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Medicaid opt-out resulting in enormous losses for community health centers

kkrisberg — Thu, 15 May 2014 13:43:01 +0000

Medicaid opt-out resulting in enormous losses for community health centers

$569 million. That’s how much revenue community health centers will miss out on because their state legislators decided not to expand Medicaid eligibility. The loss means that many community health centers will continue to struggle to serve all those in need, others will have to cut back on services and some could be forced to shut down altogether.

“In some ways, it’s status quo,” Peter Shin told me. “But for many of them, it’s a bleak status quo.”

Shin co-authored a recent report on the impact of the Affordable Care Act (ACA) on uninsured patients at community health centers, zeroing in on the contrast between states that did expand Medicaid eligibility and those that didn’t. (Quick background: While the health reform law originally required all states to expand Medicaid, with the federal government picking up the majority of the tab, the Supreme Court ruled that states could opt out of expansion and not get penalized.) The report, which was released May 9, found that because policymakers in 24 states have not accepted the Medicaid expansion, 1.1 million community health center patients will remain without health insurance, with patients living the South feeling the greatest impact. Because the new coverage system was created with an assumption that all states would expand Medicaid eligibility, those 1.1 million people now fall into the ACA’s coverage gap — in other words, their incomes don’t qualify them for Medicaid or for subsidies in the new insurance marketplace.

Among health center patients who will lose out on Medicaid coverage, 71 percent live in the South, which was already home to some of the country’s highest uninsurance rates and is still home to some of the biggest health disparities. And 35 percent of the 1.1 million live in just five states: Alabama, Florida, Georgia, Louisiana and Mississippi. Compare that to health centers in states that did expand Medicaid — those centers will realize more than $2.1 billion in additional revenue, which can then go toward expanding service capacity, building new locations and reaching more of a community’s most vulnerable residents. The eligibility expansion is also predicted to insure an additional 2.9 million community health center patients, the report found.

The 544 community health centers located in states without expanded Medicaid cared for 7.6 million patients in 2012, of whom a little less than 3.2 million were uninsured, found Shin and co-authors Jessica Sharac and Sara Rosenbaum. Compared to 2011, those numbers represent an increase of about 250,000 patients, of whom more than 106,000 had no health insurance. The report estimates that about 72 percent of uninsured patients living in states that opted out would have gained coverage under expanded Medicaid eligibility. Citing previous research that suggests a link between Medicaid expansion, better health outcomes, lower mortality and more cost savings, the authors wrote:

In effect, the uninsured patients who would have been eligible under health reform will continue to forgo or delay care and remain at increased risk for more costly health problems that could have been prevented or treated earlier. …Numerous studies indicate that expansion and the infusion of federal Medicaid funding generates net economic and cost-savings gains. However, the decision to opt out of the Medicaid expansion ensures greater spending on uncompensated care and lower federal payments compared to those received in expansion states. In 14 opt-out states alone, uncompensated care costs are expected to increase by $1 billion and $8.4 billion less in federal funding will be received.

Shin, an associate professor in the Department of Health Policy at the George Washington University Milken Institute School of Public Health and director of research at the RCHN Community Health Foundation, said that even though community health centers will financially benefit from rising numbers of people with insurance, it won’t be enough to fill the revenue gap in Medicaid opt-out states. In fact, according to a new fact sheet from the National Association of Community Health Centers (NACHC), about 40 percent of currently uninsured patients will remain without insurance.

And while some might assume that demand for community health center services would go down in the age of health reform, the opposite is true — demand is rising. The NACHC fact sheet cites a study on Massachusetts, where in 2006, when the state implemented health reform, centers were caring for 22 percent of all uninsured residents. In 2009, that number was up to 38 percent. Initially, Shin told me, some newly insured patients might seek out other doctors, but they’re likely to return to the community health center — the place they know and trust.

“Health centers in low-income states are sort of seen as the providers of last resort, but in a lot of communities, they’re really the only ones that are accessible,” said Shin.

