FAQ: How 519 rates help FQHCs increase reimbursement

Despite being in place for over a decade, the 519 revenue code is not well known among federally qualified health centers (FQHCs). And in this case, what you don’t know could cost you — potentially millions of dollars.

The 519 revenue code allows FQHCs that accept Medicare Advantage plans to recover the difference between Medicare Advantage payments and the Medicare Prospective Payment System (PPS) rate.

If your health center accepts Medicare Advantage plans, you could be getting reimbursed less than you’re entitled to. Here’s what you need to know to claim your full and fair share:

1. What is the 519 revenue code?

The 519 revenue code allows FQHCs to bill Medicare as a secondary payer for the difference between their contracted Medicare Advantage payment and the Medicare PPS rate. It acts as a financial safety net, making it more viable for FQHCs and physician groups to accept Medicare Advantage plans without taking a financial hit.

2. Does every Medicare provider have a 519 revenue code?

Not automatically. All FQHCs qualify for a 519 billing rate, but they must apply. Without a 519 rate, health centers are likely under-collecting for Medicare Advantage visits and missing out on revenue they are entitled to.

3. How does a health center get a 519 rate?

To start the application process, health centers need several documents, including:

• The fully executed contract with the health center’s Medicare Administrative Contractor (MAC).
• Any amendments or changes to the contract, also countersigned.
• CPT-level visit reports with charges and payments.
• Capitation details, if applicable.

The health center should analyze this data to calculate the gap between average Medicare Advantage reimbursements by payer and the Medicare PPS rate. Using this information, health centers propose a custom 519 rate for each H code in each contracted Medicare Advantage plan.

There’s no blanket approval or 519 rate. In the application, health centers must justify each proposed rate based on actual data. Once complete, the application is submitted to the MAC for review.  

4. How long does the 519 rate application process take?

Depending on internal resources and complexity, preparing the analysis and documentation can take several weeks or months. After submission, MACs can take anywhere from one to eight months to respond. Health centers can shorten the timeline by submitting a complete, accurate and well-supported application.

5. Where do health centers get stuck in the application process?

There are many reasons FQHCs don’t pursue 519 rates. Some health centers lack the internal bandwidth to analyze claims and calculate a fair rate. Others underestimate the value of pursuing a 519 rate if Medicare Advantage is a small slice of their patient mix. And it can be a struggle to pull together all the application data, such as visit reports and executed Medicare Advantage contracts. To pursue a 519 rate, health centers also need an advanced understanding of contract reimbursement terms, Medicare payment structures and data analysis.

But these obstacles are worth overcoming because even modest rate adjustments add up. The increase applies in perpetuity, and for health centers with a high Medicare Advantage population, the revenue impact can be substantial.  

6. How does billing change once a 519 rate is approved?

Once approved, the health center simply bills the MAC as a secondary payer. In many cases, the 519 claims are issued automatically as a “shadow” of the primary claim submitted to the Medicare Advantage plan.

7. Can health centers submit a 519 code retroactively?

Yes, depending on the terms of the MAC contract. Some allow retroactive billing back to the effective date of the Medicare Advantage contract, while others impose time limits. Check the retroactivity rules for your MAC when calculating ROI.

8. Do you have to reapply for 519 codes?

Not usually. Once a 519 rate is approved, it stays in place. It will automatically increase to match annual increases through the Medicare Economic Index. However, if the health center enters a new payer contract or opens a new location, new applications may be required.

9. How are 519 codes audited and reconciled?

In most cases, they aren’t. There isn’t a reconciliation process for patients that only carry Medicare Advantage, so there’s no risk of having to pay money back.

Some Medicare Advantage patients also have Medicaid; you might hear them referred to as “medi-medis” or “dual-eligibles.” Depending on your state, encounters for these patients may be valued at your FQHC’s Medicaid PPS rate, which is usually greater than the Medicare PPS rate. In this situation, special considerations apply, and 519 payments for dual-eligible patients may be counted in your Medicaid reconciliation process. This situation creates additional revenue for FQHCs — but adds compliance and accounting requirements. If you have a large number of dual-eligible patients, it’s crucial to understand how 519 rates affect Medicaid reconciliation before proceeding.

10. Are there any risks with using 519 rates?

The biggest risk is not using them and leaving money on the table for services you’re already providing.

There is an upfront investment in staff time (or consulting fees) to prepare the application, but that’s typically a one-time investment with long-term ROI. Health centers with multiple sites could reasonably see six- or seven-figure receivables added to their bottom lines — without increasing the clinical workload.

11. What are the first steps to pursuing a 519 rate?

Start by assembling a team to manage the analysis and application. Typically, that includes staff from finance, revenue cycle and IT. For example, a data analyst will need to pull claims data, and the revenue cycle director will need to implement the new billing workflow.

Then, do some rough math to determine how much revenue is being left on the table that a 519 rate could conservatively backfill.

Finally, get in touch with your MAC. Tell them you’re interested in seeking a 519 rate and ask for their specific instructions.

Many health centers use consultants to support the analysis, rate development and application process, even acting as a liaison between the health center and the MAC.

How Wipfli can help

As of 2024, nearly 33 million people were enrolled in Medicare Advantage — more than half of the eligible Medicare population. Medicare Advantage enrollment has more than doubled since 2010 and is expected to grow.

We can help your health center receive fair reimbursement as this patient population grows. We review Medicare Advantage contracts and payments data, calculate optimal 519 rates and prepare compliant application packets. Our experience in healthcare, finance and revenue strategy adds up — and delivers more value to your health center and community. Explore our healthcare solutions to learn more.