Medicaid Legislation, Revenue Cycle, & Workforce Development with Karen A. Daley, CEO

Speaker A: For joining again on our next episode of the CHC podcast, the nation's, uh, podcast for community health centers. My name is Chase Maribold and I am joined by my co host, Dawson Nemo. And we have the lovely privilege of visiting with Ms. Karen Daly today. Um, Chase, you want to go into Karen's background or let Karen do that? Absolutely. Well, Karen, we are so, so happy for you to join us and talk through some great topics today, from Medicaid to we workforce and revenue cycle. But first, uh, let's take time to talk about your background and how you became the chief executive officer at Optimus and a little bit about your background in the FQHC world.

Speaker B: Great, thanks. Thanks, Chase. Uh, I'm happy to be here. Uh, uh, my journey to FQHC world is somewhat varied. Uh, I started out, um, as Optimus Healthcare's general outside general counsel. And then after about seven years I came in house and I was their chief operating officer and general counsel. And then as the CEO retired, I took his position as CEO. Uh, prior to coming to Optimus, um, I had a, other careers. I started my career in healthcare as a nurse in Boston, as an ICU nurse at Beth Israel Deaconess Medical center, and then from there I went back to, um, business school and law school and continued down the healthcare path. I started off in medical malpractice defense work, then I got into risk management, um, went back to, um, the law, working in a corporate healthcare practice. And that's how I became, um, the counsel for optimists. So that's the short version of how I got here.

Speaker A: Yeah. Um, that's incredible. So seeing it from working with patients, working with providers as a nurse, going back to school on the business and law side, and then getting to really understand the organization as their outside counsel before making your way to, into making an impact within Optimus.

Speaker B: Correct? Correct.

Speaker A: Wow. Well, you get to really learn an organization on all fronts, seeing the outside and inside.

Speaker B: Yes, I have. And it's, it's. What's nice about it is I, when I was a nurse, I always felt like I was doing something meaningful and giving back and you know, practicing law was fine, but when I became their general counsel, I felt like I had that same feeling that I was doing something bigger because I was helping an organization whose mission is so important, uh, to thousands of individuals, um, in receiving health, uh, care, quality health care, even at that.

Speaker A: Absolutely. And what you do every day in those executive leadership roles within FQHC is directly impacts the communities and the patients and the demographic you serve.

Speaker B: Uh, sure does.

Speaker A: And really brings home, um, the mission of what you're doing day in and day out. Well, let's jump into it. Um, so let's start with Medicaid. There is a lot going on on the federal level, on the state level. And Ms. Karen, I'm just going to open it up to you, kind of tell me what's. What's going on in your state and what do you see developing?

Speaker B: Yeah, uh, a lot. So first of all, um, in the state of Connecticut, um, the FQHCs had gotten together because they had not seen a rate increase in 23 years outside of the mei increases that we get annually. We had filed, um, some paperwork that started, uh, legal action, uh, against the Department of Social Services, um, for uh, change in scope rate increases. Uh, several weeks ago, however, we reached an agreement with the state of Connecticut, um, to have our rates increased, um, based on the 2023 cost reports. So that's great news. Um, we will receive the rate increase over the next three years. Um, while that is helpful, of course it gets us to 2023 rates. And of course, you know, by the time that the rate increase is fully, um, fully realized, it will then be 2028 and our cost of. Will have increased. So more to come on that. But, uh, happy that we at least are getting a reasonable rate increase. Unfortunately, at the same time, the federal government has, um, you know, passed the um, one big beautiful bill act. And it had provisions in it that have changes to Medicaid that don't directly impact the federally qualified health centers. Uh, more of the impact is going to be on the state. So we are waiting to see how the state is going to respond to that. Uh, first of all, um, directly, perhaps directly for the federally qualified health centers may be an increase in um, administrative burden as there are going to be redeterminations that have to be done. Um, now every six months and there will be work requirements. And whether we have to verify that or the state probably maybe a combination of the two, is still up in the air. And of course there are restrictions for eligibility for Medicaid, which is always, um, problematic for access for some of the most vulnerable patients that we serve. Well, the state. How the state responds to a decrease in the FMAP is, is. I'm. They're still working that out, so we don't know and if that will, you know, eventually trickle down to, to the FQHCs. So there's a little bit of a, um, a waiting period there. Of course, a lot of this doesn't really come into play until 2026. So we are looking forward and trying to be proactive as to what we can do.

Speaker A: Wow. Uh, it's been a busy few months on the state and on the federal legislator during Medicaid discussions.