On top of Medicaid losses, community health centers are also facing funding problems, Shin noted. The ACA originally authorized an $11 billion trust to support community health center expansion and it was intended as an additional pot of money. However, it’s increasingly being used to backfill severe cuts in the federal budget. All that points to a “lot of uncertainty about whether (centers) can build up or have to hunker down,” he said. Shin also added that centers in Medicaid expansion states will have the opportunity to tackle broader public health issues, while those in opt-out states are “really just trying to maintain.”

According to NACHC, community health centers’ unique approach to patient-centered and preventive care generates $24 billion in yearly savings to the health care system. Click here for a copy of “Assessing the Potential Impact of the Affordable Care Act on Uninsured Community Health Center Patients: An Update” and here to see an accompanying infographic.

Kim Krisberg is a freelance public health writer living in Austin, Texas, and has been writing about public health for more than a decade.

kkrisberg Thu, 05/15/2014 - 09:43

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government

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budget cuts

How many people can health centers serve? It depends on federal funds and Medicaid expansions

lborkowski — Tue, 19 Nov 2013 15:30:46 +0000

How many people can health centers serve? It depends on federal funds and Medicaid expansions

I've written before about the importance of the Affordable Care Act's Medicaid expansion and about the role of community health centers in delivering primary care to underserved patients. With roughly half of the states declining the now-optional Medicaid expansion and an uncertain federal funding environment, though, the extent to which health centers will be able to serve the newly insured is up in the air. A new report from the Geiger Gibson/RCHN Community Health Foundation Research Collaborative puts some numbers on the variability. Under different Medicaid expansion and funding scenarios, the number of patients community health centers can care for in 2020 could be as low as 20 million or as high as 37 million. (Disclosure: the Geiger Gibson Program is based at the George Washington University School of Public Health & Health Services, where I work.)

Community health centers -- also known as federally qualified health centers, or FQHCs -- provide comprehensive, high-quality primary care to all, regardless of insurance status. Nationally, 72% of health centers' patients live at or below the federal poverty level; 36% are uninsured, and 39% have Medicaid or CHIP coverage. Community health centers are a natural source of primary care for new Medicaid enrollees and others gaining coverage under the ACA, so the law included substantial additional funding for health center expansion through 2015. In states that are expanding Medicaid eligibility to legal residents with incomes of up to 133% of the federal poverty level, health centers will also get additional revenue as more of their patients gain Medicaid coverage.

The report's authors calculate health center capacity under "high" and "low" federal funding scenarios, and under two Medicaid expansion scenarios: one in which all states expand Medicaid, and one in which only the states that have already stated an intention to expand Medicaid do so. (The latter scenario involves 25 states and DC expanding Medicaid eligibility.) Here are their estimates of how many patients health centers will be able to serve in 2020 under different conditions:

Low federal funding, limited Medicaid expansion: 20.1 million patients -- a reduction from the 21.1 million health centers currently serve.
High federal funding, limited Medicaid expansion: 35.6 million patients
Low federal funding, full Medicaid expansion: 20.8 million patients
High federal funding, full Medicaid expansion: 37 million patients

It's interesting to see that even without additional states expanding Medicaid, higher levels of federal funding can still increase health center capacity substantially. What these numbers don't show, however, is the potential for an ever-growing gap in healthcare access between states that do and don't expand Medicaid.

lborkowski Tue, 11/19/2013 - 10:30

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CHCs

FQHCs

Medicaid expansion

Immigration reform and the healthcare safety net

lborkowski — Wed, 30 Jan 2013 12:50:51 +0000

Immigration reform and the healthcare safety net

In Wonkblog yesterday, Sarah Kliff highlighted an important aspect of immigration reform: Undocumented immigrants who gain legal status will also gain access to the Affordable Care Act’s options for getting health insurance. The Congressional Budget Office estimated that the ACA would reduce our nonelderly uninsured by 32 million, but 23 million people would remain without health insurance – and one-third of those people would be undocumented immigrants.

