Perceptions about Medicaid Expansion and ACA Might Penalize Community Providers

The community health system provides critically needed care, and serves as the “safety net” for many. The creation of the Affordable Care Act, and Medicaid Expansion in many states has resulted in greater coverage and access to care for many who either had gone without health care, received much of their treatment in hospital emergency departments, had subsidized care in Community Health Centers and Public Health Offices (funded by state and federal allocations), or sporadic care where they could find it.

There is a misguided notion at state and federal levels that the Medicaid Expansion and new coverage through the Affordable Care Act (ACA) is now covering most of the people who had heretofore been seen as sliding fee scale patients in Community Health Centers and Public Health Offices, their care subsidized by various state and federal funds. During the summer of 2014, there was a move in Congress to cut back funding for Federally Qualified Health Centers (FQHCs) as well as Community Health Centers (CHCs) and Community Mental Health Centers (CMHCs) because people thought that Medicaid Expansion and ACA were now “solving the problem.” Thankfully, those efforts were stopped. Funding was not cut during the fall of 2014, and congress approved funding at normal levels. The recent round of federal 330 funding for CHCs, CMHCs and FQHCs continued, but many people in the field referred to the win not as a victory, but as our ability to “dodge the bullet this time.” Efforts to cut federal and state funding will continue and we should all be prepared with research and analysis as well as public policy initiatives and community mobilizing efforts.

At state levels, we see similar conversations as policymakers struggle to allocate funding in a period of diminishing resources and increasing needs. State elected and appointed officials may feel that the increased numbers of people covered through Medicaid Expansion and through enrollment in subsidized health insurance coverage through ACA obviates the need to fund community health and public health at former levels. If this thinking results in funding cuts at state levels to community based and public health system, we will seriously impair our community health system capacity.

We had a similar situation during the Welfare Reform discussions in the mid to late 1990s. During that time, there was a hard push to move people from welfare to work, and, in many cities across the U.S. where jobs were available, it was assumed that people on welfare could get many of those jobs. At the time, I was working in a number of states, helping communities to analyze what it would take for welfare recipients to move successfully from welfare to work, and what was required in job training, supportive services and the community system for people to succeed. Not surprisingly, it turned out that many of the jobs that were available were not a good fit for those seeking to move from welfare to work; and many people had to have affordable child care, transportation and job skills training to make it. Those communities that were able to analyze the situation, develop local and state resources, and mobilize a range of services did well. However, those that assumed that the numerous jobs available would be there for people seeking to move from welfare to work were badly misinformed. And many community and state initiatives suffered for lack of analysis and planning.

There are parallels with our current community health and public health systems at state and federal levels. And serious analysis and planning is required if we are to handle the transition in a mindful way. There are definitely more people now who have health insurance through ACA and Medicaid Expansion. As a consequence we can expect reduced levels of uncompensated or sliding fee scale care in most communities. If all of the people who previously had no health insurance who were served by the CHC/CMHC/FQHC network were to stay with their providers, then those providers would have additional revenue from Medicaid or third party billings. However, some of these newly insured are lured away by private practice groups, and the CHCs continue to provide service to all in need, primarily the poorest of the poor, especially those with no payor source. There are no other groups in the community that will provide services to the poorest of the poor except for our CHC networks. They are our modern re-design of the old “free clinics,” and they are desperately needed.

Our public health system faces a similar situation. Public health offices provide a wide range of services that include health counseling, immunizations, family planning, the Women Infants and Children (WIC) program, services for medically fragile children, and others. The network of public health staff provide resources to communities and individual providers. They are the champions of health planning and health system building that is community-based, accessible and focused on prevention and early intervention. Without a vibrant public health infrastructure, and continued vigilance about health, our health indicators will decline over time.

The situation for most CHCs is that they continue to have reimbursement rates that do not cover real costs, because they are serving the poor and near-poor, who have more complicated and chronic conditions which require more intensive and ongoing care. The CHCs, CMHCS and FQHCs are the ones who know patients by name, who call them to discuss their diabetic neuropathy, or the problems in recovering from a stroke. Their staff work with community members who are patients to help them access needed resources. And, in rural communities, these organizations are the community’s core health agencies, the primary gatekeepers for community health and wellness.

The handling of patient care for those with limited resources is never a simple mathematical equation. We know this from looking at how the Social Determinants of Health (SDOH) like education, income, and family support systems affect health. The CHCs and public health offices work with people who, by and large, have limited incomes and many challenging life situations which have an impact on their overall health. And their resources have been historically very tight, often augmented by a patchwork quilt of every-changing funding sources critical to maintaining services.

Although Medicaid Expansion and ACA are excellent initiatives which have increased access to health care, in the short run they do not significantly reduce the costs for providing care to the poor and near-poor. At state and federal levels, we need to analyze the impact of the Medicaid and ACA funding at the community level prior to making decisions about cutting funding at federal or state levels.

Many people believe that the advent of the Affordable Care Act’s subsidized care and Medicaid Expansion have taken care of much of the health care financing needs. They may think that this would significantly reduce the financing burden on states and the federal government. But, with apologies to Gershwin, “It Ain’t Necessarily So.”

If people perceive that the new subsidized health insurance made possible through the Affordable Care Act and Medicaid Expansion will now cover most of the formerly federal and state funded programs, that misperception could and might lead to large and potentially disastrous budget cuts. There should be some potential financial gain created by the new Medicaid Expansion and ACA related revenues, but, in all likelihood, it will be much smaller than anticipated.

If we allow things to unfold without a serious effort to analyze the impact and inform decisionmakers, then we will probably see cuts that are larger than any new revenues created by ACA and Medicaid Expansion. This could create devastating consequences for both the CHC network and public health at national, state and community levels.

We need to respond proactively, and I recommend the following:

  1. Develop and fund state and national plans to analyze the impact of ACA and Medicaid Expansion on community based health care.
  2. Provide support to the CHC network so that CHCs, CMHCs and FQHCs and Public Health Offices can collect data, and conduct analysis regarding how many previously uninsured/sliding fee scale patients are now covered by new insurance; how billings and revenues are affected; changes in ratios, etc. They should analyze funding shifts for all major programs and initiatives. This all must be done in ways that are HIPAA compliant, within the next year or two.
  3. Analyze data at state and federal levels, and use this data to make funding decisions about how much funding should change based upon increased health care coverage.

Decisions made that are based upon data and analysis will be better, and will more effectively serve our communities and those public health organizations that serve them. To cut based upon assumptions will be ill advised and could create long-lasting negative effects.

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