Arkansas's community health centers are strong proponents of the private option plan for Medicaid expansion, but they have lodged some of the loudest complaints against one of the proposed federal waivers to enable the policy, saying they won't be reimbursed well enough to stay open.
With both Republican lawmakers and health-center leaders digging in their heels, the controversy has the potential to pose trouble for the implementation of the private option.
The state's 12 federally-qualified health centers (FQHCs), which operate 83 health center sites serving more than 160,000 patients, are reimbursed for Medicaid patients at a higher rate than other providers under what's known as the prospective payment system, or PPS. The enhanced reimbursement is necessary because the centers are required to offer services to all who come in the door, many of whom don't have any insurance at all.
The private option plan, which requires the waiver of certain federal rules to proceed, would expand coverage to more than 200,000 low-income Arkansans who do not currently qualify for Medicaid. The plan would use Medicaid funds to fully subsidize their purchase of private health insurance, paid for in full by the federal government for the next three years, with the state eventually picking up 10 percent of the tab. One of the proposed waivers drafted by the state Department of Human Services requests permission from the feds to let the private carriers negotiate their own reimbursement rates with the community health centers for this new expansion pool. These rates would likely be significantly lower than the enhanced PPS rate. The centers would continue to get the PPS rate for existing Medicaid eligibles and for the medically frail, who will go to the traditional Medicaid program rather than the private option.
"We want to let the private market work on its own, and let the private carriers pay the private-carrier rates," DHS spokeswoman Amy Webb said. "We want to be consistent across the board. We don't want to be making exceptions. ... The bottom line is we don't want to be telling private insurance carriers who they have to contract with and how much they have to pay those providers. That's for the carriers to work out."
The reimbursement waiver is "really critical," said Rep. John Burris (R-Harrison), one of the key Republicans behind the expansion plan. "It goes straight to the heart of the private option."
Located in underserved areas, federally qualified health centers offer comprehensive primary and preventative care, and by law must offer their full range of services to anyone who walks in the door, regardless of insurance status or ability to pay. The FQHCs charge a sliding-scale fee based on income. They offer coordinated and holistic care using a "patient-centered medical home" model, said Sip Mouden, chief executive officer of the Community Health Centers of Arkansas, and they provide services that are in many cases more extensive than the plans on the marketplace will be required to provide. "We take exception to trying to be put inside of a box to look like everybody else when we're not," she said. "Our model of care, our provision of services, is different."
Currently 40 percent of the state's FQHC patients are uninsured and another 28 percent are on Medicaid. Because of their unique mandate to serve everyone regardless of ability to pay, the centers receive federal grants to help cover the cost of treating the uninsured (as well as funds from state general revenue). Congress created the special enhanced reimbursement rate for the FQHCs because Medicaid rates weren't covering the cost of treating Medicaid patients, and the centers can't shift the money allotted to covering the uninsured to subsidize Medicaid patients. According to Mouden, even with the enhanced rate, the average reimbursement for FQHCs is just 80 cents for every dollar in cost.
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