Presentation Transcript

1. American Health Lawyers AssociationPublic Health Systems Affinity Group

   WHAT EVERY PUBLIC HEALTH SYSTEM NEEDS TO KNOW ABOUT FEDERALLY QUALIFIED HEALTH CENTERSNovember 4, 2010

2. Presenters Sarah Churchill, General Counsel Lone Star Circle of Care Georgetown, Texas schurchill@lscctx.org William Dillon, Partner Messer, Caparello, & Self, P.A. Tallahassee, Florida wdillon@lawfla.com Sarah Mutinsky Ropes & Gray, LLP Washington, D.C. Sarah.Mutinsky@ropesgray.com
3. Overview of Presentation FQHC Basics FQHC Requirements Benefits of FQHC Status The Affordable Care Act and FQHCs Opportunities for Public Health Systems
4. What are FQHCs? Federally Qualified Health Centers (“FQHCs”) were first created in the 1960’s under Section 330 of the Public Health Service Act. The primary purpose of the legislation was to provide individuals living in medically underserved areas, including certain special populations, with access to preventative and primary health care services. FQHC programs are administered by the United States Department of Health and Human Services, Health Resources and Services Administration, Bureau of Primary Health Care.
5. FQHC Basics Section 330 Grant Supported FQHCs Privately run, not for profit corporations, that applied for and were awarded federal grant funding, or public entities (like County Health Departments) that were awarded federal grant funding. Includes several kinds of health centers: Community Health Centers Migrant Health Centers Healthcare for the Homeless Programs Public Housing Primary Care Programs FQHC Look-Alikes Certified as meeting the health center requirements and get enhanced reimbursements for Medicare & Medicaid, but do not receive federal operating grants, cannot be deemed under FTCA and are not protected by the anti-kickback safe harbor.
6. Selected FQHC Statistics National Funding: $16,359,252,378 (ARRA funding $2,000,000,000) Patients Treated 2008: Over 17 Million 3.1 million received dental services 678,000 received mental health services Source:http://bphc.hrsa.gov
7. FQHC Program Requirements To be designated as an FQHC, an organization must meet HRSA requirements in the following areas: Community need (and performance of needs assessment) Services Management and Finance, and Governance. Among the requirements in these areas, FQHCs must: Serve a federally designated health professional shortage area, medically underserved area, or medically underserved population; Provide primary health and supplemental services to all patients regardless of insurance status; (cont.)
8. FQHC Program Requirements (cont.) Establish a schedule of fees consistent with locally prevailing rates and designed to cover reasonable costs of operation, and provide discounts to patients based on ability to pay; Maintain an ongoing quality improvement system incorporating clinical services and management; and, Operate as a nonprofit corporation governed by a board of directors of which a majority of the directors are users of the health center. Other requirements related to accessibility, staffing, hours, etc. See HRSA website and Program Information Notices for full list of requirements
9. FQHC Program Service Requirements Ultimate responsibility of an FQHC is to provide, directly or through contract, primary health and supplemental services defined in their scope of services, such as: health services related to family medicine, internal medicine, pediatrics, obstetrics, or gynecology that are furnished by physicians and where appropriate, physician assistants, nurse practitioners, and nurse midwives; diagnostic laboratory and radiologic services; preventative health services; emergency medical services; (generally not the same as a hospital); pharmaceutical services; referrals to specialty providers; patient case management; enabling services, such as outreach and transportation; patient education.
10. FQHC Governance FQHCs must be governed by a Board of between 9 and 25 members, a majority whom are individuals who are consumers of the health center’s services. The consumer members should also “reasonably” represent the various populations served by the health center. Of the remaining board members, no more than 10% should derive their income from the health care industry. No board member, spouse or immediate family member may be an employee of the health center.
11. Board Functions and Responsibilities Establishing or approving personnel policies and procedures; Financial management procedures; Establishing eligibility for services including the sliding fee scale and minimum patient fee; Evaluating all center activities (patient satisfaction, QI, UR, etc); Corporate Compliance; Establishing health care policies including scope and availability of services, locations and hours of services. Approving the center's budget and 330 grant application; Approving the selection and dismissal of the executive director.
12. FQHC Governance The vast majority FQHCs nationwide are private, not for profit (501 (c)(3)), organizations. FQHCs are required to abide by applicable state law regarding business organizations in addition to federal law applicable to FQHCs. Federal – 42 U.S.C. 254b; 42 C.F.R. 51b FQHCs cannot be “owned, controlled, or operated by another entity Governance requirements in particular have proven a challenge for some public health systems.
13. Board Functions and Responsibilities Recognizing unique situation of public health systems, HRSA guidance established public entity co-application model Public entity establish a consumer-based board (typically incorporated as separate entity) Public entity and board jointly apply for FQHC status and collectively constitute the health center Public entity may share certain authorities with the consumer board, and may retain certain responsibilities within the co-applicant structure See PIN 99-09 for more information on Public Entity FQHCs (http://bphc.hrsa.gov/policy/pin9909.htm)
14. Additional Benefits of FQHC Status In addition to receiving federal grant funding, FQHCs are eligible to: Receive enhanced Medicare, Medicaid and CHIP payments Participate in the 340B Drug Program Receive FTCA coverage for certain professional liability related claims Receive access to workforce recruitment and retention assistance through the National Health Service Corps Except for NHSC funding, FQHC Look Alikes also qualify for these additional benefits
