Tag Archives: FQHCs

Telemedicine and the unstated reason it can save money for Federally Qualified Health Centers (FQHCs) and other providers

You may have read that Walgreens is is shuttering some of its in-store clinic, because the clinics are expensive to operate and, in addition, telemedicine services are taking off. Telemedicine competes with minute clinics, urgent cares, and some primary care offices; right now telemedicine is being vended through a variety of platforms, some of them independent of traditional medical providers (Teledoc is a relatively famous one), while others are affiliated with traditional providers, like FQHCs. The most interesting aspect of telemedicine services might be the one, unstated reason why they’re popular.

The official push towards telemedicine is justified by greater convenience and lower cost. So far, so good: those things are real, as is the nominal improvement in patient satisfaction, but the hidden reason is also revealing: a lot of in-person medical visits aren’t medically necessary and are generated by non-medical desires. Robin Hanson and Kevin Simler talk about this in The Elephant in the Brain: Chapter 13 describes how a lot of medicine seems to be generated by patients wanting reassurance from high-status people (doctors) and doctors wanting to enjoy the status that comes from people seeking out their expert knowledge. To be sure, “a lot of medicine” is not the same as “all medicine,” so you need not leave comments about broken bones being mended or cancers being treated.

A lot of medical office visits are costly for patient and doctor, so telemedicine can reduce the waste. In effect, telemedicine often ends up being triage: the distant provider tries to figure out whether something is genuinely wrong with the patient, and whether that thing needs to be seen in person. Almost all primary care providers have seen lots of patients who come in more for hand holding and an encounter with a sage doc than treatment of underlying condition. I haven’t seen studies describing exactly how many medical visits are really boredom, fear, craziness, improbable uncertainty, and the like, but anecdotally it seems to be high, and Hanson and Simler cite estimates in the 20 – 50% range. This is the sort of thing most of your healthcare provider friends won’t admit to strangers or acquaintances, but they may admit it to close friends or after a couple drinks. FQHC CEOs, who we work for, will sometimes admit this to us, their trusted grant writers (in our own way, we are the “trusted sages” in these conversations, reversing the roles).

So telemedicine can save money because it lets people with common colds, loneliness, and similar real or imagined ailments have a doctor, nurse practitioner, or physicians assistant tell them that they’re okay, bill them maybe less than they’d be billed for an in-person office visit, and then the provider can hang up and talk to another person who is also likely okay. Many people with chronic conditions also just need reassurance, direction to a specialist, or a prescription refilled. That can be done in a few minutes over the phone or via a videoconference. Because it’s socially undesirable and even unacceptable to admit that a lot of medicine is not what we typically think it’s about, not much can be done to substantially improve the system at current levels of technology, but offering telemedicine can be an improvement. HRSA has noticed something like this and is now pushing for FQHCs to offer telemedicine. Healthcare now consumed about 18% of GDP, in a $20 trillion economy, or about $3.7 trillion dollars. There’s enormous pressure on almost every player to try and lower costs as a consequence of these unbelievable numbers. One way or another, the average worker is paying about one in every five dollars earned into medicine—whether that dollar is paid to insurance companies, hospitals, or levels of government via taxes. Strangely, though, regulators are letting hospitals merge and form local monopolies and oligopolies, which is an important exception to the lower-cost trend. Telehealth, however, is right on trend.

Funders sometimes force grantees to provide services they don’t want to: FQHCs and Medication Assisted Treatment (MAT)

We often remind clients that those with the gold make the rules. Accepting a government grant means the applicant must sign a grant agreement, in which the applicant agrees not only to provide wherever services were specified in the proposal, but also abide by a myriad of regulations and laws. While many applicants will tussle with a funder over the budget, there’s rarely any point in trying to modify the boiler plate agreement—just like one can’t modify Apple or Facebook’s Terms of Service.

In addition to the specific terms of the grant agreement, grantees quickly become subject to other influences from the funder—when the Godfather makes you an offer you can’t refuse, you know that eventually you’ll be told to do something you’d otherwise not much want to do. While a federal agency is unlikely to place a horse’s head in a nonprofit Executive Director’s bed, the grantee might end up having to provide an unpalatable service.

