Skip to main content

How the ACA Could Affect Your CHC

March 13, 2017

Business people on small boat surrounded by sharks

Congressional consternation continues in Washington D.C. Too many options from too many interest groups makes it difficult to find commonality to meet the needs of all Americans. Perhaps that is the Achilles’ Heel; i.e., no one plan will meet the needs of all. In the end, the most at risk populations… the poor, marginalized, and those in healthcare provider shorter areas (HPSA)… remain the most likely yet avoidable casualties of any sweeping reform beyond the Affordable Care Act (ACA).

Community health centers (CHCs; e.g., Federally Qualified Health Centers (FQHC), CHC Look-a-likes, etc.) are the one area of healthcare delivery on which both Republicans and Democrats should find common ground. The 1,200 CHCs afford access at more than 10,000 clinics and mobile units literally from Florida to Alaska… even the island Territories. The goal of all elected officials should be to sustain CHCs so they remain the viable backbone of the nation’s healthcare safety net.

Make no mistake, these are non-profit entities working on low single digit margins. Sustaining a viable reimbursement system is critical for their survival. The prospective payment system (PPS) methodology is a unique staple of CHC compensation. This fixed but heavily regulated1 PPS payment from Medicare and Medicaid allow CHCs to see Medicaid patients when other doctors (due to anemic Medicaid fee-for-service payment) can ill-afford to do so. Private practices keep Medicaid patients at 7-11.5% of all visits while CHCs patients represent 51%. It is an economic reality that Medicaid fee-for-service cannot sustain a business. Ask any private practice administrator and they will tell you, available schedule slots for Medicaid patients are intentionally kept to a minimum.

Why sustain fiscal viability of CHCs:

  • CHCs provide primary health care for 34% of the > 71 million Medicaid enrollees. If ACA fails, percent goes up.
    • CHCs offer “cradle to grave” care for newborns to elderly; e.g., primary care, Ob-Gyn, dental, behavioral health, 340b (discounted) pharmacy, and more.
  • Preventive care and screenings are a permanent fixture of CHC service offerings.
  • Federal PPS methodology affords CHCs the ability to see all patients regardless of ability to pay.
  • Sliding Fee Discount Scales (SFDS) are mandatory. CHCs slide fees based on Federal Poverty Guidelines.
    • Patients pay what they can afford based on an already existing federal schedule.

Is the annual rate of increase for Medicaid PPS controlled?

Leaders should assure the Medicaid PPS annual rate of increase is controlled. Political leadership could follow Medicare’s CHC PPS payment in which a singular “ceiling” of payment fluctuates based on a Geographic Adjustment Factor (GAF); i.e., more expensive regions get elevated payments, less expensive geographic areas see a downward adjustment. An annual escalator could follow CMS, the Medical Economic Index (MEI), or the FQHC Market Basket defined in the ACA.

To cover services beyond those offered at a CHC, a “major medical” high deductible health plan (HDHP) could be offered by state Medicaid programs with fees slid based on the Federal Poverty Guidelines. Like term-life insurance, this is the least expensive form of insurance but would, in the event of a medical emergency, afford financially disadvantaged patients the ability to have some coverage vs. going entirely without.

In the end, CHCs have been caring for the uninsured and underinsured, as well as undocumented patients, long before the ACA took effect. Action by local and national leadership is necessary to avert per capita or block grant subsidies from destabilizing these “essential care providers” who each day manage the mission critical work of caring for our nation’s most vulnerable people.


Download Healthcare Reform White Paper

1  CHCs are monitored/audited by the Bureau of Primary Health Care (BPHC) and the Health Resources & Services Administration (HRSA) never mind CMS scrutiny via claim analytics.


Get the Latest RCM News Delivered

Receive practical tips on medical billing and breaking news on RCM in your inbox.

Get in Touch