Speaker B: It really has, and I think it's concerning. As I said, we're, um, thrilled that we are getting a rate increase, but there are things that are in play that may, um, weaken that increase in terms of, um, what the state has to do to, um, be able to take on more burden, um, of caring for, um, our Medicaid patients. And in addition to that, there were other executive orders that are really putting, um, how do I say this? It's really putting a dent in access to affordable and quality care in terms of, um, who is going to be able to benefit from the care that we provide.

Speaker A: Absolutely.

Speaker B: While the access is a problem when we don't treat those patients, it also reduces our revenue as well. So it's just an unfortunate, uh, hit in particular to the access for the individuals that need the care, but then also the revenue. And then when that happens, it's vicious circle. We then have to decrease our access because we may not have the revenue to continue certain programs or to keep certain sites open. Um, and it also impacts our workforce as well. Because what we're seeing in terms of workforce then is whether we can, um, continue to pay our clinicians and our staff at market rates, um, based on the revenue that we receive and the reimbursement from Medicaid, which is our largest payer. And when we can't do that, and because of the economy the way it is, things are getting more expensive. Um, people have to make choices. And sometimes those choices are to leave a job that has a great mission and where they feel great about it. But in order to provide for their family, they may make the decision to go to an employer, such as a hospital, that can perhaps pay them more for the same job.

Speaker A: Absolutely. And it's all interconnected with Medicaid funding to also our patients and going through that redetermination process, maybe, uh, patient that was eligible is no longer. And then also you see that revenue structure as you mentioned, if we have less patients coming in, if we have less revenues, then it may be more difficult on attracting talent. And you know, we talk about workforce a lot and workforce. We are in a crisis right now on getting great staff and teammates and providers and nurses coming to our health center. So Karen, what have, maybe you've seen in your market and what's worked and what's something that you're doing what or maybe other FQHCs in your state that's really trying to address that workforce challenge?

Speaker B: Yeah, that's. Workforce challenges are actually a significant challenge for us, um, in the state of Connecticut. And you know, cost of living is relatively high and um, we are located in Fairfield county, which is more the most expensive part of the state. And again I think that we pay at market currently. But there's other factors that come into play as whether we can give uh, bonuses and incentives, um, whether we can increase people's pay, um, on an annual basis. So um, we are having that crisis of primary care clinicians, in particular adult clinicians, and we are now relying a lot on uh, locum providers to fill in those gaps. And that's incredibly expensive. Uh, so it's, I'd like to say there was something innovative we're doing and we've really thought about that in terms of, you know, paying um, pretty great, um, incentives to a sign on bonus and the like. Um, but I think that what it is is that there just isn't a large enough um, population of primary care clinicians out there that are looking for work. Um, you know, most of them are probably lots of them go to the hospital because of course they can pay more. But I think the other issue is that medical schools and those coming out of medical schools and perhaps those that are coming out of advanced practice programs, um, are not going into primary care. They're uh, going into specialties that will pay them more and that makes the crisis that much worse. And of course we also saw after Covid that many people that were licensed to provide um, health care wanted to get out of the field altogether. So now it has become a crisis and it's very difficult for us to um, retain clinicians and importantly to recruit.

Speaker A: Absolutely. And hopefully with the positive win on Medicaid in your state, the revenue will increase over the next three years as that fully vest and, and uh, the staffing challenges and the pay will come back up. But as you mentioned Gary, it's just been a very difficult few years on workforce challenges, uh, and we've seen other FQs maybe explore those non traditional staffing models. Uh, but as you mentioned, it can be pretty expensive to bring in that outside staff.

Speaker B: It sure is. And I think the other thing, um, not to say that we're just relying on locums is we are really looking at how we can um, utilize our clinical support staff in a way that is helpful to clinicians and some of that is having our nurses work to the top of their license and helping out with follow up visits that they can see rather than the clinician because the clinician has already seen the patient, there's a plan in place and that is a visit that on follow up they can see. Um, we also are looking at, develop and have developed and putting them into place is care pathways that will also help with where the patient, how often the patient is going to be seen, are they going to be seen by the clinician versus the nurse? Um, hopefully that will not um, only support the clinician but improve the access that is being squeezed from um, the lack of primary care clinicians. So we're looking at everything we possibly can to improve the access but also improve um, the work of the clinician. Because working in a federally qualified health center, um, in primary care is difficult. We are dealing with a population that may not come regularly for care. The patients that can't come in may have um, Uh, you know, chronic conditions that may not be controlled. And so it makes those visits even that more, much more difficult. So we're trying to find ways to make it um, easier for the patient to improve the quality of care that they receive and at the same time improve the environment for the clinician so that they want to stay in primary care and they want to stay here at Optimus and work.

