The May 31st deadline by which Federally Qualified Health Centers (FQHCs) must submit plans to the Health Resources and Services Administration (HRSA) for how they plan to invest their share of the once in a generation $6.1B of supplemental federal grant funding is fast approaching. The leadership and boards of these community health centers should by now be deep into their priority and budget planning activities. Many will recognize the significant opportunity these grant funds will play by directing investments toward strategies to broaden the population served, extend their programs’ impact, and bolster their staff and operating infrastructure to ensure ongoing financial sustainability. Given the broad flexibility allowed to FQHCs on the use of these grants, executive teams and governing boards will want to think critically about what investments will engender long term value.
Strategy Development and Planning
FQHCs have historically been extremely adept at securing grant funding to undertake planning activities to frame a multi-year strategic plan and access advisory and consulting expertise to guide the implementation of such plans. In the past, forces constraining such efforts have included narrow grant scope, the cost of professional services and the changing financial circumstances of FQHCs to realize these strategic objectives over a multi-year time horizon. Too often, administrative and regulatory changes at the state and federal levels require management to juggle shifting reimbursement, thus compelling a shift in tactics before long-term plans come to fruition. With a grant period enabling allocation of planning dollars back to January 2020, through the end of calendar 2023, American Rescue Plan Act funds are ideally structured to allow health centers to contract with trusted advisors to update or develop de novo a strategic and operating plan. Utilizing the expertise of strategy consultants to form such a plan and supplement the bandwidth of the leadership team with project and program management throughout the three-year grant period will contribute significantly to overcoming historical constraints.
Community health centers compete for skilled clinical and non-clinical staff on the open market and given razor-thin margins have often fallen behind in their ability to offer competitive salaries and hourly wages in relation to larger hospital systems and private provider organizations. Top of mind for FQHC management is the opportunity to narrow the pay-equity gap for their workers by increasing compensation, improving benefits and investing in recruitment efforts to fill vacancies across their programs and central operations. Sustaining new compensation levels to remain competitive once grant funds have been exhausted requires a thoughtful approach, balancing the goals of targeting wage increases to the most difficult to recruit roles and to positions which will support additional future revenue generation. Leaders will be wise to invest in human resources that improve capacity, strengthen revenue capture and broaden the mix of services the center offers to secure new sources of income for the future.
In alignment with a plan for strengthening wages and employee retention lies the opportunity to make meaningful impact to underserved populations through the extension of existing programs and services. As intake of new patients translates into increased fee for service and case-based revenues, extending current programs to reach an extended panel of residents in the FQHCs catchment area may be realized. Methods may include advertising, community outreach efforts, forging new community partnerships and referral programs, additional staffing or extension of services via mobile units, telehealth technologies, and increasing sites or hours of operation.
New Services Development
The scale of this year’s HRSA awards, representing one-time grants equal to about 20% of annual FQHC revenue, are significant enough to support the creation of new service lines under the community health center umbrella. Priorities in this regard will vary by community reflecting the constellation of service providers available now, and the gaps each individual center finds in the needs of the populations they serve. The NextGen Advisors recently convened a webinar with leaders from three FQHCs on the topic of “Build, Buy, Merge”, which explored different approaches to how successful health centers have extended their services through a combination of growth models. For more information and to watch the webinar, see here.
Modernizing Physical Space
The COVID-19 pandemic revealed how rapidly practices are capable of transforming workflows and the use of physical space in response to the need for social distancing, triaging patients for routine care or testing services. In designing for the optimal use of space going forward, HRSA grant funds may be used for planning, construction and expansion purposes. The chance to modernize physical space may be an important priority for many health centers to consider reflecting the opportunity for some non-clinical teams to work from home or for others to share office space rotationally. Other needs may include dedicated zones for conducting telehealth visits and video conferences, expanding multi-purpose flexible spaces and re-imagining large waiting room areas that can be converted for more productive purposes.
Information Technology and Operating Infrastructure
Spending for integrated healthcare technology to enable practice operations may be one of the most transformative investments FQHCs can make at this time, and one which many organizations have deferred for lack of capital funds. As practices consider the changing nature of care delivery and the needs of their population, capabilities for telehealth visits integrated with the EHR enable for the efficient use of clinician time and can reduce no-show appointments dramatically. They also add flexibility to schedule additional patient visits during open hours, or to extend the volume of patients that can be seen on the schedule, improving the financial bottom line. Population health management capabilities integrated with the EHR allow practices to identify their highest need, chronic patients or those with rising risk scores in a proactive manner. Such groups can be assigned to cohorts for proactive outreach and management, enrollment in care management and care navigation programs to improve patient engagement, patient clinical outcomes, clinical performance measures and revenue. Other clinical technology needs may include updating patient portals with advanced capabilities for self-scheduling, document exchange and secure communication. Providers may be seeking mobile versions of their EHR to facilitate working from home, providing curbside consultations or completing chart documentation securely after hours. On the non-clinical side, FQHCs may be using the HRSA grant opportunity to update practice management, scheduling and billing systems into modern platforms, or contracting for revenue capture management solutions to improve collections, reduce A/R and maximize revenues.
FQHCs have a unique and time-limited opportunity to ensure the grant funds available through the American Rescue Plan Act contribute meaningfully to advancing their important mission serving communities across the country. With limited ability to modify how funds will be spent once plans and budgets are submitted and approved by HRSA, time is of the essence to define plans that support strategic growth in a sustainable manner for the years ahead.
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