How do Safety Net Clinics Pay for Social Care Programs?
As the evidence mounts demonstrating that social and economic circumstances shape health outcomes and costs, the healthcare sector is increasingly investing in activities to mitigate patients’ adverse social risks as a routine part of healthcare delivery. Hardly a day goes by without a new healthcare report or conference announcement that highlights the importance of addressing social context as a strategy for improving health and well-being. Many healthcare stakeholders—including providers, clinics, hospitals, health systems, and health plans—are now innovating at this intersection.
Though social determinants of health (SDOH) are now in vogue in new places within the US healthcare delivery sector, they have always been part of the mortar of the community health center movement. Community health centers were established in the 1960s as one of the War on Poverty programs. They now comprise a core part of the safety-net for low-income Medicaid and uninsured populations. Earlier work has emphasized the importance and extent of social care activities in the community health center context. To date, relatively little work has explored how health centers and other safety net clinics financially support these activities.
With support from the Center for Care Innovations, we undertook this project to better understand the innovative ways in which health centers and other safety net clinics braid different funding streams to implement and sustain SDOH-related programs. To do that, we interviewed over 30 experts from federal, state, and local levels, including from government, hospital and healthcare systems, non-medical community-based organizations, and health center leaders; interviewed leaders from four safety net clinics in diverse areas of the U.S. that are actively engaged in different kinds of social care programs; and reviewed the existing literature on health center financing.
We learned about the great variety of ways in which safety net clinic innovators initiate and sustain social care programs, as well as the many barriers they face in that work. They leverage funding in patient revenue streams, apply for a surprising number of time-limited grants, and are constantly on the lookout for non-traditional revenue-generating opportunities, like social enterprises. In this brief, we describe approaches that relate to Medicaid coverage and reimbursement and highlight the impressive range of grant proposals written and awarded.
In each report section, we also describe challenges of each financing strategy. The consequence of those challenges is that social care programs in health centers and other safety net clinics are regularly threatened with funding gaps and shortages. Funding received from patient revenue or grant sources is typically less than the degree of patient need. Often funds are restricted to special complex care populations or target age groups. Even when there is more flexibility, other obstacles arise related to grant cycles, grant duration, and funder preferences. The human and financial capital spent on identifying funding sources, writing grant proposals, and reporting activities to different funders strongly limit both initial program investments and program sustainability.
We hope that this report serves two purposes. First, for safety net clinic leaders, it may spark ideas about strategies to support existing or new programs. For policy-makers and advocates, it ideally also will shed light on ways to change the existing system so that safety net clinics can continue to provide the services that the evidence increasingly suggests are necessary to meet the needs of patients facing socioeconomic barriers to health. Ultimately, to improve the capacity of safety net providers to coordinate and deliver social care will require not only more funding but more funding stability. The most promising future sources of revenue lie in Medicaid-related programs—and new opportunities around value-based and risk-adjusted payments are likely to grow as CMS’ work develops in this area. In the meantime, safety net leaders hoping to expand social care services will need to continue leveraging the wide range of state innovations, existing value-based care opportunities, federal, state, and local government or private grants that have enabled them to initiate and sustain their social care programs to date.
Overview of article
- This report aims to achieve the following: 1) Spark ideas for safety net clinic leaders about strategies to support existing or new programs; and 2) Shed light on ways to change the existing system for policymakers and advocates so that safety net clinics can continue to provide the services needed to meet the needs of patients facing socioeconomic barriers to health
- Currently, safety net leaders hoping to expand social care services will need to continue leveraging the wide range of state innovations, existing value-based care opportunities, federal, state, and local government or private grants that have enabled them to initiate and sustain their social care programs to date
- Challenges using Federally Qualified Health Center (FQHC) payment to support SDOH-related activities: 1) Many states either have no defined process for scope of services rate adjustments or no clear definition for what constitutes a change in scope of services that would trigger rate adjustment; 2) Medicaid rules are state-dependent; 3) An FQHC PPS/APM rate can only be billed for certain provider-based visits; and 4) Any rate adjustment request could theoretically result in rate decrease, which can be a disincentive to requesting revisions
- Some state Medicaid programs offer Medicaid Targeted Case Management (TCM) programs, which safety net clinics can leverage to fund social care programs
- Challenges with TCM programs: 1) Requires a local match; matching rate between $.50 and $.90/dollar spent, though rates are higher for Medicaid expansion population in some states; 2) Not all counties participate in TCM claiming; 3) Administrative burden of time-based billing; 4) Claims can be denied; 5) Case management services are only offered to specific Medicaid populations; and 6) TCM does not cover the actual provision of services (e.g., legal services)
- Safety net clinics use Medicaid Administrative Claiming (MAC) as a strategy for hiring and supporting staff that provide a range of social services, which presents limitations: 1) Involves local tax or philanthropy dollars given to a certified public agency (which enables it be counted as a Certified Public Expenditure) to obtain federal match (matching rate of $.50 from federal sources/local dollar), though rates are higher for Medicaid expansion population in some states; 2) Administrative burden of time-based billing; 3) Claims can be denied or reduced during the state’s auditing process; and 4) Limited to select services for Medicaid or Medicaid-eligible clients
- In states that have established chronic care management (CCM) as a reimbursable Medicaid service, billing requires well-documented, moderate to high complexity medical decision-making and structured care planning for patients with at least 2 eligible chronic illnesses
- CCM limitations: 1) Requires explicit beneficiary consent documented in the record; 2) Only one practitioner can provide care coordination services in a given month; 3) There are very specific patient eligibility requirements; and 4) These services are not reimbursable in all state Medicaid programs
- Obtaining Patient-centered medical home (PCMH) status: PCMH certification can result in increased reimbursement or other incentive payments from select payers but also presents limitations: 1) Not all payers increase reimbursements or provide incentives based on PCMH status (e.g., Medicare or Medicaid patients); and 2) Despite the promise of increased revenue, some clinics invest more in PCMH than the ultimate financial return from added billing or incentive payments associated with PCMH status
- In the case of Oregon Coordinated Care Organizations flexible funding pools, where money is available to pay for onetime social needs or services, like a screen door, an air conditioner, or shoes
- To improve the capacity of safety net clinics to provide social care will require not only more funding but more funding stability. The most promising future sources of revenue lie in Medicaid-related programs—and new opportunities around value-based and risk-adjusted payments are likely to grow as CMS’ work develops in this area
- Those opportunities also open evaluation windows that can inform future social care investments. In the meantime, safety net clinics hoping to expand this work will need to continue leveraging the wide range of state innovations, existing value-based care opportunities, federal, state, and local government or private grants, and even social enterprises to initiate and sustain social care programs