A case in point is HRSA’s relatively recent (and divisive) endorsement of Medication Assisted Treatment (MAT) for treating opioid use disorder (OUD). Since HRSA is the primary FQHC funder, it is essentially their Godfather and has great influence over FQHCs. In the past few years, HRSA has strongly encouraged FQHCs to provide MAT. The CEOs of our FQHC clients have told us about HRSA pressure to start offering MAT. It seems that, even after several years of cajoling, only about half of our FQHC clients provide MAT, and, for many of these, MAT is only nominally offered. Other clients see offering MAT as a moral imperative, and we’ll sometimes get off the phone with one client who hates MAT and then on the phone with another client who sees not providing MAT as cruel.

“MAT” generically refers to the use of medications, usually in combination with counseling and behavioral therapies, for the treatment of substance use disorders (SUD). For OUD, this usually means prescribing and monitoring a medication like Suboxone, in which the active ingredients are buprenorphine and naloxone. While Suboxone typically reduces the cravings of people with OUD for prescribed and street opioids (e.g., oxycontin, heroin, etc.), it is itself a synthetic opioid. While MAT replaces a “bad opioid” with a “good opioid,” the patient remains addicted. Many FQHC managers and clinicians object to offering MAT for OUD, for a variety of medical, ethical, and practical reasons:

  • Like its older cousin methadone, as an opioid, Suboxone can produce euphoria and induce dependency, although its effects are milder. Still, it’s possible to overdose on Suboxone, particularly when combined with alcohol and street drugs. So it can still be deadly.
  • While MAT is supposed to be combined with some form of talking or other therapy, few FQHCs have the resources to actually provide extensive individual or group therapy, so the reality is that FQHC MAT patients will likely need Suboxone prescribed over the long term, leaving them effectively addicted. We’re aware that there’s often a wide gap here between the real world and the proposal world.
  • Unless it’s combined with some kind talking therapy that proves effective, MAT is not a short-term approach, meaning that, once an FQHC physician starts a patient on Suboxone, the patient is likely to need the prescription over a very long time—perhaps for the rest of their life. This makes the patient not only dependent on Suboxone, but also dependent on the prescriber and the FQHC, since few other local providers are likely to accept the patient and have clinicians who have obtained the necessary waiver to prescribe it. Suboxone users must be regularly monitored and seen by their prescriber, making for frequent health center visits.
  • As noted above, prescribed Suboxone can, and is often, re-sold by patients on the street.
  • Lastly, but perhaps most importantly, most FQHC health centers prefer to look like a standard group practice facility with a single waiting room/reception area. Unlike a specialized methadone or other addiction clinic, FQHC patients of all kinds are jumbled together. That means a mom bringing her five-year old in for a school physical could end up sitting between a couple of MAT users, who may look a little wild-eyed and ragged, making her and her kid uncomfortable. Since FQHCs usually lack the resources for anything beyond minor paint-up/fix up repairs, there is simply no way around this potential conflict.

Given the above, many FQHC CEOs remain resistant to adding the challenges of MAT to the many struggles they already face. Still, the ongoing pressure from HRSA means that most FQHCs will eventually be forced to provide at least a nominal MAT program to keep their HRSA Program Officer at bay. The tension between a typical mom and her five-year old against a full-fledged behavioral and mental health program is likely to remain, however. Before you leave scorching comments, however, remember that we’re trying to describe some of the real-world trade-offs here, not prescribe a course of action. What people really want in the physical space they occupy and what they say they want in the abstract are often quite different. You can see this in the relentless noise around issues like homeless service centers; everyone is in favor of them in someone else’s neighborhood and against them in their own neighborhood. Always pay attention to what a person actually does over a person’s rhetoric.

Washington Post’s story on rural health care ignores Federally Qualified Health Centers (FQHCs) — huh?

Eli Saslow recently wrote a 3,500-word Washington Post story about rural healthcare in “Urgent needs from head to toe’: This clinic had two days to fix a lifetime of needs.” Although it reads like a dispatch from Doctors Without Borders in Botswana, Saslow is describing rural Meigs County TN. Rural America certainly faces significant unmet healthcare needs, but this piece has a strange omission: it doesn’t mention Federally Qualified Health Centers (FQHCs).

The Tennessee Primary Care Association reports over 30 Federally Qualified Health Centers (FQHCs) operating over 200 health clinics in the state, most in rural areas—including at least four in or near Meigs County! FQHCs are nonprofits that receive HRSA Section 330 grants to provide integrated primary care, dental care, and behavioral health services to low-income and uninsured patients. FQHCs also accept Medicaid and, in rural areas, are usually the main primary care providers, along with ERs.

