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CloudView blog

Ideas and insights to help health care providers stay informed and profitable in today's challenging health care environment.

FQHC Success Vital to Health of Underserved Communities

by Todd Rothenhaus, MD, Chief Medical Officer

As safety net providers, Federally Qualified Health Centers (FQHCs) fill a huge void in American health care. They are at the front-lines serving the most vulnerable and delivering care of equal or better quality as the most lavishly funded medical groups. Growing inequality, reduced social mobility, and the thinning of the middle class means that the provision of health care to underserved communities has never been more important.

I feel a deep affinity with FQHCs and share their sense of mission. I spent 12 years as an emergency physician at Boston City Hospital, seeing patients referred from Boston’s numerous community health centers. Without fail, calls to patients’ primary care physicians (PCPs) were actually returned by the patients’ PCP, and despite the complexity and social challenges faced by the patient, the PCP would frame the case and help with decision-making. That experience cemented the realization that quality care was about patients and providers, and had little to do with institutional resources or an organizations’ balance sheet. There are good and bad doctors and where they practice is no way of ensuring you are going to get a good one. If anything, providers which choose mission over personal revenue are far more likely to stay up to date and try new things. To my mind, FQHCs are an inspirational story for those of us that still feel it’s the responsibility of our institutions, not just our physicians and other providers , to care for all our citizenry. However, like all organizations in health care they face major changes and uncertainty.

Today there are some 1,200 health centers in the country that qualify for enhanced Medicare and Medicaid rates as FQHCs. Together they care for more than 21 million people annually — the vast majority live in medically underserved populations as determined by a lack of primary care providers in their area, high infant mortality, high rates of poverty, homelessness or large elderly populations. Research shows they make an impact. Studies have found that uninsured individuals living near FQHCs are less likely than others to have unmet health needs, to visit an emergency room or to have an inpatient stay.

Last week, athenahealth hosted executives from FQHCs around the country in Boston for a leadership course with Harvard Business School professor Amy Edmonson as part of our ongoing efforts to partner with and support FQHCs. Attendees represented diverse institutions. As one participant said, “If you’ve seen one FQHC, you’ve seen one FQHC.” Nonetheless, here are some of the key areas of focus that emerged during discussions:

Increased Demand

The Affordable Care Act (ACA) envisioned a greater role for FQHCs, creating a $11 billion Community Health Center Fund, enough for 300 new health centers and more than 600 clinics around the nation. The creation of new FQHCs and the expansion of existing centers is a necessity given the increased demand the ACA is likely to spur; states have already enrolled millions of new Medicaid beneficiaries in 2014, and many FQHCs may not be equipped to handle a potential influx of new patients. Even with federal funding, expanding the size of health centers and medical staff presents a significant operational challenge. The ACA’s funding also expires after five years, but ordinary capacity needs will be greater after that point than they were before coverage expansion, since fluctuations in the Medicaid population in a given area will be larger under new eligibility rules in expansion states.

Potential Payment Cuts

FQHCs are dependent on preferential Medicare and Medicaid reimbursement that incorporates their average costs, as opposed to typical CMS payments which fall short of fully-allocated costs of treating beneficiaries. Few FQHCs could survive if they were reimbursed at standard rates because (unlike non-FQHCs) their reimbursements from commercial insurance, which provides on average only between 7-12% of FQHC revenue, would not make up for any shortfalls from public payers. As a result, FQHCs are particularly sensitive to potential funding cuts. Some FQHCs are seeking to increase revenue from commercially insured patients to provide new funding and minimize this risk, but doing so could potentially hurt their mission to serve indigent patients. It’s a perennial question: how do you balance mission and margin?

Improving Care Coordination

As the major primary care providers in their area, FQHCs suddenly find themselves at the center of their regional health care value chain. That means they are having to adjust to “coopetition.” As one participant said, “Many of our patients were neglected by hospitals — specialists didn’t want our self-pay or Medicaid patients. Now with the ACA, our patients have a dollar sign in front of them, and everyone wants them.” On the other side, retail clinics are competing for FQHC patients’ wellness business, only to refer to FQHC for chronic disease treatment and maintenance.

With these and other uncertainties on the landscape for FQHCs, having the right strategic partners — including IT services — can provide FQHC’s the flexibility and agility required to thrive. Participants at the leadership institute heard from Dr. John Sawyer, the chief medical officer at Hudson Headwaters Health Network (HHHN), a FQHC with 60,000 patients spread across 13 offices. In 2008, Hudson Headwaters was hobbled by outdated business processes and poor cash flow. With athenahealth as its strategic partner, HHHN was able to increase collections, reduce days in accounts receivable, and achieve Patient Centered Medical Home (PCMH) Level 3 certification.

Through our work with HHHN and other FQHCs, we continue to deepen our understanding of the needs of these vital institutions, and support them so that they, in turn, can support America’s medically underserved populations. I am optimistic. As one CEO of an FQHC replied to Professor Edmondson when asked to name her organization’s greatest strength, “We are tough. We are battle tested. We know how to survive because we deal with adversity every day.” What an inspiring sentiment!

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