The ACA has two main mechanisms for offering affordable coverage to the uninsured: 1) expansion of Medicaid eligibility to all legal residents with income up to 133% of the federal poverty level, which the Supreme Court has since made optional for states, and 2) creation of state-based health insurance exchanges through which individuals and small businesses can purchase affordable, good-quality insurance and through which individuals can receive premium subsidies if their incomes are between 133% and 400% of the poverty level. Undocumented immigrants have long been ineligible for Medicaid, and the ACA prohibits them from purchasing insurance through the exchanges. So, these two routes to insurance coverage are closed to undocumented immigrants.

Uninsured patients have long gotten care from community health centers, which provide primary care to all who seek it regardless of insurance status or ability to pay, and hospitals, which must screen and stabilize anyone who shows up in an emergency department requesting care. (Emergency rooms and community health centers are key parts of the “healthcare safety net,” which delivers health services to vulnerable populations.) Due to Congressional decisions, though, many health centers and hospitals will find it hard to continue serving the uninsured who’ll still visit them as the ACA is implemented.

Under the ACA, hospitals that have relied on “disproportionate share” funding meant to offset costs of caring for uninsured patients will see that funding slashed. Medicare and Medicaid’s “Disproportionate Share Hospital” programs are designed to send funds to hospitals that deliver lots of uncompensated care to low-income patients. Under the ACA, those payments will fall to half their former levels. These cuts were made on the assumption that hospitals would provide far less uncompensated care as uninsurance rates fell. However, hospitals that treat large numbers of undocumented immigrants and those in states that decline to expand Medicaid eligibility will still be delivering lots of uncompensated care. The New York Times’ Nina Bernstein explored the impacts on some of the hospitals that are seeing their DSH funds decline as their burdens of uncompensated care remain high.

Denying insurance opportunities to undocumented immigrants also has implications for the community health centers that provide care to much of the uninsured population. Federally qualified health centers do get federal grants to assist them in serving the uninsured, but they also rely heavily on Medicaid. Right now, a lot of uninsured undocumented immigrants with incomes below 133% of the federal poverty level are paying very little for care from community health centers; if a portion of these patients were to get Medicaid coverage and continue getting their primary care from CHCs, the health centers' finances would be better off.

Health centers face another ACA-related challenge, too: Many of those who gain Medicaid coverage will seek care from CHCs, which have long been a major provider of high-quality, cost-effective care to Medicaid beneficiaries (and to immigrants who appreciate health centers’ commitment to providing care to non-native English speakers). In anticipation of a surge in demand for health center services, the ACA included an $11 billion Health Center Trust Fund to enable health center expansion. But, as I wrote back in August, Congress raided that pot:

Under the ACA, Health Center Trust Fund money should have totaled $1 billion in FY 2011, with most of that money going to health-center capacity expansions. But the April 2011 budget deal that averted a government shutdown slashed that to $600 million, and most of that was shifted from expansions to ongoing operations because the budget for funding existing centers’ operations was also cut. The FY 2012 federal appropriations level is also far below the amount specified in the ACA, and will also have to be largely devoted to sustaining existing capacity rather than adding new capacity. (If you want all the gory details, they start on page 12 of this brief from the Kaiser Commission on Medicaid and the Uninsured.)

Congress should fully invest in community health center expansion and figure out a way to ensure (through DSH payments or another mechanism) that hospitals delivering high levels of uncompensated care are able to survive financially. They should also consider the healthcare safety net when drafting immigration-reform legislation. Allowing immigrants who’ve applied for, but not yet received, green cards or citizenship to purchase subsidized coverage through the exchange would be one way to ease the burden on the providers that care for undocumented immigrants.

lborkowski Wed, 01/30/2013 - 07:50

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Where will new Medicaid beneficiaries get healthcare?

lborkowski — Thu, 09 Aug 2012 15:33:06 +0000

Where will new Medicaid beneficiaries get healthcare?