Federal law requires FQHCs to provide services under a sliding-fee scale, with a nominal charge for very-low-income patients—in theory, at least, FQHCs never turn patients away due to lack of ability to pay. Similarly, federal law requires ERs to treat everyone, regardless of income and/or insurance status. Unlike ERs, however, FQHCs provide a “medical home” for patients. There are over 1,400 FQHCs, with thousands of sites, both fixed and mobile, to better reach isolated rural areas like Meigs County. We should know—we’ve written dozens of funded HRSA grants for FQHCs, including many serving rural areas like Meigs County.

The story’s hero is Rural Area Medical (RAM), a nonprofit that appears to set up temporary clinics under the free clinic model. Free clinics emerged from the runaway youth health crisis of the late 60s, starting in the Summer of Love in San Francisco—I was on the board of a free clinic over 40 years ago and understand the model well. While there are still over 1,400 official free clinic sites, free clinics largely depend on volunteer medical staff, may not accept Medicaid, and have insecure funding because they rely on donations (often from their volunteers) to keep the lights on. To operate, a free clinic must necessarily devote much of its resources away from direct services to maintaining volunteers and fundraising, like any nonprofit that depends on volunteer labor (think Habitat for Humanity).

Unlike FQHCs, free clinics patients don’t have a designated primary care provider (PCP), since a given doc or NP might be volunteering or not on a given day—like an ER, free clinic patients lack a true medical home. Free clinics aren’t generally eligible to participate in the federally subsidized 340B Discount Pharmacy Program, so patients don’t have access to long-term, low-cost medications. Free clinics, while once the only source of healthcare for many uninsured, have now mostly been overtaken by FQHCs, much as the days of the independent tutor ended with the coming of public schools. We’ve worked for a few free clinics over the years, and most were struggling to stay open and provided erratic services. Their executive directors could feel which way the wind is blowing and consequently many were trying trying to become FQHCs.

I wonder: has RAM applied to become an FQHC and open a permanent site in Meigs County? I don’t know anything about Meigs County, and it’s possible that the local FQHCs are incompetent or poorly run and could use some new competitors. HRSA just had a New Access Points (NAP) competition, with over $200 million to found and fund new sites. If the the healthcare situation is dire in Meigs County, applying for NAP grant makes much more sense than setting up shop for a weekend. Does RAM refer patients to local FQHCs? That may be a more efficacious long-term solution than the superman approach of flying in, saving the day, and flying out (imagine if education worked the same way, with itinerant teachers stopping by to give a lecture on geometry one day, Shakespeare’s sonnets the next, and the gall bladder the day after).

The original story is great as human interest, but it doesn’t go into root causes. Some consulting organization created the “Five Whys” strategy or methodology, which holds that, for any given problem, it’s often not useful to look at a single moment or cause of failure or inadequacy. Rather, systems enable failure, and for any given failure, it’s necessary to look deeper than the immediate event. Some of the other underlying problems in this story include the American Medical Association (AMA), which controls med school slots, and the individual medical specialty associations, which control residency slots. The U.S. has been training too few doctors and doing an inadequate job getting those doctors into residency for decades. Detail on this subject is too specific for this piece, but Ezekiel Emanuel has a good article on the subject; med school needs to be integrated with undergrad and needs a year lopped off it. The way medical training works right now is too expensive and too long, creating physician shortages—especially in the places that need physicians most. The supply-demand mismatch raises the costs of physician services and mean that physicians charge more for services than they otherwise would.

Rural areas have also faced decades of economic headwinds, with young adults moving to job centers, leaving an aging-in-place population that needs many support services; declining tax base from manufacturing leaving for emerging countries; the opioid epidemic; and so on. While I wouldn’t expect Saslow to fully cover such factors, context is missing and at least a passing reference to FQHCs would make sense.

“Health insurance security” and FQHCs

I hesitate to post this, because it’s a bit more political than the topics we typically cover, but it’s explanatory more than partisan: “The 2018 Elections Were Not About Obamacare–They Were About Health Insurance Security.” In it, Bob Laszewski describes how “In March of 2016, there were 20.2 million people covered in the individual health insurance market,” but by “March of 2018 the count was 15.7 million.” Why? Because individual market “premiums and deductibles are sky high–for all but the lowest income participants.” Consider this data:

In Northern Virginia, for example, the cheapest 2019 Obamacare individual market Silver plan for a family of four (mom and dad age-40) making a subsidy eligible $65,000 a year costs $4,514. That plan has a $6,500 deductible meaning the family would have to spend $11,014 on eligible health care costs before collecting other than nominal first dollar benefits.