Speaker A: You know what I love about that is just getting creative. If there's anything Covid in the last few years has shown us is that our health centers are resilient and that we can get creative to again best serve the patient. Just like you mentioned, with using maybe some of your team, uh, maybe some of the clinical team to support in these different operations. Um, and you also mentioned too Karen, I think is really important is health centers in the state of Connecticut all came together to really support and drive the Medicaid funding, which I'm sure you guys are coming together to help address these other challenges and then leveraging each other's information and network to say what can we do better? Or what's really working in certain markets.

Speaker B: Yeah, for sure, uh, we have a very strong PCA and the CEOs of the uh, FQHCs in the state uh, meet weekly. And so I would say, you know, are we all um, perfectly aligned with, with how we do things? No, but I think that that's what makes it strong is that we all have certain opinions and we eventually are able to come to a decision that is good for the, you know, is for the collective good and that is what we saw when we were advocating for higher rates.

Speaker A: Absolutely. And having that strong PCA is so, so important. And I, uh, love to see that and hear that. And as we finish up today, I, uh, don't want to miss revenue cycle discussions. Um, I know when we discuss it's so important for a health center to keep their revenue cycle at the top of mind. And with your experience in that COO role and also as the outside counsel, you've seen that revenue cycle firsthand. Uh, can you touch a little bit about that?

Speaker B: Yeah, I think that the revenue cycle becomes even more important, especially when you have, um, two things I think that we're battling is, you know, flat 330 funding for, um, the last several years. And when your Medicaid rates are, you know, incredibly low, uh, you don't have a lot to work with. So what you do have to do is, is really strengthen the revenue cycle, and that is strengthening every operation from the front office to the time the bill goes out and everything in between. And so I think first it starts with customer service, that you have to have everybody in the organization have great customer service because you want your patients to come back. Um, I also think that you have to consider, um, you know, it's the staff experience and making sure that they're, um, satisfied with how the organization is running and how they're, how they are able to do their job. And then, you know, you look at the, um, the technical aspects of the revenue cycle. Ensuring that the front office at registration or before registration is insured, verifying insurance, we're collecting co pays and, you know, other outstanding balances up front, um, that our coding is not only accurate, um, and thorough, um, and appropriate, but getting away from. Well, we only get one rate for Medicaid, so we really don't have to, you know, thoroughly code, um, a visit. And the reason why we don't want to do that and have, you know, dispel that myth is that we have other, um, revenue sources from Medicare or from commercial insurance, where that kind of thorough coding is important for increasing the amount of, uh, revenue that you're able to bring in. Uh, I think taking advantage of, um, the Medicare wrap payments, we have done that, um, for our advantage programs. And so we were able to get our PPS rate looking at the fee schedules. I know a lot of FQHCs don't like to increase their fee schedules, but the truth is, is that the expenses go up and there becomes a point where, um, if you don't increase your fee Schedule, you're not bringing in the revenue that's going to be able to meet your expenses. Um, I think we personally, these are the things that Optimus has done and we're also looking at the um, annual wellness visits and really maximizing on that not only for the revenue but for um, the quality care that it provides um, to the Medicare population. We've looked at our grants and making sure that we have an efficient grant process and making sure that the grant monies that we have been, that we're to receive, that we're going to receive, you know, every penny of it because we have appropriately budgeted for what we were going to do in that program. We also have developed KPIs for different parts of the organization. Whether it's the operational changes we've made, um, KPIs, billing, KPIs and finance and making sure we, on a monthly basis where we are and where we need to improve. Um, similarly looking at our quality measures just to make sure, while we're looking at all of our revenue cycle, that we're not falling down on quality which is critical to our operations and having patients to come back in. And I think that Optimus is um, a fairly large FQHC with about 30 sites. And while we of course have a consolidated uh, financial reports, we've really um, looked at um, finances from a department site and a department perspective and a site perspective so that we can drill down to say if they're underperforming, if we're underperforming, where are we underperforming and what can we do to change that. So it shouldn't be a mystery if for example, you know, revenue is down, where is down? Uh, is it an encounter issue? Is it a uh, payer mix issue? So whatever it is, we are able to zero in on that and make the changes that we can. And I have to tell you, I have a fantastic staff, fantastic team that is able to um, do all this, all of these things on a daily basis and has really brought us from when I started, um, a pretty significant deficit to now being um, running at a surplus.

Speaker A: Wow. And Karen, that transparency and financials on a department and site level specific P L financials that you can see in view and then if you see some metrics that are not going in the way that we are having the expectation, then we can immediately jump in and say what's going on? How do we adjust this so we are successful for our team, for our patients, for our community we serve?

