Renee Genet Sep 1, 2022 5:00:34 PM 7 min read

What to Know About FQHC Billing

Federally Qualified Health Centers, or FQHCs, serve medically underserved areas and provide primary care services regardless of the patient’s ability to pay. These centers offer many benefits to their patients, including community resources, supportive services and help with food and housing insecurities, with some FQHCs even offering food pantries. Trained staff, such as social workers, are on site at FQHCs to help patients obtain Medicaid or sign up for services they may not be aware of. Patients with no insurance can be placed on a sliding fee scale based on their income and the current poverty guidelines.


From the provider perspective, FQHCs provide many benefits over other models. Specifically, FQHC providers receive enhanced payments from both Medicare and Medicaid. They are also eligible to receive prescription and non-prescription medications through the 340B-Federal Drug Pricing Program, as well as the Vaccines for Children Program. 


FQHC Medicare Payments

The enhanced payments for Medicare are specific to FQHCs. The rate is based on the expenses of the center and the geographical area that they serve. A cost report is required yearly. Professional services are submitted on a UB04 to Medicare Part A, which means the patient must be eligible for both Medicare Part A & B.


FQHC Medicaid Payments

Medicaid payments for an FQHC are known as the prospective payment reimbursement rate or, more commonly, wraparound payments. A new rate is calculated every year and becomes effective on October 1st. For example, a medical, dental, behavioral or optometry provider will receive a specific rate amount, even if the patient is seen by multiple providers on the same day.


To receive this rate, providers are required to bill the Medicaid MCO (Managed Care Organization) or the patient’s commercial plan on a HCFA 1500 to receive their fee for service reimbursement. Once this reimbursement is received, the provider “wraps” it around to Medicaid of Ohio to receive the rest of their rate. When billing for their wraparound payments, providers are required to submit procedure code T1015 and to identify which service they provided by adding the appropriate modifier. 


Encounter code T1015 and modifiers are listed below:

U1 – Medical

U2 – Dental

U3 – Mental Health 

U4 – PT or OT Services 

U5 – Speech Pathology

U6 - Podiatry

U7 - Vision

U8 - Chiropractic 

U9 – Transportation


FQHC billing can be challenging, but when done correctly, it can be very beneficial to both the center and the patients they serve. If you have specific questions regarding FQHCs or general billing, MMG is here to help. Please reach out to start a conversation.