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

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by April 7th, 2014 Posted in ,

Community 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.

CHCs 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.

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