“I don’t know where we go from here”: Community health centers caught in limbo

weighing babyCommunity Health Connection, a Tulsa-based community health center, uses a sliding scale to determine patient payments. The minimum is $25 per appointment.

Jim McCarthy, Community Health Connection’s CEO, estimates that more than two in every three patients seen by his clinic qualify for the $25 minimum. However, even that small amount can be a hardship; some aren’t able to pay $25 in full. Community Health Connection allows such patients to pay in installments when they can.

“If somebody’s here,” McCarthy says, “we need to treat them.”

To qualify as a community health center (CHC), a health care provider must reach underserved communities or populations, and must provide services regardless of ability to pay. Nineteen CHCs with over 60 locations throughout Oklahoma served nearly 150,000 patients in 2012.

The level of bad debt on those $25 IOUs is, in McCarthy’s words, “virtually nil.” Lou Carmichael, CEO of Variety Care, a CHC with 11 locations throughout the state, concurs. Variety Care’s bad debt on patient care runs less than 3 percent. Patients need the care, and they almost always manage to pay.  

However, CHCs are now reckoning with payments from a different revenue source. The fund that the state uses to reimburse uncompensated care at community health centers ran dry in December – seven months earlier than anticipated. Now they are scrambling to stay afloat.

CSC-patientsCHCs pull from a wide variety of funding streams to cover the cost of providing care — private insurance, Medicare and Medicaid, grants, and even patients handing over envelopes of loose change. The state’s uncompensated care fund is the last resort for CHCs seeking reimbursements. It’s relatively small, about $3 million per year.

The funds appropriated for CHCs by the state have tripled since 2007, while the number of patients seen has increased by some 50 percent. However, the numbers don’t tell the whole story. When a new health center opens, the first six months to full year of operations typically see the highest concentration of patients who are unable to pay. Similarly, new patients tend to be very expensive to treat. A patient who hasn’t seen a doctor in five years is generally going to have more medical issues in need of treatment than a patient who gets a yearly physical.

Both of these factors mean that a new clinic relies heavily on the uncompensated care fund in its first year of operation — and CHCs have expanded significantly in recent years. Morton Comprehensive Health Services, another Oklahoma CHC, jumped from four locations in 2004 to 19 locations in 2014, and Community Health Centers Incorporated doubled their locations in the last decade. Statewide, the number of patients seen by CHCs annually has increased by nearly 30,000 in the last three years alone.

That level of expansion, according to Variety Health’s CEO Lou Carmichael, would have been impossible without state support. In FY 2014, the Legislature allocated over $300,000 specifically “to assist with the continued expansion of … Federally Qualified Health Centers.” And they’ve been good investments. Cost per patient seen at a CHC has increased by only 1.5 percent since 2010, compared to about 4 percent in 2012 alone for those with employer-sponsored insurance. But without the uncompensated care fund to help sustain CHCs, the state is going to stop seeing good returns on that investment.

 “Every day we’re open, we lose money,” McCarthy says. Community Health Connections is losing between $75,000 and $85,000 every month without reimbursement from the uncompensated care fund. Morton Health Services is losing about $200,000 per month. They’re struggling with cutting services without compromising vital care. Community Health Centers, Inc. has reduced its outreach to its homeless client base, impacting about 200 people. Community Health Connections has had to eliminate behavioral health services, affecting approximately 1,000 patients, and has reduced hours for its dental clinic. Ninety percent of the patients seen at that dental clinic have never seen a dentist before; it’s a needed service that many are now going without.

Morton Comprehensive Health Services has let some staff go, according to CEO John Silva, and may have to close satellite locations, leaving some rural Oklahomans without primary care. The best case scenario is that they go to emergency rooms instead, incurring high payments they can’t afford. The worst case scenario is that people die because they can’t afford to see a doctor.

It’s true that some of the pressure on CHCs would be alleviated if the state were to accept federal funds to extend coverage to the 144,850 low-income Oklahomans currently trapped in the ‘coverage crater.’ But even then, some patients would remain uninsured.

Now Oklahoma’s Community Health Centers are in limbo, hoping for supplemental funding to get through the end of June. They estimate that they’ll need just shy of $5 million to get through the end of the year. Five million isn’t, in the grand scheme of the budget, a lot of money – recent Capitol renovations cost approximately that much.

But in the meantime, community health centers are struggling.

“I don’t know,” Silva says. “I don’t know where we go from here.”

