Community health centers tell lawmakers of concerns about reimbursement change


LITTLE ROCK — Representatives of community health centers across the state told lawmakers Thursday that a proposed federal waiver drafted by the state Department of Human Services would reduce the centers’ reimbursement rates and could force some to close their doors.

Testifying at a joint meeting of the House and Senate committees on public health, welfare and labor, the representatives of the centers said they objected to a proposed waiver that would allow insurance companies to negotiate reimbursement rates with the centers.

Similar concerns were raised previously in public hearings on the private option, which is the state’s plan to subsidize the purchase of private insurance for as many as 250,000 of Arkansas’ working poor through the new insurance exchange. The federal government would pay 100 percent of the cost for the first three years, after which the state’s share of the cost would increase gradually to 10 percent.

DHS has proposed a number of waivers related to the private option, which still needs federal approval. Community health centers are concerned that the waiver concerning their reimbursement rates would lead to lower rates than they receive under the existing Prospective Payment System, or PPS. The existing rates are higher than Medicaid rates because the centers have to serve all who seek treatment, many of whom are uninsured.

Sip Mouden, CEO of Community Health Centers of Arkansas, told the legislative panel Thursday that the 12 federally qualified community health centers in Arkansas provide primary medical, dental and mental health and preventive services to nearly 165,000 people in medically underserved areas. She said the centers support the private option but oppose the waiver regarding the centers’ payment rates.

Allan Nichols, CEO of Mainline Health Systems in southeastern Arkansas, testified that of the six centers in that system, two likely would have to close if reimbursements were to drop.

“We’re very fragile. We’re nonprofits with very, very thin margins that cannot sustain bumps in the road,” he said.

Sen. Missy Irvin, R-Mountain View, said the private option will increase the number of Arkansans with health insurance, which should increase continuity of care for people in the areas served by the community health centers and give them greater access to other health care providers.

Regarding the fragility of the centers, Irvin said that “there are businesses in the state that are fragile.”

“Welcome to the private-pay world,” she said.

Sen. Stephanie Flowers, D-Pine Bluff, objected to the comparison of the centers to businesses.

“I’m from a place where we consider health care a public service,” she said. “It’s not a business. The doctors I’ve known in my lifetime, including those in my family, consider it a service.”

Nichols testified that patients would not necessarily have greater access to physicians under the private option.

“If you come to where I’m at — and I can speak only to southeast Arkansas — there is no private practice physician,” he said. “Where we’re at, we’re it. We’re health care. I have people with private insurance sitting beside Medicaid (recipients) sitting beside millionaires. They’re all in one room because we are it.”

Rep. Reginald Murdock, D-Marianna, said he believed DHS should reconsider requesting the waiver.

“I don’t have a problem with the private option as long as it does not forget the unique populations,” he said. “We have some unique populations where people don’t have access, people are underserved and … doctors won’t go.”

DHS Director John Selig said the agency drafted the waiver in an effort to be consistent with the intent of the Legislature in approving the private option.

“We said we’re going to treat everybody the same, in terms of being paid privately,” he said.

Selig said the most sick patients of the centers would be considered medically frail and would remain on Medicaid, so the reimbursement rates for their treatment would not change. He also said that because the centers often are the only health care providers in their area, they should be in a good position to negotiate reasonable rates with insurance companies.

“We think there are a number of factors in there that will keep them whole,” Selig said. “But the governor has also said … he does not want to see undue harm to the community health centers, and he’s asked to talk with them about ways to protect them, create some kind of fund or something where if it did look like they were being hurt we could quickly come in and keep undue harm from happening.”

DHS plans to submit the applications for its proposed waivers to the federal government on Aug. 2 and hopes to receive an answer before Oct. 1, when the insurance exchange begins operating.

Nearly all Americans are required under the federal Affordable Care Act to have health insurance beginning Jan. 1.