The cash is rarely where you need it, want it, or expect it to be. Days in AR stay stubbornly high, denials never seem to fully close out, and the margin that used to absorb those problems has disappeared. KFF’s health center data shows the average health center finished 2024 with a net margin of negative 2.1%, while Medicaid made up 45% of total revenue. When that much of the budget depends on one payer, the way your billing office handles that payer becomes a strategic decision rather than a back-office one.
The next few months make that decision harder to put off. As of October 1, 2026, Medicare replaces G2025 for health center telehealth visits with specific CPT and HCPCS codes. Then on January 1, 2027, expansion states begin work reporting requirements, six-month eligibility reviews and a shorter retroactive coverage window for adults in the expansion group, as Georgetown’s Center for Children and Families lays out. Every one of those changes reaches the billing team before it reaches anyone else.
If you’re a financial leader weighing a change, you likely have a few paths in front of you, whether that’s hiring a new RCM director to run a central billing office, moving to a business process outsourcing (BPO) partner, or building some hybrid of the two. There’s no single right structure, because every health center has its own patient mix, payer mix and history. Whichever direction you take, these four questions will tell you quickly whether the person or partner across the table understands the work.
FQHC billing isn’t harder, but it is different
From a billing perspective, health centers aren’t more difficult than other practices, but they run on a different set of rules. Visits are paid at an encounter rate under the prospective payment system, patients at or below 200% of the federal poverty level qualify for a sliding fee discount, and managed care payments often need a separate wrap payment to reach the full rate. Health centers also serve people that many for-profit practices don’t, and the mission behind that care should shape how the billing office talks with patients about money.
1. Where do you get your billers?
“We advertise and hire from the local hospital” is the wrong answer, and so is “billers are billers.” Good FQHC billers aren’t simply hired, they’re developed over time, and the experienced ones are hard to find because the health centers that trained them work hard to keep them.
The answer you want to hear sounds more like this: we hire people with a talent for detailed work and a habit of solving problems, and then we teach them FQHC billing. That training can’t be a one-time event, because the rules move every year. The G2025 change makes a good test. Ask a candidate or partner how their team prepared for it, and listen for specifics about the replacement codes, the 93 and 95 modifiers, and how they updated claim configuration in the practice management system. And don’t overlook fee-for-service knowledge, since billers who move into the FQHC world still need it for services that fall outside the encounter rate.
2. How is your patient services staff trained?
By patient services staff, we mean the people who talk with patients about their bills. Health centers provide medical, dental and behavioral health care to communities that are often uninsured or underinsured, and some centers were founded to serve one specific population within that group. So ask how staff are trained to stay mindful of a patient’s situation while still moving the payment conversation forward. Do they understand your sliding fee scale and know when to bring in financial services? Can they point a patient to help applying for coverage? Do they have the authority to set up payment plans that work for both the patient and the health center, and are they prepared for the languages your patients speak?
In 2027 this question carries more weight than it ever has. Once work requirements and six-month reviews begin, a patient can be covered when the appointment is booked and uncovered by the date of service. That makes the front desk the first line of revenue protection, which means verifying eligibility at every visit, knowing when each patient’s renewal is due, and being ready to walk someone through a noncompliance notice before their coverage lapses.
3. How do you make sure only qualifying encounters are billed to Medicare and Medicaid?
A claim getting paid doesn’t prove it should have been. Encounter-rate billing often hides the visit details behind a T1015, a revenue code or another all-inclusive code, so a visit that doesn’t qualify can slip through, get paid, and come back later in an audit. Ask what process confirms that each visit truly qualifies for the encounter rate, how the practice management system is set up to manage claim configuration, and what additional oversight protects the integrity of your billing. It’s also worth asking how staff get the time and resources to keep up with regulation changes, because a team that learns about a new rule from a denial is already behind.
4. How do you make sure wrap claims are billed and collected?
If the phrase “wrap claims” gets a long silence from a director candidate or a BPO, they may not be the right fit for a health center. Wrap payments exist for virtually all Medicare Advantage claims and for most state Medicaid managed care claims, and the list of states that are exceptions keeps getting shorter. Whether your state handles the wrap claim by claim, through quarterly reports, or quarterly with an annual reconciliation, it needs a defined process with clear owners and deadlines.
Timing matters more than it used to, too. When retroactive Medicaid coverage for expansion adults drops from 90 days to 30 in January, an eligibility problem that sits in a work queue for a month can turn a recoverable claim, along with its wrap payment, into a write-off. Ask how quickly eligibility denials get worked and how wrap receivables are tracked against what the state and plans actually owe.
Ask these questions, then ask for references
These four questions are a place to start, not a complete checklist. Ask for references from other health centers rather than hospitals or private practices, and ask those references how the partner handled the last major rule change. Whatever structure you choose should leave your billing stronger than it found it, since the revenue it brings in is what keeps your health center’s mission funded.
If you’d like to hear how Medcor would answer these four questions for your health center, a discovery meeting is the easiest place to start. Our team will walk through how your billing runs today and what the January changes are likely to ask of it.