Submitted on Wed, 2014-07-23
By Elizabeth Levy

At a time when community health centers are relied on more than ever, funding issues may cause their capacity to drop by more than 25% over the next five years.

What the 2015 Funding Cliff Means for Community Health Centers

The future well-being of community health centers is up in the air. Decisions from the federal and state governments are already hurting the centers’ ability to earn revenue, and future funding cuts could drop their capacity to serve from 25.6 million people in 2014 to 18.8 million in 2020. Some centers could even be shut down, cutting off vital access to primary care physicians for millions around the country.

The 1300 community health centers nationwide are estimated to serve 25.6 million patients this year and their patient base is expected to expand by 17% over the next few years. It makes the funding cuts all the harder to swallow.

At the state funding level, community health centers are losing out on Medicaid reimbursements. With 24 states opting out of Medicaid expansion, community health centers in those states are poised to lose $569 million in potential revenue in 2014. Since Medicaid makes up 39% of all community health center funding, it plays a huge role in whether or not the centers can continue to support the growth in their patient base. By 2020, it is estimated that uninsured patients will make up 20% of community health centers’ patient base if the remaining states expand Medicaid, but 30% if they do not expand.

community health center revenue sources

At the federal funding level, if mandatory funding provision in the Affordable Care Act is not renewed in 2015, there will be an even greater effect on community health centers and the patients they serve. The wing in funding between the two scenarios is dramatic. If the mandatory funding from the Affordable Care Act is not renewed, the capacity of community health centers will fall 25% to 18.8 million patients in 2020. If the funding is renewed and continues to grow at its current rate over the next 5 years, the capacity of community health centers could increase to more than 36.1 million patients a year by 2020.

These potential funding drops go against one of the main tenants of the Affordable Care Act: spending money on prevention to save money on the cure. Diverting funds from community health centers and local health departments takes money from prevention and will lead to more people having to rely on costly emergency services.

Working to preventable disease is more important than ever. American’s spend more than 2.7 trillion on healthcare services a year, and an estimated 75% of that goes towards treating chronic diseases that are preventable, such as diabetes and lung cancer. More than ⅔ of Americans are overweight or obese and ⅕ are smokers, with smoking still leading to more preventable deaths than anything else in the country.

The current number of smokers in high school is at a record low, and extreme childhood obesity rates are also falling, which goes to show the power local health departments and community health centers have when they have the funding for prevention. Removing their ability to continue could end years of positive momentum, and have a dramatic impact on the long-term health of the nation.

The continued growth of community health centers is critical to support the primary care infrastructure of the nation. If the government isn’t going to help keep its people safe with the appropriate amount of funding, community health centers need to take matters into their own hands and implement or optimize a billing program. Fewer people insured through Medicaid, and less funding means that a larger percentage of that funding must be used for uninsured patients. This makes it more important than ever to collect the reimbursements you can from those with insurance to keep your health center strong.

 

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About the Author

liz - claims management blog bio

Liz is passionate about utilizing technology as a means to improve local communities. With experience researching new markets for growth and product implementation, she aims to improve the public health sector through technological advancement and the creation of new revenue streams for state and local health departments across the country. You can contact Liz at elevy@upp.com.

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