15. Enhanced Reimbursement for FQHCs State Medicaid programs must pay FQHCs a prospective per-visit payment rate based on 100% of the health center's average reasonable costs May be higher than rate paid to non-FQHC physicians FQHCs must comply with more rules/regulations; provide specific services; and provide care to the uninsured regardless of their ability to pay CHIPRA requires state to pay FQHCs comparable rates to Medicaid Medicare reimburses FQHCs at 80% of reasonable costs of services Subject to productivity screen and reimbursement cap
16. 340B Pharmacy Services FQHCs are eligible to participate in the 340B Discount Drug Program. Allows FQHCs (and other covered entities) to purchase pharmaceuticals at deeply discounted rates and make them available to eligible patients. FQHCs that participate in the 340B program must insure: That only receive discounts for drugs provided to eligible patients of the health center. That there are no duplicate discounts under both the Medicaid rebate program and 340B.
17. 340B Pharmacy Services Not all FQHCs offer in-house pharmacy services. To make the 340B benefit available, FQHCs are allowed to contract with private pharmacies. Subject to strict contracting requirements to insure that all 340B requirements are followed. See HRSA Pharmacy Services Support Center: http://pssc.aphanet.org/about/contractpharmacy.htm In addition to the federal 340B requirements, FQHCs utilizing a contract pharmacy arrangement should be mindful of complying with state law and obtaining the necessary permits from the appropriate state regulatory agency.
18. Federal Tort Claims Act One of the most important benefits available to FQHCs is the ability to take advantage of professional liability coverage under the Federal Tort Claims Act (“FTCA”). Pursuant to the Federally Supported Health Centers Assistance Acts of 1992 and 1995, FQHCs are eligible to be deemed as “federal” employees for professional liability purposes. Such coverage would also apply to the health center’s employees and certain contractors. Availability of FTCA coverage is subject to a number of very specific requirements. Failure to adhere to requirements could lead to the denial of coverage by the HHS OIG
19. FTCA Coverage Requirements FQHCs must apply and be deemed eligible for FTCA protection. To be deemed eligible the health center must demonstrate: That it has implemented appropriate risk management policies and procedures. That it adequately credentials its medical providers. That it will cooperate with DOJ and implement corrective measures to prevent future claims. That it will fully cooperate with DOJ with regard to previous claims history.
20. FTCA Coverage Once deemed eligible, FTCA coverage will extend to any officer, governing board member or employee of the CHC for any injuries or death related to the provision of health care services. FTCA will only cover situations in which the health care services were within the health center’s approved “scope of project”. Generally, scope of project indicates the specific services (pediatrics, internal medicine, etc) to be provided by the health center and the specific locations in which such services will be provided. Normally defined in the health center’s grant application and ultimately approved by HRSA.
21. FTCA Coverage Providing services “outside” of the scope of project could jeopardize FTCA coverage. E.g., if health center opens a new site and begins providing services prior to including new site in its scope of project may not be approved for FTCA coverage in the event of an adverse incident. To prevent a potential denial of coverage all arrangements with health center professional provider employees (physicians, ARNPs, PAs, dentists, etc) should be in the form of a written contract for services. The contract should clearly specify the scope of services to be provided.
22. FTCA Coverage Under certain circumstances FTCA coverage may be made available to independent contractors. Contractors working at least 32.5 hours per week. Contractors working less than 32.5 hours per week providing professional services in the fields of; family practice; general internal medicine; general pediatrics and obstetrics and gynecology. As with employed providers all arrangements should be document in writing. All contracts should be between the health center and the “individual” provider and not their “P.A.” or “LLC”.
23. FQHCs and Health Reform The Affordable Care Act includes significant new funding for FQHCs: $9.5 billion from FYs 2011-2015 for unspecified CHC program activities (§§ 10503, 2303) $1.5 billion from FYs 2011-2015 for construction and renovation of CHCs (§10503) Additional $34 billion authorized but not funded from FYs 2011-2015 for CHCs $50 million from FY 2010-2013 for school-based health centers 23
24. FQHC Rate Protection Under Reform Establishes a PPS for Medicare-covered services furnished by FQHCs beginning FY 2015 (§10501(i)) Based on cost per year in a base year, inflated Payments in first year 100% of estimated reasonable costs in the first year without PPS No cap or productivity screens Exchange plans must pay FQHC rates that are at least as high as payments to FQHCs under Medicaid (§1302) Plans must contract with Essential Community Providers 24
25. Other Opportunities for FQHCs Under Reform Teaching health center (THC) payments for costs of new or expanded primary care residency programs beginning, FY2011 $230 million appropriated for FYs 2011-2015 Eligible entities explicitly include FQHCs and Look Alikes, community mental health centers, and others Grants to start or expand THCs authorized but not funded Essential community provider contracting in Exchange Opportunity to participate in Community Based Collaborative Care Networks 25
26. Opportunities for Public Health Systems to Apply for FHQC Status Three primary options through which public entities may apply for FQHC status: Public entity co-application Affiliation with a Newly Established FQHC One of health system’s clinics apply for status Participation in establishing structure of the FQHC and consumer-based board Affiliation with an Existing FQHC Operate as a site of service of the FQHC 26
27. Ways to Collaborate with FQHCs ED Diversion Clinics Joint residency training programs OB models to counter increases in no doc deliveries Referral arrangements Integration of services of multiple providers (e.g., behavioral health) Purchase of services 27
28. Benefits of Collaborations, Affiliations, etc. Substantial cost savings associated with ER diversion clinics Potential benefits of 340B drug pricing HRSA may issue more restrictive patient definition FQHC ability to purchase services at a rate higher than FFS (but still FMV) FTCA coverage can create savings 28
29. Resource for Additional Information Additional information on FQHC operations may be found by accessing the HRSA/BPHC website at: http://bphc.hrsa.gov/ 29