That same family, but making too much for a subsidy, as 40% of families do, and a typical family in the affluent Virginia 10th, would have to spend $19,484 in premiums plus a $6,500 deductible, for a total of $25,984 in eligible costs before they would collect any meaningful benefits.

Those are shocking numbers, no? Yet we rarely see them, or numbers like them, in the larger media landscape. Many people have individual experiences of such things, including me; I’m covered by a small group employer plan, not an individual market plan, but my own deductible is now about $5,000. Two years ago, it was $4,500, and when I had a minor procedure to fix a toe I’d dropped a pan on, I spent $4,500 out of pocket almost immediately. Not only that, but when I saw podiatrists to get fee quotes on the procedure, most could not or would not give them to me. Even people who say they want to pay in cash often cannot find out how much a particular service will cost. When I inquired about the price of an office visit, most receptionists were confused but could eventually get an answer, and prices varied hugely, from as little as $40 to as much as $350. Why? I don’t know.

Oh, and the podiatrist billed my insurance for something like $12,000, beyond the $4,500 I paid, and she got $900 out of the insurance company. So her net benefit from the procedure was $4,500 in cash (from me) plus $900 from the insurance company. It is almost impossible to read this paragraph and not think, “Something is horribly wrong here.”

And I am not alone: almost anyone not covered by a very large employer plan, Medicaid, or Medicare has had similar experiences.

There is also an absurdly common misconception among normal people: that “insurance” is what matters for healthcare. Insurance is only part of the puzzle, but “insurance” is only as good as the healthcare we can access with it. Many doctors, for example, don’t accept Medicaid patients. So someone on Medicaid who counts as “having insurance” may not have access to care. Laszewski points out that many people “have insurance” (which is fine), but if the insurance never kicks in for the average person, then it is not functioning like true insurance, but not as the pay-all system that health insurance means to most Americans.

Federally Qualified Health Centers (FQHCs), which are federally funded nonprofits, have supersized in part because of the strange path of the US healthcare markets. Either by accident or design, FQHCs have become the default Medicaid providers in many parts of the country at the same time that the ACA significantly expanded Medicaid eligibility. Policy wonks in DC, along with some politicians, know that “insurance” is not the same as “health care” (as I myself said above). Even if politicians don’t know that, many of their constituents and voters who are on Medicaid know it. FQHCs are a partial solution, because they accept Medicaid patients and self-pays on sliding fee scales. FQHCs have also become front-line purveyors of Patient Navigation services (which link patients with Medicaid or ACA plans). Still, FQHCs usually do not have enough slots for everyone who seeks care, and waits can be long; FQHCs also often have trouble recruiting clinicians and in particular specialties like OB/GYN and psychiatrist.*

So the convoluted and intertwined health insurance and care access problems remain; the present situation likely cannot hold forever; and I do not know what will happen, politically speaking. But I would surmise that, if a family of four making $65,000 a year must pay $10,000 or more in true costs for healthcare before some manner of insurance kicks in, something has to give.

Single-payer is popular in some American political circles, though it’s not my preferred outcome and seems unfeasible financially; I’d rather see price transparency and mandatory health savings accounts coupled with true insurance for catastrophic care. Unfortunately, no one but me and a handful of healthcare wonks desire this outcome, or something adjacent. It’s hard to explain in a soundbite and normal voters have no idea what “price transparency and mandatory health savings accounts coupled with true insurance for catastrophic care” means. It doesn’t map well onto political ideologies. In healthcare, no one wants to talk about or admit to trade-offs. We write many grant proposals for FQHCs, but we never mention trade-offs. Seliger + Associates is a grant writing firm, so we’re firmly in the proposal world. All FQHCs should be in the proposal world when writing HRSA or SAMHSA or foundation applications. In the real world, however, just saying it’s so, doesn’t make it so. Trade-offs are real and pervasive. It may be socially undesirable to acknowledge them, but they are real.