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ABOUT THE AUTHOR

Carly Putnam joined OK Policy in January 2014. She previously worked as an OK Policy intern. A Kansas City native, Carly graduated from the University of Tulsa in December 2013 with a BA in Sociology and Women’s and Gender Studies. As a student, she was a participant in the National Education for Women (N.E.W.) Leadership Institute and interned with Planned Parenthood. She is a graduate of the Oklahoma Center for Nonprofits Nonprofit Management Certification Program, the Oklahoma Developmental Disabilities Council’s Partners in Policymaking program, and The Mine, a social entrepreneurship fellowship in Tulsa. She previously served as board president for United Campus Ministry at the University of Tulsa. At OK Policy, Carly supervises policy staff and conducts research focusing on health care and the safety net.

One thought on ““I don’t know where we go from here”: Community health centers caught in limbo

  1. Great article and thanks to the OPCA for publishing–just sending a friendly amendment and a few comments: The article states that “Morton Comprehensive Health Services, (Inc.) another Oklahoma CHC, jumped from four locations in 2004 to 19 locations in 2014, and Community Health Centers Incorporated doubled their locations in the last decade. ”

    To clarify: MCHS increased to 6 Community Health Centers (CHCs) by 2014, and today oversees the largest CHC system in NE Oklahoma.

    Thanks to President Bush and Congress in 2003, Oklahoma’s FQHC/CHC system was given the opportunity to increase its primary health center system from 4 CHC central sites to 19–with an increase of 60 satellites across the state–all, by 2013.

    Readers may also not know that all FQHCs must be non-profit organizations and they must also be led by a 51% consumer/ user board. Federal (FQHC) certification brings a higher audit standard to these health centers with base grant funding and this funding has not increased for over a decade, even as MCHS’ population served has nearly doubled–Only a fifth of MCHS’ budget is assisted by the federal grant, the rest must be raised through insured patients, fees, and grant assistance.

    MCHS is also currently certified by Joint Commission, is recognized as a Primary Care Medical Home (PCMH) bringing a high standard of continuity of care to each patient, was granted a recognition by HRSA for meeting high quality of care standards in 2014 and was awarded the 2014 Oklahoma Champion of Health for the Uninsured. This CHC system is also certified to receive all public and private insurance available in Oklahoma and has been certified by the appropriate bodies to enroll residents in all eligible insurance including all private, marketplace, Medicaid, Soonerplan, Soon-to-be-Sooners, SCHIP, and Medicare.

    Finally, the reason FQHCs receive a Prospective Payment System rate from Medicaid (and soon Medicare)–which pays about 73% of the actual cost per encounter–is that each FQHC encounter payment encompasses the costs of all-inclusive care, including bad debt and the cost of encounters for those without insurance. All care incorporated in MCHS’ FQHC cost per encounter encompasses full and wholistic primary care preventive services, including: primary medical, primary dental, discounted prescriptions, discounted labs/x-rays, optometry, behavioral health, free dedicated homeless primary care services, and lift-equipped free transportation to and from scheduled appointments to remove all access barriers.

    FQHCs like Morton also serve as committed community partners. Embedded programs like those at MCHS include the first regionalTeaching Health Center (THC) in partnership with OU Community Medical School’s medical family practice residents, Legal Aid of Oklahoma’s model Medical Legal Aid program, WIC and voter registration, Healthy Start and Children First, the Take Control Program, the Title X program, the Susan G. Komen Breast Health program, the ADvantage Case Management Program for in-home supports, Audiology and Communication services, daily free transportation routes to 26 social service agencies and discount stores, and inclusive lifespan programs which are child, teen, adult and senior friendly.

    The average FQHC in the United States sees 30% uninsured patients. Today, MCHS sees 58% and Community Health Connection sees 66% uninsured. This high uninsured patient population percentage is simply unsustainable for CHCs like those in Oklahoma’s FQHC system, especially without state assistance through the state uncompensated care pool.

    According to the National Association of Community Health Centers, CHCs are the largest system of primary care in the nation. To support the most efficient and highly rated system of preventive, primary care in the United States, contiguous states to Oklahoma offer state assistance to FQHCs at a much higher and much more reliable rate.

    Unfortunately and as reviewed in this article, in 2014, Oklahoma’s legislature decided to cut FQHC state assistance offered by the State Health Department’s uncompensated care pool. This cut is forcing Community Health Centers to pull back services, leaving uninsured patients with few options other than expensive emergency room care which only pass their costs to those who have insurance.

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