Practice Start-up Checklist



Federally Qualified Health Center

Start-up Checklist

Starting a Federally Qualified Health Center (FQHC) is a complicated undertaking. The following checklist has been compiled to help organize and demystify the task for groups and individuals who are embarking on this grand adventure for the first time. The checklist is not comprehensive and is meant to be used as a general guide only – it does, however, contain a number of useful links to additional information that will save you research and time, and at the very least it should help you identify areas you may have overlooked in your own health center planning process. As you use and improve upon this tool that has been freely provided to you, please honor the request in the footnote below so others can benefit from what you have learned.

The checklist is divided into sections corresponding with different health center operational areas. A number of the tasks should be addressed concurrently – An attempt has been made to group the most time sensitive and important tasks at the top of each section. Many of the steps can be undertaken before notification of funding has been received (in case no one has told you, the announcement about which new health center sites are funded is first posted on the HRSA web site in the “Newsroom” section at ).

Official FQHC Status/Billing:

❑ Apply for Medicare. If your proposal is selected for funding, you will receive a document called a “Notice of Grant Award” from HRSA listing the name and address of the site, as well as a variety of details about the grant and your organization. As soon as the NGA is received, you should already be prepared to submit a completed standard Medicare 855A application and the documents specified below to United Government Services (UGS). Submitting this promptly requires that you obtain the application in advance and fill out as much as possible before the Notice of Grant award is received, as well as compiling the other necessary supporting documents in advance. You can retrieve the standard Medicare 855A application form and directions for completing it from the Centers for Medicare and Medicaid Services (CMS) website at

United Government Services (UGS) is designated as the Medicare Fiscal Intermediary for FQHCs. You must submit the following documents to them for FQHC certification – if you don’t already have some of the documents, you should immediately start the process of obtaining them:

• Form 855A completed in its entirety (above).

• Copy of IRS 501(c) (3) letter designating your non-profit status (more info about obtaining this is available at the IRS web site).

• IRS document confirming the Tax Identification Number and Legal Business Name Copy of your organization’s Articles of Incorporation (and a letter from the state showing the Articles were filed with by the state).

• Copy of Board of Directors By-laws.

• Identification (SS#, dates of birth) of all members of the Board of Directors. You will need to complete a Section 6 of the 855A “Ownership Interest and/or Managing Control Information” for each board member and for each managing employee.

• Copies of any current Federal and State professional licenses, certifications (Medical Director, etc.) as well as all current business licenses.

• Copy of current CLIA certificate (see laboratory section below).

• Copies of State Pharmacy licenses, if a pharmacy will be operated in the health center.

• Copy of IRS W-2 for delegated official. ()

• Copy of Notice of Grant award.

• Signed EDI agreements from United Government Services (the agreement form is available at: ).

This all should be mailed to:

United Government Services

401 W. Michigan Street

Milwaukee, WI 53202-2804

(414) 226-6962

Once they have officially recognized you as an FQHC (this will take a minimum of 30 days from all of the above being submitted, probably longer), you will be eligible for enhanced reimbursement for visits to your health center by Medicare patients. “Claims” for each visit to the center by a Medicare patient are then reported on a UB-92 form (these must be submitted electronically – see the Computer/Management Information System section below for more details). Initially you will be assigned an “interim rate” for reimbursement for these visits based on an estimate of what your costs will be for providing care to Medicare patients – at the end of your first year, you will file a “Medicare Cost Report” which will report your true costs, and the amount already paid to you for the Medicare visits during the first year will be adjusted either up or down depending if your actual costs were higher or lower than the interim rate that was set (note – you want to monitor this during the first year because you will either owe, or will be receiving, a potentially large chunk of money based on this adjustment which has obvious implications for cash flow). Once your first cost report is submitted and accepted, that rate will be used in the upcoming year to reimburse you for your Medicare visits until your next cost report is filed.

❑ Enroll in Medicaid. You must enroll with your state Medicaid office in order to be eligible for reimbursement for visits by Medicaid patients to your facility. As an FQHC, you will be eligible for special enhanced reimbursement from Medicaid. You should contact the state Medicaid office right away in order to obtain the enrollment forms and to fill out as much as possible in advance.