The most likely political outcome will be more kludges on top of existing kludges. Fortunately, “price transparency” would fit this general paradigm. Unfortunately, there seems to be no political constituency for it. I cannot say what will happen next. I did not think Obamacare would happen, and I was wrong about that. I also did not realize that the feds would re-purpose FQHCs in the way that they have, as Medicaid providers, yet here we are. In healthcare, it seems, almost anything is, or has become, possible.


* This is largely due to barriers to entry imposed by existing doctors and especially the powerful American Medical Association. Many things could be done to increase the supply of doctors, including integrating med school into undergrad; shortening med school; allowing foreign doctors to practice without residency; or creating a special one-year residency for foreign doctors. None, however, are on the political horizon.

Preventive care doesn’t save money, bankruptcies aren’t widely caused by lack of insurance, and FQHCs

Preventive Care Saves Money? Sorry, It’s Too Good to Be True” tells you everything you need to know in the headline, though you should of course read the article. The point is important because a lot of Health Resources and Services Administration (HRSA) funding for Federally Qualified Health Centers (FQHCs) is premised on the idea that more primary preventive care will save money and slow the seemingly inexorable rise in healthcare costs. There’s an intuitive, seductive logic to the argument: it seems like it should be true that prevention is superior to treatment.

But we, collectively, don’t actually know if most healthcare is good for most people most of the time. The Robin Hanson and Kevin Simler book The Elephant in the Brain has a chapter on medicine that demonstrates most medical care is actually wasted and unnecessary. We still pursue costly, low-importance care for status reasons that are too long to describe in this post, but interested readers are directed to the book. The idea that preventive care doesn’t reduce costs and may do little to improve health is congruent with the Hanson-Simler idea that most healthcare is not actually about health.

In other healthcare news, at least one expert wonders: “Are Hospitals Becoming Obsolete?” One hopes so: many are dysfunctional and won’t reveal prices to patients, leading to wild cost inflation and the “mystery bill” phenomenon many of us, myself included, have been subjected to. In healthcare, it seems that the prices are the problem, and most healthcare players are working to maintain price opacity. At the same time, there’s very little political or media noise about this issue.

Americans read and hear a lot about insurance issues and almost none about prices and transparency. Mandating price transparency would be a huge win for patients and, maybe, for cost. Yet politicians of all stripes show little interest in this obvious (and very cheap) policy choice. I don’t know why. I have only a very small platform, but I’m going to use it to propose price transparency. Small-scale studies like “Research finds nearly 8-fold price differences at Minnesota hospitals” show that the price of healthcare varies enormously. But it’s hard if not impossible for patients to gather information about pricing (as I discovered recently).

When you get a shockingly high mystery bill, just try getting an explanation about why the price is the price. I have. Good luck. Hospital bureaucracies are enough to make one wonder if single payer really is next: the healthcare experience for many Americans is already so close to the DMV, why not just go all the way?

I’m not advocating for single payer as a political position: this is a non-political space devoted to analyzing grant writing, grant source research, and grant makers. But it is worth analyzing how the world works, how that relates to larger political questions, and what those larger questions mean for practitioners on the ground.

In the first section of this essay I wrote about primary preventive healthcare access doesn’t appear to lower costs. That’s a common idea that doesn’t appear to be true; there are other things we think we know that just aren’t true. During the ACA debate, for example, many claimed the medical bills bankrupted vast numbers of people. Turns out it just ain’t so:

The fraction of bankruptcies caused by medical events is just 4 percent. And even among those bankruptcies, it seems that medical bills may be less of a problem than the other things associated with an illness, such as lost labor income. […]

That jibes with what’s evident in the bankruptcy data since Obamacare passed. If medical bills really were driving so many people into bankruptcy, then we would have expected filings to plummet after 2013, when millions of people gained health insurance coverage. Instead we see a smooth decline from the recession-era peak.

So if we’re worried about poverty, as many of us in the nonprofit world are, health insurance access may not be the most important way to tackle that issue. The data on bankruptcy filings from 2013 to the present are particularly compelling. It may be that lost income is the bigger issue for people who get sick. Or some other factor may be at work. It’s hard to know.

Perhaps the best way to save money and improve health as an individual is to quit eating sugar and get sufficient exercise. Those things would also be good for the larger society, but “we” (the mandarin know-it-alls like myself and those who dictate healthcare policy) have no way to make that happen. Despite decades of effort—much of it misguided, granted—we have no way of improving people’s habits on the macro level. It turns out that “American Adults Just Keep Getting Fatter:” “New data shows that nearly 40 percent of them were obese in 2015 and 2016, a sharp increase from a decade earlier, federal health officials reported Friday.” Obesity is not a perfect proxy for health, but it’s a useful starting point.

