ACOs and Federally Qualified Health Centers: A Lost Opportunity to Transform the Health Care of America’s Most Needy?

As our Nation struggles with the troublesome duet of embarrassingly poor health outcomes and seemingly unstoppable escalations in health care costs, a model has emerged with promise to blaze our way out of this quagmire. And unlike many other advancements in medicine, the first beneficiaries of this model are America’s most needy residents. The model, the Federally Qualified Community Health Center, incorporates almost every aspect of what health care experts believe are the fundamental characteristics of an advanced model of health care organization. Strangely, unless action is taken immediately, that model will be overrun by the implementation of Accountable Care Organizations – or ACOs – when ACOs have been developed to accomplish many of the same goals. Here’s what is happening…..

The Medicare regulations for ACOs were released on March 31, 2011 in draft for public comment. In brief, ACOs are meant to establish a financing system where payment enhancements are made to the ACO, and then to the providers, based on achieving specific health care outcomes and reducing (or in some cases stopping the escalation of) health care costs. This is achieved by assigning patients to ACOs based on their historical place of care and assigning cost predictions based on their historical utilization of health services and other health-related characteristics. So everyone – or almost everyone – wants to be an ACO so they can get the financial rewards from their efforts to improve care for their patients and reduce overall health care costs. In New York City, hospitals, medical groups and FQHCs have been planning their ACO strategy since the legislation outlining the goal of ACOs was passed last year in the health reform bill. Yet to the shock of the FQHC community, they were determined, along with Rural Health Centers (RHCs) and some others, to be ineligible to sponsor an ACO.

The implications of this will have enormous, negative impact on the future of FQHCs. To understand this, one needs to envision the advanced model that FQHCs have been developing over the past decade. To start with, they are governed – not just advised – by a board of directors that is made up of a majority of the health centers users. They are built in the community, governed by the community and therefore, serve as a model of how health care providers must be responsive to the needs of those they care for. They have been early adopters of electronic medical records, have been achieving certification as Medical Homes at a blinding rate (the highest recognition a primary care provider can achieve today). They have expanded hours to expand access, provide multilingual care where appropriate, and often integrate chronic disease management, mental health and dental services in one location. They engage networks of specialists to care for their patients – even though 1/3 of the patients they serve nationally lack health insurance. In short, they are the model for what everyone in the U.S. needs. So what is the issue?

ACOs will control the flow of funds for improved care and reduced costs and to insure that the benefits of these added payments accrue to those who have invested in the formation of advanced delivery systems, they must be in a position to control the distribution of these funds. We have always said that a rational system of care is built around a strong foundation of primary care – the FQHC. With hospitals and multispecialty groups in control, the same power relationships that exist now will exist in the future and what is worse – the same model of care and the same catastrophic economic results. We cannot afford to let this happen. The main question at stake here is whether we want hospital controlled ACOs sitting at the center of these new models, struggling to make up for the falling volumes of high-cost services they provide by fighting over market share with other hospitals, whether we want multispecialty group practices at the center of the ACO model with their frequent overrepresentation of specialists and underrepresentation of primary care or whether we want primary care as the ACO’s core – providing a rationally constructed system where the training of primary care practitioners in preventive care, care coordination and chronic disease management provides the foundation for improving quality and reducing cost. We all know what we need to do!

The elimination of FQHCs from the list of eligible ACO sponsors seems to result from a technical issue but it is hard to imagine that a technical work-around could not have been developed by CMS before the release of the draft regulations. The technical problem is that FQHCs are required by CMS to bill Medicare differently than practitioners in private practices bill. FQHCs do not use HCPCS codes to indicate the type and level of procedure done and they do not indicate the specific doctor who saw the patient as the claim form has only a place to indicate the clinic provider number. Because of this historical method, CMS claims the inability to collect baseline data back 3 years as they propose to do and the inability to attribute care to an individual provider. But for those FQHCs that choose to sponsor an ACO, this data is retrievable through a review of the medical records that contain this information. For those on electronic health records, this data could be extracted electronically. For those whose records are still on paper, a sampling methodology could be developed. Claims could be reprocessed for qualifying Medicare patients – those that CMS tells the center might be a candidate for an ACO by virtue of the FQHC providing a plurality of visits to the individual patient. The reprocessing would not effect payment but merely provide the needed baseline data for these patients. I am sure there are other solutions as well – and they need to be developed now.

The country needs FQHC’s as the sponsor and integrator of ACOs – especially as more uninsured patients achieve coverage through health reform in the ensuing years. ACOs sponsored by FQHCs would be based in a system with the most sophisticated primary care delivered in a fashion that by its very nature treats patients in order to improve their health outcomes and reduce their costs of care. We need to advocate quickly and powerfully that FQHCs be included as potential leaders of ACOs, in a position to insure that the distribution of funds through the proposed shared savings models is done in a manner that preferentially supports primary care.