If your state has Medicaid Managed Care, you will be reimbursed through different mechanisms for those patients who are enrolled in a managed care program. For Medicaid patients that are NOT part of a managed care plan, you will be reimbursed by the State Medicaid office at a set rate per visit for each patient visit that is reported to them on a HCFA 1500 form (these can be submitted either electronically or on paper – see the Computer/Management Information System section below for more detail). Like Medicare, Medicaid will set an interim rate for you in your first year based on what they estimate will be your costs for providing services to Medicaid patients. At the end of your first year, you will file a “Medicaid Cost Report” which will report your true costs, and the amount already paid to you for Medicaid visits during the first year will be adjusted either up or down depending if your costs were higher or lower than the interim rate that was set (again, monitor this so you don’t have large surprises). Unlike Medicare, however, once the rate is firmly established you will not have to continue to submit cost reports every year – the rate will be adjusted slightly each year for inflation but will not fluctuate based on changes in your yearly costs.

• If your state has Medicaid Managed Care, you must enroll with the Medicaid Managed Care providers who are active in your community. Each will have a different set of enrollment forms – you should obtain them and start filling them out right away. You will then submit claims directly to Medicaid for enrolled Medicaid managed care patients. They will reimburse you for those visits at a set rate (which is lower than the rate for the straight Medicaid patients above), and then you will receive the difference between that rate and the rate established by the State Medicaid office above as part of a quarterly “adjustment” payment from the State Medicaid office. This is sometimes referred to as a “wrap-around” payment, and only applies to patients enrolled in Medicaid managed care. A comprehensive explanation of this can be obtained in the National Association of Community Health Centers (NACHC) publication “Understanding the Medicaid Prospective Payment System for Federally Qualified Health Centers (FQHCs)--Issue Brief #69 “ available at their web site:

❑ File with CMS. The following documents must be filed with the Centers for Medicare and Medicaid Services (Department of Health & Human Services).

• Exhibit 177 “Attestation Statement for Federally Qualified Health Centers.”

• Exhibit 178 “Federally Qualified Health Center Crucial Data Extract” (Exhibit 177 and Exhibit 178 can be found on page 5 and page 6 of:

• Entity’s State Business License.

• CLIA certificate (see laboratory section below).

• HSRA’s approval form/Notice of Grant Award.

• Letter from Tax Board approving “not for profit” status.

❑ Enroll as a participating provider with commercial and managed care insurances active in your area. Each will have different enrollment applications. You should make a list of the largest insurance providers in your community very early on in the process, and begin requesting enrollment applications from them. Fill out as much as possible right away.

❑ Contact the State Compensation Insurance Commission for worker’s comp fee schedule and forms.

❑ Request fee schedules from payers. Get Medicare, Medicaid and Worker’s Comp fee schedules from public record. Develop a charge schedule (a listing of your fees for all office visits, procedures, and services).

❑ Create a practice super bill/encounter form listing procedures and fees that the providers will use to document the patient visit and then given to the front desk by the patient at check-out.

❑ Develop Accounts Receivable systems and policies. This should be part of a larger Financial Policies and Procedures Manual, and should include a “Sliding Fee Scale Discount Policy” on how the program will operate at your center. The National Association of Community Health Centers (NACHC) offers an Accounting Policy, Procedures, and Operations Manual - 9/2002 available for purchase at: .

❑ Order CPT, HCPCS, ICD-9 and other coding manuals if you are doing your own billing.

❑ Contract with a collections agency if collections and billing policies warrant.

❑ Contract with third-party clearinghouse, if needed (this may be done through your MIS systems vendor – see below).

Computer/Management Information System/Communications:

❑ Select a practice management system (billing, scheduling, registration, etc.) that is specifically tailored for FQHC use. This will be crucial to the billing process outlined above – your software vendor must have the capacity to submit claims electronically through a clearinghouse to Medicare/Medicaid as well as private insurers and because of the unique nature of FQHC billing, the system needs to be FQHC compliant or it will cause you many headaches later. Also, each year you will be required to submit a Uniform Data System (UDS) report to the BPHC – it will be extremely difficult and time-consuming to extract the data needed for this yearly report from a practice management system that was not designed for health center use.

