FQHC Look-Alikes: The Key to Better Reimbursement and Healthcare Equity

As healthcare leaders grapple with sky-high expenses and other financial pressures, a little-known model may help them enhance reimbursement while expanding care access and potentially improving outcomes.

The Federally Qualified Health Center (FQHC) Look-Alike model expands healthcare services for Medicaid patients without the challenges and financial burden associated with establishing a full-fledged FQHC. It also opens the doors to substantial reimbursement opportunities from Medicaid and certain Medicare services, as well as benefits from the 340B Federal Drug Pricing Program.

The FQHC Look-Alike program may also help minimize health disparities as it expands access to quality healthcare services for vulnerable populations.

Despite its immense potential, the FQHC Look-Alike model remains largely overlooked due to limited awareness and misconceptions about its benefits.

Maintaining Payer Base and Infrastructure

Many leaders don’t know that the FQHC Look-Alike model utilizes health systems’ existing infrastructure and does not drastically change the way a practice operates. While there are some requirements from the Health Resources and Services Administration the core of the practice and patient care remains unchanged. Providers can continue to operate within their existing facilities so long as they meet certain criteria, such as adopting a sliding fee scale. Many practices in urban areas might already have a sliding fee scale in place, but they haven’t realized the FQHC Look-Alike benefits.

Some leaders worry that participating in the program restricts them from continuing to serve insured and private pay patients. Instead, it allows them to continue operating as they do today while also benefiting from improved reimbursement.

While healthcare organizations can potentially become a full FQHC in the future, a Look-Alike designation is a great starting point and easier than starting a full FQHC.  Providers in high-need areas can maintain their current operations under the FQHC Look-Alike approach, continuing to care for their existing patient base while augmenting their services to Medicaid populations.

This method not only sustains current revenue streams but also opens up new avenues for growth while improving community health.

Partnership, Not Competition, With Existing FQHCs

While some hospitals and health systems serve areas where the population in need is minimal, most practices already engaged in serving underserved patients can qualify and benefit from the FQHC Look-Alike program.

Crucially, FQHC Look-Alikes do not compete for funding or resources with existing FQHCs. Rather, they complement each other in expanding access to care for the underserved.

As health disparities grow in the wake of the pandemic, the FQHC Look-Alike program ensures that individuals who may have faced barriers to healthcare in the past, such as financial constraints or limited access to services, can now receive the medical attention they need. This helps providers address health issues at an early stage, leading to better health outcomes and a reduction in long-standing disparities. By expanding services, providers are enhancing continuity of care within their communities, facilitating better coordination among providers, and ultimately contributing to improved community health. This makes for a win-win for health systems and the communities they serve.

How We Can Help

There are compliance requirements to qualify as an FQHC Look-Alike, such as offering a sliding fee scale, having a board of directors for the health center, and being in a federally designated high-need area or demonstrating that they are serving such areas. While the process is not without challenges, many organizations find that the financial and community benefits are worth it.

We have successfully led organizations through the process of becoming an FQHC Look-Alike, and we have seen beneficial outcomes: Health systems that have embraced this approach have realized notable reductions in health disparities and improved reimbursement.

Curious whether your hospital could qualify and what might be involved? Contact us today to learn more about how our experienced advisors can help you navigate the process to achieve this designation.