Community Health Centers: The Rest of the Story
In Colorado, Federally Qualified Health Centers (FQHCs) and the state are actively cooperating to build a publicly run managed care system that does not pay taxes and does not, as far as anyone can tell, operate any more efficiently than the private managed care systems already in existence. As of 2009, an estimated 30 percent of Colorado’s Medicaid population received care at FQHCs.
Colorado Medicaid makes extensive use of Federally Qualified Health Centers (FQHC) and FQHC look-alikes in its managed care network. Many of those FQHCs are owned or run by government entities.
Higher Costs. Although most people probably imagine that community health centers are an inexpensive way to provide health care to poor people, the Colorado experience suggests otherwise. Medicaid payments to the FQHCs are far above Medicaid rates for private physicians and clinics. The following chart shows private and FQHC reimbursement rates since 2001. The numbers were provided to the Colorado legislature by state officials at a 2009 state budget hearing.
By steering patients to the more expensive clinics, the state Medicaid department ensures that taxpayers pay top dollar for primary care visits.
Community Health Centers versus Medicaid. Defenders of FQHCs often claim that the Clinics offer care at reduced cost. In defense of this view of private charges and Medicaid reimbursement rates, here is a representative comparison provided to the Colorado legislature in 2009:
The problem with this comparison is that federal law exempts the FQHCs from state Medicaid reimbursement rates. It requires that Medicaid and Medicare reimburse all FQHCs for “reasonable costs.” And since federal law requires payment of reasonable costs, both clinic reimbursements and Medicaid department contractors are protected when there are cuts in Medicaid. As one would expect, the Clinics have their own trade association. It vigorously supports Medicaid expansions.
Community Health Centers versus Private Practice. By driving Medicaid and Colorado SCHIP clients into FQHCs and failing to pay the same rates to private physicians as FQHCs, the state Medicaid program discriminates against Colorado’s private physicians and hospitals.
The state Medicaid program also discriminates against private health care by paying for FQHC equipment, buildings, offices, and staff through its Comprehensive Primary and Preventive Care Grant Program. Physicians and nurses practicing at the FQHCs enjoy special malpractice protections. Because they are organized as nonprofits, the clinics also enjoy favorable tax treatment.
The Case for a Level Playing Field. When all subsidies are included, and adjustments are made for the possibility that the clinics’ mid-level practitioners see fewer patients per unit of time than private physicians do, it is possible that Medicaid would cost less if the State of Colorado simply put public and private Medicaid providers on an equal footing and stopped trying to replace private medical care with a government run system.
Institutional Background. Denver Health has a network of satellite “family health centers” that are FQHCs. Denver Health is run by the Denver Health and Hospital Authority. The Hospital Authority is a political subdivision of the State of Colorado. It was created in 1994. Its Board of Directors is appointed by the City of Denver.
The Colorado Community Managed Care Network consists of 12 FQHCs. It is a corporate member of Colorado Access. Colorado Access is one of the entities favored by Colorado Medicaid in its efforts to enroll Medicaid and SCHIP kids in managed care. Other corporate partners of Colorado Access include the University of Colorado Hospital, and University Physicians, Inc., the provider group that staffs the University of Colorado Hospital. The University of Colorado Hospital is run by the University of Colorado Hospital Authority, an entity established by the Colorado legislature in 1991.
Interesting post. I had no idea this was going on.
Federally Qualified Health Centers (FQHCs) are less efficient than they could. In order to operate one, a city or state has to meet all federal guidelines and provide all the services mandated of FQHCs. For instance, if a city just wants a clinic, they are required to offer dental services as well.
I know George W. was a big supporter of community health centers. But after reading Linda’s post, I have no idea why. Is this a Republican approach to health policy?
Vicki, it was another bad Bush idea.
Very good post Linda. This is the type of piece you don’t see at other sites.
On behalf of the Colorado Community Health Network:
We agree with Mr. Goodman’s call for adequate reimbursement to private health care providers. Unfortunately there are some errors in his analysis. Private primary health care providers are not adequately reimbursed for their costs by Medicaid, a big factor in why many will not accept more than a limited number of patients who are covered by Medicaid.
The Federally Qualified Health Center (FQHC) model is specifically designed to provide patient-centered health care to low-income persons, whether covered by Medicaid or other forms of insurance or not at all. The typical Health Center patient arrives at our doors with multiple conditions and barriers to health care including limited income, transportation needs, language barriers, and sometimes limited knowledge of health care and the health care system. That is why the FQHC reimbursement rate is designed to cover the cost of all of the services provided to Health Center patients, including those that help them make the most effective use of the services. Please note that Health Centers are by definition located in areas where there are not enough primary health care providers to meet the communities’ health care needs. They do not replace private medical care. FQHCs are also required by law to operate as non-profit entities – fourteen of the fifteen in Colorado are private non-governmental entities, and one is a city-owned system that is an integrated health center and hospital system.
The FQHC model came about to address the health care needs of those who are not able to be well-served by the U.S. health care system. Further, FQHCs do not enjoy the level of protection that Mr. Goodman states that they do. In Colorado, during the last budget cycle, FQHC reimbursement rates from Medicaid were in fact lowered. The Comprehensive Primary and Preventive Care Grant Program funding was cut altogether.
We fully recognize that there are still 60 million in America who do not have access to the health care they need, because there are no providers where they live or providers do not serve them because they are on public insurance. The job is bigger than we are: we cannot meet all health care needs, nor can our brothers and sisters in private practice. That is why we must work together to make our health care system more effective and that is why we continue to support adequate compensation to all qualified primary health care providers from all payor sources, whether private insurance or state, federal, or donor funding.