This will probably be the most important decision you make – you can obtain more background information in the September/October 2002 edition of Community Health Forum Magazine which is entitled “Information Management in Community Health” available at . Useful information can also be obtained from the NACHC Information Bulletin #1 “Critical Issues in Negotiating the Purchase of Information Systems Technology” (this is geared toward health center networks, but is still useful). Also, talk with existing health centers in your state to find out what practice management system they are using and ask about its strengths and weaknesses. Your state Primary Care Association web site will list contact information for all the existing FQHCs in your state:

❑ Purchase/lease a phone and on-hold messaging system. Order phone lines.

❑ Purchase cell phone and beeper for on-call provider staff members as warranted.

❑ Contract with an answering service for after hours call management.

❑ Purchase or lease server, PCs, and printers.

❑ Purchase or lease faxes and copy machines.

❑ Set up Internet service.

❑ Decide if you will be using an electronic medical record system and select a vendor.

Facility:

❑ Negotiate lease.

❑ Order signage.

❑ Establish power/water service and other utilities, if not leased.

❑ Order medical equipment (exam tables, lights, BP cuffs, thermometers, etc.).

❑ Order office furniture.

❑ Contract for medical waste pickup and garbage removal.

❑ Contract for cleaning services if not done by staff.

Supplies:

❑ Create and print business cards and stationary.

❑ Order medical supplies.

❑ Order office supplies.

❑ Order supplies for ancillary services (lab supplies, etc.).

❑ Order lab coats, staff uniforms, name tags.

❑ Order medical record filing system and charts (unless using an EMR).

Laboratory:

❑ Obtain a CLIA certificate for your lab. For information on how to apply and to obtain the form, go to .

❑ Contract with lab company or hospital if analysis not done in house.

❑ Order lab equipment (drawing chair, microscope, refrigerator, centrifuge, emergency eye wash station, hematastat, glucometer, clinitek, etc.).

❑ Develop lab policies and procedures, including material safety data sheets.

Financial/Grants Management:

❑ Incorporate organization and obtain 501(c)(3) non-profit status from IRS:

❑ Obtain federal tax ID number.

❑ Obtain employer ID number.

❑ Obtain the “Interactive Guide to Federal Grants Administration” (a CD Rom).from NACHC (, 304-347-0400) Do not panic when you see the size of the grants administration manual – it contains a searchable database and is a good reference tool.

❑ Develop Accounts Payable policies and procedures which should be part of a larger Financial Policies and Procedures manual.

❑ Open business checking account and CD/money market account for reserves.

❑ Arrange for a credit card and line of credit if needed.

❑ Purchase accounting software if not contained in practice management system.

❑ Find an accountant – one with non-profit experience is especially helpful.

❑ Establish a chart of accounts and a purchase order system for tracking accounts. payable.

Medical Staff:

❑ Register your facility with the National Provider Databank and obtain a login name and password. You are required to query the Databank about any potential provider (Physician, Nurse Practitioner, Physician Assistant) BEFORE you hire them. Registration information is available at:

❑ It is important to properly credential and privilege your medical staff members. Detailed information about this process, if you are not familiar with it, can be found in the NACHC publication: Credentialing & Privileging in Community, Migrant, Homeless, & Public Housing Health Centers - 8/1999 available for purchase at:

❑ Develop an employment contract for provider staff members. Specify compensation, on-call responsibilities, part-time work, retirement, assignment, leave, in-patient care, etc.

❑ Help prospective provider staff member obtain a state medical license if he/she is not already licensed in your state. It is crucial to get this process going ASAP because it can be very time consuming, and most of the other steps cannot be implemented until a license number is available. Contact your state medical board immediately and request some blank application forms – don’t leave this up to the individual.

❑ Help the provider staff member obtain a DEA number if he/she doesn’t already have one, or assist them in submitting a DEA change of address form if they already have one at a different facility. The forms can be obtained at:

❑ Help the provider staff member obtain a state narcotic license, if required in your state.

❑ In addition to the copies contained in their personnel file, set up a separate file with copies of the above documents for each medical staff member. They will be needed every time you submit credentialing applications to insurance companies or hospitals.

❑ Arrange for hospital privileges.

❑ Develop an on-call schedule.

Human Resources/Other Staff:

❑ Develop an Employee Handbook with Personnel Policies & Procedures. To ensure you are in compliance with state and federal labor regulations, it will be important to ensure your handbook addresses EOE, ADA, FMLA, Workplace Violence, Sexual Harassment, COBRA, and OSHA issues. It is strongly recommended that you have an attorney familiar with labor laws in your state review the handbook, along with a HR professional.

