FQHC Cost Report Wrap-Up and Reconciliation: How to Protect Your PPS Rate

The year-end cost report is the document that sets your All-Inclusive Rate for years — here is how to file it without leaving money behind.

By Anthony Pinto · Founder, Triad Health Engine · Published 2026-07-14 · 11-min read

The short answer — Every FQHC files an annual cost report with its MAC by the fifth month after fiscal year-end. That document is not just an accounting exercise — it is the primary mechanism CMS uses to reset your All-Inclusive Rate (AIR), calculate prospective payment system (PPS) wrap payments from Medicaid managed care plans, and evaluate whether your Section 330 grant is generating measurable cost efficiency. Most FQHCs leave money on the table in three specific ways: they under-report allowable costs in behavioral health and dental cost centers, they fail to reconcile UDS visit counts against the cost report visit denominator before filing, and they miss the change-in-scope adjustment window that would increase their per-visit rate mid-year. This post walks through the cost report structure under CMS Form CMS-224-14, the five reconciliation checkpoints that prevent MAC audit adjustments, the Medicaid wrap calculation logic, and the revenue math that shows why a $12 AIR error compounds into $180K or more over a typical patient panel.