Millions of people will gain insurance under the Affordable Care Act, but will they be able to get appointments with healthcare providers? Coverage doesn't automatically translate into access, and some newly insured individuals will struggle to find physician practices that will take them on as patients. In particular, states that adopt the (now optional) Affordable Care Act Medicaid expansion, which extends eligibility to adults up to 133% of the poverty level, may encounter a severe shortage of providers willing to accept new Medicaid patients. Although Medicaid reimbursement levels vary from state to state, in general they're substantially lower than other payers' rates.

A study by Sandra L. Decker in the latest issue of Health Affairs gives us some hard numbers on physicians' willingness to accept new Medicaid patients. Decker, an economist at CDC's National Center for Health Statistics, used recent survey data to investigate what percentage of physicians are accepting new Medicaid patients and how states' different payment rates might affect physicians' willingness to accept these patients. The data are from the Electronic Medical Records Supplement to the National Ambulatory Medical Care Survey (NAMCS), which annually surveys a randomly selected sample of nonfederally employed physicians primarily engaged in office-based patient care. Decker analyzed 4,326 physician responses to the survey's 2011 EMR supplement, which asked physicians if they were accepting new patients and, if so, which types of payments they accept from the new patients.

Decker found that overall, 96% of physician practices (94% of primary-care providers and 98% of specialitsts) reported accepting new patients, but only 69% of physicians said they're accepting new Medicaid patients. For comparison, here's the breakdown of physicians who reported accepting new patients with each of the following payment types:

92% accepting new self-pay patients
83% accepting new Medicare patients
82% accepting new privately insured patients
69% accepting new Medicaid patients

Factors associated with a greater physician likelihood of accepting new patients included being part of a group (rather than solo) practice, being located outside of metropolitan statistical areas, and practicing in counties where at least 15% of the population was under the federal poverty level. But the most important finding for policymakers is this: Acceptance rates of new Medicaid patients were higher in states with higher Medicaid-to-Medicare fee ratios.

In New Jersey, for instance, only 40% of physician respondents said they were accepting new Medicaid patients; Wyoming is at the other end of the spectrum, with a 99% acceptance rate. Here's Decker's description of the states with higher-than-average acceptance rates:

Twenty-one states had acceptance rates for new Medicaid patients that were significantly higher than those of other states. These states included several in the Midwest and West, two states in New England (Massachusetts and New Hampshire), and five in the South (Arkansas, Kentucky, Mississippi, South Carolina, and West Virginia).

Decker's analysis found that increasing physician Medicaid payments to Medicare levels would increase the national average acceptance rate of new Medicaid patients from 70% to 79%. Such an increase is slated to occur under the Affordable Care Act for 2013 and 2014, but Decker notes that the temporary nature of these increases might mitigate their impact.

Among the study limitations Decker highlights is the use of county-level poverty and Medicaid and Medicare fee data from 2008 while the survey data on new-patient acceptance is from 2011. She also notes that she didn't have data on other factors potentially important to Medicaid acceptance rates, like Medicaid administrative barriers or payment delays.

Another Solution: Community Health Centers
Raising states' Medicaid provider payment rates isn't the only way to increase Medicaid beneficiaries' access to care. Community health centers are already a major source of care for Medicaid beneficiaries, as well as for the uninsured. Health centers are located in underserved communities and provide comprehensive primary care to everyone who comes to them, regardless of insurance status, and charge sliding-scale fees based on income.

Over 20 million people get care at 8,000 health center sites across the country (search here for sites near you). Health centers provide comprehensive prenatal care, chronic disease management, nutritional counseling, and enabling services like translation and case management. By providing high-quality primary care, they help prevent negative health outcomes like low birthweight and heart attacks -- and that translates into savings for the health system, as well as improved quality of life for families and communities. Health centers also have bipartisan appeal; President George W. Bush gets credit for doubling federal funding to health centers during his time in office.