❑ You must post a number of federal notices for employees including: Equal Opportunity Commission/Age Discrimination Act; Job Safety and Health Protection Act; the Federal Minimum Wage Notice; the Family and Medical Leave Act; and the Employee Polygraph Protection Notice. You can meet this requirement by purchasing a federal “Five in One Labor Law Poster” and posting it in an employee area (they can be purchased at ) or the required posters can be downloaded for free from Department of Labor “elaws Poster Advisor” site at: or at Other notices may be required by your state – check with your state Department of Labor.

❑ Post an OSHA Job Safety and Health Protection Poster – you can download it for free from: You must also download and keep OSHA records using OSHA Form 300 (Log of Work Related Injuries and Illnesses), OSHA Form 301 (Injury and Illness Incident Report), and OSHA Form 300 A (Summary of Work Related Injuries and Illnesses – Annual). (Excel format) or (pdf).

❑ Decide upon and obtain employee benefits (health, life, leave, etc.). Arrange liability insurance, disability insurance, worker’s comp insurance, retirement plans, and health insurance.

❑ Arrange for payroll services, if not done in-house.

❑ Develop staff orientation and training plan, including OSHA requirements for blood borne pathogen training.

❑ Set up personnel files.

❑ Hire support staff (practice manager; front desk/scheduling/check-in/check-out, case manager, referral, and transcription if no EMR and done in house; and medical assistants who will provide clinical and ancillary support). It is beneficial to have at least one person who is a Certified Professional Coder (CPC). This is a credential given by the American Academy of Professional Coders – more information is available at .

Operations/Practice Management:

❑ Decide which patient scheduling method to use and program the practice management system.

❑ Create/get forms including:

▪ Patient Registration/Demographic.

▪ Health History.

▪ HIPAA Notice of Privacy Practices.

▪ HIPAA Business Associate Agreement.

▪ Medical Records Release.

▪ Consent to Treat (as required by state law).

▪ Assignment of benefits.

▪ Advance Beneficiary notice (for Medicare).

▪ Sliding Fee Scale Discount Application.

❑ Set up answering/paging service, if needed.

❑ Arrange for translation and hearing impaired support services. The Language Line, 1-800-774-4344 can be used in communities with a large number of languages or relatively small numbers of foreign speakers (making in house translators unfeasible).

❑ Arrange for transcription, if not done in-house.

❑ Arrange for backup call coverage, if needed.

Marketing/Advertising:

❑ Arrange for White Pages/Yellow Pages listings.

❑ Develop logo/letter head.

❑ Create marketing plan for first two years.

❑ Send press release to local media about new health center.

❑ Run newspaper ad.

❑ Develop direct mail piece/newsletter.

❑ Develop brochure.

Board of Directors:

❑ Obtain Directors and Officers (D&O) Liability Insurance (more info at: - dnoinsurance).

❑ Develop a Board Manual. The BPHC “Governing Board Handbook” () should be included along with copies of your articles of incorporation, by-laws, board contact and term list, the BPHC Health Center Program Expectations (PIN 98-23 ), etc.

❑ Develop board meeting and committee schedule.

❑ Develop board orientation and development package and plan.

Other:

❑ Develop a disaster response plan. It may seem like a crazy time to be worrying about something like this, but it is much easier to compile all the necessary information as you are building the practice, rather than trying to go back later. Unfortunately, you also never know when it will be needed. You should develop a clear plan of action including identifying staff responsibilities in case of fire, weather emergency, lightening strike damaging communications equipment (phone system, computer network), violent incident with a patient/staff member, etc. The plans should include detailed information like patient/staff evacuations procedures, chain of command and phone tree for notifying staff and family members, phone numbers/contact information for emergency repairs (phone, computer, electric), insurance company contact and policy information, backup systems to minimize business disruption and ability to care for patients, plan for managing media coverage, and the like. While nobody likes to think about these eventualities, many people in the community will be depending upon the Center for their health care and you need to be prepared to get the health center back up and running as quickly as possible if/when an emergency situation arises – figuring out how to do that after the event has happened is not optimal.

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