Community Health Centers Ask For Federal Increase to Keep up with Costs and Inflation


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Community Health Centers are saying that a lack of reimbursement from the federal Center for Medicare and Medicaid Services coupled with increased inflationary costs are pushing them to a budgetary breaking point.  

Nichelle Mullins, the executive director of Charter Oak Community Health Center in Bridgeport, said that, on average, Charter Oak loses $41 for each medical visit, $79 for each behavioral health visit and $222 for each dental visit, leaving them with an annual shortfall of about $2.5 million. 

Not having the money to cover services, Mullins said, has affected Charter Oak’s ability to hire staff and pay for supplies. She said that the recent healthcare staffing shortage means the center is competing with the hospitals, which can afford to pay more than the health centers can.  

“Prior to the pandemic, we were all competing for providers and MDs. Now the hospitals are competing with us for [Community Health Workers] and front desk staff and billers and administrative assistants,” said Mullins. 

She also said that the cost of supplies has gone up. 

“Gloves are more, masks are more, software prices cost more,” said Mullins. “So when you don’t get increases and you have to rely on the government to give you increases, then it starts to take a toll on your ability to provide services.” 

Federally Qualified Health Centers, which were originally established in the 1970s as part of President Lyndon Johnson’s War on Poverty, were created as sites where people living in low-income communities could seek out healthcare. Connecticut has 16 community healthcare organizations. In 2020, Connecticut’s community health centers saw nearly 375,000 patients, according to statistics from the National Association of Community Health Centers. 

But Katherine Yacavone, interim CEO of the Community Health Center Association of Connecticut, which oversees 16 health centers across the state, said that the state Department of Social Services has not reimbursed the centers the full cost of medical and dental services – instead either denying the centers’ requests for higher rates or opting to “negotiate” for lower rates when the centers have a change in the services they provide. 

“You’re desperate for the money,” said Yacavone. “So of course you’re going to agree, because you need every dollar — which is ridiculous.”  

Hospitals can charge more to individuals with private insurance to compensate for any losses from Medicare or Medicaid but that option is not available to Community Health Centers because the majority of the population they serve cannot afford private insurance. 

According to Mullins, between 62 and 67 percent of her patients are on Medicaid. Another 20 percent are uninsured – a group from whom the health centers receive, in effect, no reimbursement at all.

“We will get whatever they pay out of pocket, and most of the time we end up having to just write it off as, like, charity care,” said Mullins. 

Yacavone said that collectively her 16 centers are losing $43 million annually. She said there is one other community health center in the state and estimated that the yearly shortfall for all 17 community health centers was upwards of $60 million last year. 

The Community Health Centers have asked the state to provide $30 million in one-time funding to address the centers’ immediate needs. 

On Tuesday, the Human Services Committee heard a proposed bill that would require the Department of Social Services to reimburse Federally Qualified Health Centers at an amount equal to what it costs them to provide care. However, the department said in testimony that the federal guidelines require paying health centers an amount based on the average cost of care in 1999 and 2000, adjusted annually for inflation. 

“This bill is in direct conflict with not only federal regulation regarding [Federally Qualified Health Centers’] reimbursement methods, but also risks the loss of federal match [of state funding for the health centers],” the testimony read. 

But health center CEOs testified that the inflation adjustment, which averages about one percent, is not adequate to keep up with the actual rise in costs. 

“In 20 years, with increased technology, increased staff, increased salaries, an annual inflation factor of one percent is woefully inadequate,” Suzanne Lagarde, CEO of Fair Haven Community Health Care, told the legislature. 

Under federal law, reimbursement rates can be adjusted if the health centers change the services they offer, known as a “change in scope” request. But health center leaders said that the Department of Social Services routinely denies, or gives only nominal increases, to health centers that request a change. 

Lagarde said that Fair Haven was denied an increase both in 2016 and 2019 and received a bump in their rates only after going to arbitration. During the arbitration, the panel of two judges and a former attorney found that the department had used criteria other than what was outlined in federal guidelines. They ordered the department to reconsider their decision. 

Lagarde and other health center leaders said they weren’t necessarily in support of the bill that the legislature was proposing.  Lagarde said she wasn’t sure the bill would be legally possible, given federal regulations but that it was “welcome news” that legislators were considering the health centers. She added that the department needed to have a clear methodology for determining rate changes. 

“Currently, [the Department of Social Services] has no methodology. Their methodology is to say no,” Lagarde told legislators.

The Department of Social Services did not respond to a question from CT Examiner about the department having denied rate changes for the Community Health Centers. 

Mullins said that Charter Oak is able to procure some money from the federal 340b pharmacy program, but the rest of the needed funds come from either asking their federal delegation for money or being “creative” about how the center uses the funds it has. 

“You rob Peter to pay Paul, so you have to kind of figure it out on a monthly basis, which makes our jobs very hard,” said Mullins. “We might have to not fill these open salary positions. Right. Or we can’t do incentives or bonuses. Or we’ve got to figure out how to be more productive or increase our revenue.”

Editor’s note: Katherine Yacavone is the Interim CEO of the Community Health Center Association of Connecticut, which has 16 member centers located across the state rather than solely the Fairfield County area. She was formerly CEO of Southwest Community Health Center. Yacavone said the yearly shortfall for all 17 community health centers in the state was upwards of $60 million last year, not $65 million. This story has been corrected.

Emilia Otte

Emilia Otte covers health and education for the Connecticut Examiner. In 2022 Otte was awarded "Rookie of the Year," by the New England Newspaper & Press Association.