one-time grants, an increased PPS rate provides ongoing, recurring revenue for every Medicaid visit indefinitely. For example, even a modest 15% rate increase for a health center with 20,000 annual Medicaid visits at a $150 base rate generates $450,000 in additional annual revenue. Over a five-year period, this represents $2.25 million in increased reimbursement compared to the finite funding period of most grants. This is why we're passionate about helping health centers recognize rate setting as a critical financial strategy, not just a compliance obligation. 

Absolutely. We've worked directly with several Primary Care Associations to develop standardized rate setting support programs for their member health centers. This includes creating documented procedures for CIS identification and submission, providing training for PCA staff on state-specific requirements, developing tools for preliminary rate impact analysis, and offering ongoing consultation as state regulations evolve. We can also coordinate directly with state Medicaid agencies alongside PCAs to advocate for process improvements that benefit all health centers in the state.