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Society asks for removal of reimbursement cuts to federally qualified health centers

The Wisconsin Medical Society was one of several stakeholders that signed on to a letter this week asking the state’s powerful Joint Finance Committee to remove a proposal in the Governor’s budget that would cut funding for federally qualified health centers (FQHC).

The budget proposal seeks to change to the methodology currently used to pay FQHCs for Medicaid services. Specifically, the change would be to pay all FQHCs the federally allowable minimum—the Prospective Payment System (PPS) rate—instead of the Alternative Payment Methodology (APM) rate, which reimburses clinics at 100 percent of reasonable costs with limits on overhead. The APM rate has been the payment methodology for health centers in Wisconsin since 2001. Estimates predict that the switch to a PPS rate would mean that health centers would be paid $28.8 million less over a three-year period.

The Society is concerned that the proposal will not yield the projected cost savings, it will have an abrupt and dramatic change on FQHCs’ business model, and could actually cost more if, as the data suggests, a cut to programs and services at FQHCs would lead to increased emergency department (ED) use and higher costs.

Serving one in seven Medicaid beneficiaries, FQHCs play a critical, cost-effective role in providing health and dental care to some of Wisconsin’s most vulnerable residents. An April 2014 study by the Society referenced in the sign-on letter showed that community health centers helped decrease over utilization of non-traumatic dental ED visits in the nine rural Wisconsin communities where community health centers (CHC) have been offering oral health services. Additionally, data from the Wisconsin Health Information Organization (WHIO) showed that across Medicaid, CHC patients who are admitted to the hospital on average stay 2.6 days, compared to the 4.4 day average for non-community health center Medicaid providers.

The Society and its partners in this effort will work to have the proposal removed from the budget as the item is taken up in May before the Joint Finance Committee.

If you have questions, contact Chris Rasch in the Society’s Department of Government and Legal Affairs.

Back to May 14, 2015 Medigram