As the Maine Legislature debates whether to expand Medicaid to 70,000 people under the Affordable Care Act, 19 health centers with networks of sites across the state continue to open their doors to anyone, regardless of ability to pay. They are federally qualified health centers, and they operate on a federal funding model — essentially working around state government — to serve the uninsured and low-income individuals in areas with few medical resources.
They have sometimes found themselves in the middle of the Medicaid expansion debate, used as an example of why the state doesn’t need to provide health insurance to the poorest of the poor. If those uninsured individuals can just walk into a federally qualified health center and receive quality care at a very low cost, why should the state’s Medicaid program, MaineCare, pay for it?
For many federally qualified health centers, it’s a question of ensuring the health of their patients and their own sustainability.
“There has to be somebody, somewhere, who ends up paying for the costs of delivering that care to people who aren’t able to afford care,” said Jim Davis, CEO of federally qualified Pines Health Services, based in Caribou.
More costs without matching funds
Federally qualified health centers were first formed in 1964 to provide health care to low-income residents who otherwise would have difficulty accessing it. They provide comprehensive primary care, along with dental, mental health and pharmaceutical services. They also offer transportation and language services, and a majority of their board members must be patients.
For about 14 percent of the state’s population, or nearly 200,000 people, this is where they get their medical care. Some parts of the state, however, rely more on the centers than others. Pines Health Services, with sites in Caribou, Fort Fairfield, Presque Isle, Van Buren and Washburn, serves about 16,000 individuals each year, or 23 percent of Aroostook County’s population.
In 2012, 44 percent of patients at the health centers in Maine earned less than the poverty line, and 73 percent earned less than 200 percent of the poverty line, which was $22,340 that year. At Pines Health Services, 51 percent of patients lived below the poverty level, with 83 percent below the 200-percent threshold, according to the U.S. Health Resources and Services Administration.
The health centers fund their budgets from a variety of sources and operate on near-zero margins. They receive a baseline amount of federal money that might pay for anywhere between 5 to 25 percent of their operating expenses. They get reimbursements for their Medicaid, Medicare and private insurance-holding patients. They collect cash on a sliding scale from patients without insurance. (About 15 percent of patients are uninsured.) And they apply for grants.
Medicaid is the largest single source of funding for the centers. In 2012, it made up 30 percent of Maine centers’ revenue; nationally, it was 41 percent. Unlike in other states, Maine’s centers do not receive a state contribution to help cover the costs of the uninsured whom they treat. Many centers are experiencing lagging revenue relative to costs.
“The income we’re receiving isn’t increasing. Yet demand for services and expense of services is,” said Davis of Pines Health Services, which operates with an annual surplus of about a 10th of a percent.
Between 2010 and 2012, that center’s federal grant money increased 2.6 percent, while overall costs increased 21.6 percent due to an increase in patients and services and implementation of an electronic records system.
Where the newly insured turn
Federally qualified health centers are seen nationally as important players in the rollout of the Affordable Care Act because they are expected to treat a large portion the newly insured. After Massachusetts expanded its health care rolls, new enrollees largely did not shift to private practice physicians. They turned to the federally qualified health centers, prompting a 31-percent growth in patients between 2005 and 2009.
A similar scenario is likely under the ACA: Federally qualified health centers’ capacity is expected to double by 2019. The ACA acknowledged that likelihood when it set up a five-year Health Center Trust Fund to help the centers make the transition. Congress has cut annual health center appropriations in the meantime, however, raiding the trust fund to pay for the cuts. Also, the trust fund was always supposed to be supplemented with a variety of funding, including that from expanded Medicaid enrollment.
“We’re looking at the beginning of federal fiscal year 2016 when there’s no longer any Affordable Care Act trust fund, and if Congress doesn’t change the funding formula to recognize there’s no trust fund, that grant funding for community health centers could be cut by up to 70 percent,” Davis said.
The health centers have been viewed as a key part of the ACA not just because they will serve many of the newly insured but because they have records of keeping costs low and providing care comparable to that of private practice physicians even though their patients are poorer and sicker.
The Center for Healthcare Research & Transformation reviewed studies of the effectiveness of federally qualified health centers and found their patients have lower rates of preventable hospitalizations and lower emergency room visits compared with similar populations that didn’t use the health centers.
One Michigan study found the health centers in that state saved the Medicaid program $44.87 per member per month overall, compared with the cost of Medicaid beneficiaries who did not use federally qualified health centers.
More uninsured at Maine clinics
After Medicaid coverage was dropped for Maine childless adults and some parents on Jan. 1, some health centers have already experienced increases in the number of their uninsured — and a subsequent loss of reimbursement to help cover the cost of their care. At Nasson Health Care in Springvale, for example, 15 percent of its MaineCare patients lost coverage on Jan. 1, compounding the fact that 50 percent of all newly enrolled patients in the previous six months were uninsured.
For federally qualified health centers in Maine, Medicaid expansion would mean a few things. It would mean increased funding for strained budgets, as patients shift from using the sliding-scale system of payment to having insurance. And having insurance would mean low-income individuals are more likely to use preventive services like flu shots, health screenings and immunizations for their children, and seek care for chronic diseases before it’s too late — saving costs down the road.
More funding might mean more trained staff, more services, expanded hours of operation or special programs for particular areas of need, Davis said. The goal is always to improve the health of the population.
As lawmakers debate Medicaid expansion legislation, Davis said he would ask them to focus on the statewide implications of doing nothing:
“There is agreement everywhere that the system is broken and far too costly, and from my perspective we have little to show for all the money we’ve spent as a society on health care. But denying people care, throwing roadblocks in their way, is not the way to achieve a healthier population, improve individual health status and save money overall in the health care system. It will take us in the opposite direction and cost us more.”