Sitting in the FMP business meeting and following the money

You are in the room. Now follow the numbers.

Somewhere in the second half of the practice business meeting, a slide appears with charges, collections, A/R, and a pie chart of payers. Faculty nod. Residents check their inbox. That slide is how the clinic you train in pays its staff, keeps its lights on, and decides whether it can add a nurse or a same-day slot. You do not need an MBA to read it. You need six definitions and the arithmetic behind them. This module prepares you for the meeting. It does not replace attending it. The meeting is where your practice's real numbers, policies, and goals are discussed, and those are the ones that matter. Everything below uses fictional numbers to teach the vocabulary.

From charges to cash: the revenue cycle in one month

A fictional faculty-resident team's revenue cycle figures. Charges for the month: $100,000. Allowed under payer contracts: $62,000. Payments received: $58,900. Outstanding A/R at month end: $120,000. Charges over the last 90 days: $300,000. Claims submitted: 1,200; denied on first pass: 84.

Bottom line: The 58.9% gross rate looks alarming and means almost nothing; the 95.0% net rate is the one that says whether the practice is collecting what it earned. The $3,100 gap between allowed and collected ($62,000 − $58,900) is unpaid patient balances, denials not yet reworked, and bad debt. Denials are the line a resident can move, because many trace back to documentation, coding, or missing prior authorizations.

Payer mix: share of visits is not share of revenue

Payer mix is the share of visits, or of charges, by type of coverage. It matters because the same 99214 is paid at different allowed amounts by Medicare, by your state's Medicaid program, and by each commercial contract. A practice can see more patients and collect less if the mix shifts toward lower-paying coverage. The fictional practice below shows the pattern; the percentages are invented and are not benchmarks. When the slide shows a payer pie chart, ask whether it is by visits or by collections. The two charts tell different stories.

Cost per visit and overhead

A fictional teaching practice in one month: operating costs excluding physician and resident compensation $310,000; completed visits 2,480; collections $520,000.

Bottom line: Each completed visit leaves $84.68 toward physician pay, teaching time, and everything else. A no-show still incurs most of the $125.00 in staff and space. That is why no-show rates and template design come up in business meetings: an empty slot costs money that a filled one would have covered.

Practice expense vs. physician compensation

Medicare pays a fee-schedule service as [(work RVU × work GPCI) + (PE RVU × PE GPCI) + (malpractice RVU × MP GPCI)] × conversion factor. For 2026 the conversion factor is $33.4009 (non-qualifying APM participants) or $33.5675 (qualifying APM participants). That payment goes to the billing practice, not to the physician.

The practice expense (PE) component exists to pay for the clinic: staff, space, equipment, and supplies. The work component measures physician effort. A contract that pays a physician dollars per wRVU pays on the work component alone, out of whatever the practice collects across all components and all payers. The conversion factor multiplies total RVUs and the contract rate multiplies work RVUs only, so the two are different units. Do not divide one by the other. Two settings work differently. A federally qualified health center is paid by Medicare per encounter under the FQHC prospective payment system: Medicare pays the lesser of the center's charges or the PPS rate for all FQHC services furnished to a patient on the same day with a medically necessary face-to-face visit. The 2026 base rate is $207.72, adjusted by a geographic adjustment factor; Medicaid pays FQHCs under its own state-administered methodology. In a teaching practice, the resident's salary and benefits are generally funded through graduate medical education dollars that flow to the sponsoring institution, and may not appear on the practice's operating statement at all.

Why it matters: When someone says the practice is losing money, the next question is which revenue and which costs are on the statement. A clinic that carries resident salaries, precepting time, or uncompensated care on its books looks very different from one that does not, and both can be well run.

Questions a resident can usefully ask

You are not expected to run the practice. You are expected to understand it well enough to contribute. These questions are specific, answerable, and connected to things residents can influence.

• Ask for the top three denial reasons last quarter and which ones trace to documentation, coding, or prior authorization. — Next business meeting
• Ask whether the net collection rate and days in A/R are trending up or down, and which basis (charges or allowed) the A/R figure uses. — Next business meeting
• Ask whether the payer mix slide is by visits or by collections, and whether the mix has shifted this year. — When payer mix is presented
• Ask what is included in cost per visit, and whether resident salaries and precepting time sit on the practice's statement. — Once per year
• If you train in an FQHC, ask how the per-encounter payment shapes same-day scheduling and which visits generate a separate encounter. — During your FQHC rotation or first business meeting there
• Ask which quality or efficiency goal the practice is working on this quarter and what residents can do toward it. — Each quarter

Which dollars are the write-off

A fictional practice charges $250 for a 99214. The patient's commercial plan allows $130 for the visit. The plan pays $100 and the patient owes a $30 copay, which the patient never pays.

Following the money

• Net collection rate = payments ÷ (charges − contractual adjustments); gross collection rate mostly reflects list prices.
• Days in A/R = A/R balance ÷ average daily charges; confirm whether your practice uses charges or allowed amounts.
• Payer mix by visits and by collections can look very different; the same visit pays differently by payer.
• Medicare's conversion factor ($33.4009 in 2026) multiplies total RVUs and is paid to the practice; a contract's $/wRVU pays on work RVUs only, so they are different units.
• FQHCs are paid by Medicare per encounter: the lesser of charges or the PPS rate, with a 2026 base rate of $207.72 adjusted by geography.

Do this next: Before your next business meeting, pick one question from the checklist and bring it. Write down the answer and the definition the practice uses.