Given that community health centers are already providing high-quality, cost-effective care to underserved populations, they're a natural source of primary care for new Medicaid enrollees and other previously uninsured people who gain coverage under the ACA. The law's creators knew this, and included an $11 billion Health Center Trust fund in the ACA for health center capital expenditures and expansions over the FY 2011-2015 period. (Many health centers also received stimulus funds to improve and expand their facilities.) But, as we saw with the Prevention and Public Health Fund, both the Obama Administration and Congress seem to have a hard time resisting the temptation to raid public-health investment funds to plug other budget gaps.

Under the ACA, Health Center Trust Fund money should have totaled $1 billion in FY 2011, with most of that money going to health-center capacity expansions. But the April 2011 budget deal that averted a government shutdown slashed that to $600 million, and most of that was shifted from expansions to ongoing operations because the budget for funding existing centers' operations was also cut. The FY 2012 federal appropriations level is also far below the amount specified in the ACA, and will also have to be largely devoted to sustaining existing capacity rather than adding new capacity. (If you want all the gory details, they start on page 12 of this brief from the Kaiser Commission on Medicaid and the Uninsured.)

Investing in community health center expansion could help create the capacity we'll need to serve new Medicaid beneficiaries and others who gain insurance coverage under the ACA beginning in 2014. It could also lead to better health and long-term healthcare savings in the communities where health centers operate. The hardest part seems to be convincing Congress to resist budget brinksmanship and let the US make this sensible investment in health.

lborkowski Thu, 08/09/2012 - 11:33

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Medicaid

More Misguided Budget-Cutting: Community Health Centers

lborkowski — Thu, 17 Mar 2011 14:00:27 +0000

More Misguided Budget-Cutting: Community Health Centers

Earlier this week, the Geiger Gibson/ RCHN Community Health Foundation Research Collaborative released a policy research brief that estimates the impact of the House of Representatives' proposed reduction in funding to community health centers. (Full disclosure: the Geiger Gibson program is part of the George Washington University's School of Public Health & Health Services, where I work, and I've taken classes taught by Sara Rosenbaum, one of the authors of the brief.) I'm sure most readers won't be surprised to learn that cuts to community health center funding won't really save money - like cuts to poison control centers, they'll lead to higher costs down the road.

The House proposal for the remainder of FY 2011 includes a reduction of $1.3 billion in health center funding, down from the $2.48 billion in President Obama's budget. While this cut wasn't in the Senate's proposal, I'm sure it's still on the table in ongoing FY 2011 budget negotiations, and it may be just a prelude to larger proposed cuts for FY 2012.

The brief's authors, Peter Shin and Sara Rosenbaum, calculate that the proposed funding reduction would eliminate access to healthcare for between 10 and 12 million patients. CHCs provide affordable access to high-quality primary and preventive care in locations that are underserved by other healthcare providers. Because their fees are based on patients' ability to pay, they fill a crucial need for those who are unemployed, uninsured, or otherwise unable to afford healthcare in other settings - a population that has grown during the economic downturn.

CHCs' contributions to the health of the communities they serve include comprehensive prenatal care and management of chronic conditions, among many other services. Because such services can avert negative health outcomes like low birthweight and health crises that necessitate emergency-room visits, CHCs achieve healthcare savings. Shin and Rosenbaum estimate that reducing FY 2011 CHC funding by $1.3 billion would translate to losing approximately $15 billion in cost savings. Or, every dollar of funding reductions means a loss of $11.50 in potential savings.

I really don't want to think that the majority of the House of Representatives is lacking in basic math skills or is comfortable with 10 to 12 million people going without important healthcare services. But I can't understand how anyone would think this kind of cut is a good idea.

lborkowski Thu, 03/17/2011 - 10:00

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budget cuts