Speaker B: Absolutely. And I think what I'VE said to my team is that things have changed in the FQHC world. I think there used to be a lot of grant funding out in there that you could tap into. Um, of course reimbursement rates were better because at the time that they were probably covered your costs, um, things weren't as expensive. Times have changed and we now have to operate as if We're a Fortune 500 company with a really deep commitment to our mission. And that isn't to say we're going to cut off care. That's not what we've done. Uh, we got through um, the deficit without having uh, layoffs because that was really important that our staff continue to be employed. And we did turn it into a data driven organization where we are looking at everything and trying to drill down as to where issues might be cropping up and then doing things to change the trajectory of whatever it is that we're seeing that isn't going quite as we expected. And additionally, we are also well aware of the changes that are being made on the federal level with uh, you know, the different laws and the different executive orders and trying to um, proactively plan for what that might look like and how we can remain viable and how, and most importantly how we can treat um, certain of our patients that may be left out based on those changes that are coming from the federal administration.

Speaker A: Absolutely. And you know what I've loved about our conversation today is all three of the topics have come down to how do we best serve our patients? And I think today's conversation has been phenomenal. Going over those Medicaid updates, what we're doing to help address those, whether it's rates or whether it's redetermination processes, going over work first, getting creative with our staff again for the end point of better serving our patients and then revenue cycle. Understanding that revenue cycle is not just accounting and AP and accounts receivable. It is all aspects of the organization. It really is service to demographics, to billing, to making sure our patients have a phenomenal experience. They keep coming back and that at the very front office when they walk out the door, they are taken care of and that will all generate, uh, and all impact that revenue cycle for our health center, so.

Speaker B: Exactly, exactly. And it's a lot of work, but it's actually very, very satisfying. And we hope to um, remain viable for some time and to really fight against what we're seeing, uh, coming down the pike so that um, the most vulnerable patients are going to continue to receive the care that they have A right to. So more to come.

Speaker A: And Karen, as we finish up today, uh, for any of the other executive leaders from FQHC all across the country that tune into this, uh, any advice, any recommendations for them maybe on a PCA level or as they lead their health center? Any recommendations for them as they battle these challenges as well? Yeah.

Speaker B: What I've come to realize is that is, I think Critically important for FQHCs is education. I think it's really important for us to educate, whether it's CEOs of FQHCs or the PCAs, to educate the public, our, uh, legislators on FQHCs. People know they exist, but people don't know the depth of what we do, how we do it, how we're financed, and how difficult it is for us to continue to make this work. And similarly, I would say that we should do the same thing for Medicaid and with educating the public on, um, um, FQHCs. And Medicaid is also include why it is so important for everybody to want federally qualified health centers to exist, to want Medicaid to treat as many people living below the poverty line as possible. Because if we don't, that is an impact on everybody, not just on the patients we treat. Because, uh, the, uh, federally qualified health centers and the access to quality health care is going to protect community health, the public health. It's going to, um, provide access, um, and affordable quality health care to all. And it's going to lower the cost of health care for all. Because if patients cannot tap into federally qualified health centers or have Medicaid to be able to afford that care, they're not going to go to the doctor. And when they do, it's going to be desperate and they're going to go to an emergency room. The care is much more expensive and the care that they're going to require is more expensive because their chronic condition is likely now beyond where it should be, had it been treated early on. And of course, I think if we have better health care, um, for all that contributes to the economy as a whole, because people are going to be able to work, you're going to have a workforce that you can tap into. So there's so many reasons why I, uh, think the education is important for everybody and the understanding of why it's important for everybody, not just those who benefit from it. And I would say that we have to take that information and we have to advocate, write letters to the editors, um, talk to your legislators, state, on the state and federal level as to how important. This is, um, write letters to them, uh, testify in front of your state, uh, legislature. And I think it's for workforce. I think we really need medical schools to start providing tracks in primary care in medical schools and residencies. And most importantly is we have to change how we compensate primary care clinicians. They should be compensated highly for the work they do, because that's important for health. And unfortunately, we look at specialties like people who have gone beyond primary care and now they need specialty care. So we're highly compensating, um, clinicians in that area, but we're really not focused on primary care, and that's where we should be focused. That would be my advice in those three areas.

Speaker A: Karen, thank you so much. And it's so important. I believe any health center leader that's joining today is really going to get a lot out of this conversation. So, Karen, we just can't tell you how much we appreciate your time. And thank you for joining us today.

Speaker B: Thank you for having me. It's been a pleasure. Um, if, uh, you are welcome to give my information to anybody if they want to have a further conversation, um, I would welcome that. So thank you. Thank you for the opportunity and allowing me to speak about these issues that are so important to me and to the communities we serve.

Speaker A: Absolutely. And if you are listening, we will go ahead and put Karen's information into our podcast description. Uh, feel free to reach out to Karen on any of these topics we discussed today. Thank you so much for joining in on this episode of Community Health Center Podcast. We really appreciate your time, and as always, thank you so much for joining. And this is Chase and Dawson tuning out.