Much of this essay won’t make it into the proposals we write for FQHCs and other primary care providers. Proposals are about mythology, not actuality, unless the funder specifically demands reality (most don’t). But it’s good for applicants to keep the grant world and proposal worlds straight. Reading widely and deeply is still one of the open secrets of good grant writers—and good writers of all kinds. The information is out there. Whether you choose to access it is up to you.

SAMHSA’s Screening, Brief Intervention and Referral to Treatment (SBRIT) and FQHCs

The Substance Abuse and Mental Health Services Administration (SAMHSA) just issued the FY ’18 Screening, Brief Intervention and Referral to Treatment (SBIRT) Funding Opportunity Announcement (FOA): it has $35 million for five-year grants up to about $1 million per year for assessment/referral to substance abuse treatment—and, most interestingly for our discussion, FQHCs are listed among the laundry list of eligible applicants.

SAMHSA is pointing the way forward for many substance abuse providers: become an FQHC. This may seem odd, because FQHCs are supposed to be primary health care providers, while substance abuse treatment is not considered primary healthcare and is usually provided by narrowly focused agencies. But the depth of the opioid epidemic, in tandem with the overall growth of healthcare funding, means that many substance abuse providers are being pushed towards becoming FQHCs—even as many FQHCs are also being encouraged to expand into substance abuse treatment. And we know that, when it comes to the Feds, “encouraged” is often a euphemism for “get ‘er done.”

Many FQHCs, of course, don’t want to be substance abuse providers—but, as programs like SBRIT show, the amount of money available may be too tempting to refuse. Right now, it’s also tough for FQHCs to stretch their Section 330 grants to provide fully integrated behavioral heath services, including substance abuse treatment. HRSA occasionally issues Notices of Funding Opportunities (NOFOs) for FQHCs to enhance behavioral health services, but the operative word is “occasionally,” and there’s not enough HRSA funding for behavioral health services.

Few, if any, of our FQHC clients, have had SAMSHA grants and most are reluctant to apply. This may be a case of grant “tunnel vision” in which FQHCs focus on HRSA in the same way that public housing authorities (PHAs) often tether themselves to HUD grants. The wider grant universe, however, provides opportunities for diversity that can help organizations weather shifts in funder priorities. And to paraphrase a salesman’s advice given to William Holden’s Joe Gillis in Billy Wilder’s Sunset Boulevard, “As long as the lady is paying for it, why not take the Vicuna?”

Bad and good news for FQHCs in the latest Republican tax bill

The Senate passed their version of the Republican tax bill early Friday morning, setting the stage for a conference committee with the House to reconcile their previously passed bill this week. A tax “reform” bill only comes along about once in a generation, making this important. We don’t post partisan political material here, so I’m not talking about the politics of the Republicans finally notching a significant legislative win; rather, we’re looking at the bill’s impact on the real world of FQHCs and Medicaid.

The Senate version of the bill repeals the individual mandate to buy health insurance. Most press analyses over the weekend indicate that the House will likely go along. As reported by Washington Post, this turns Obamacare Marketplaces from mandatory to voluntary:

The Congressional Budget Office, the official nonpartisan estimator, has predicted that this change would cause health insurance premiums to rise by about 10 percent a year and prompt 4 million people to drop insurance by 2019 and 13 million to drop it by 2027.

There are plenty of other estimates of what repealing the mandate will do, but over time it will almost certainly destabilize the Exchanges/Marketplaces and individual insurance landscape. The impact on FQHCs is likely to both bad and good (maybe that’s true of most complex legislation, which are usually drafted by “K Street lobbyists”).

First, the bad news: One impact of Obamacare has been a dramatic increase in the number people enrolled in Medicaid, because of the expansion of Medicaid eligibility in most states, as well as HRSA funding for an army of FQHC-employed “navigators” to enroll patients in Medicaid. FQCHs were originally intended to serve uninsured and underinsured people, not Medicaid enrollees. Still, most FQHCs have become the de facto Medicaid providers in their service areas, since many FQHC service areas have few primary care and specialty care providers and fewer still that will accept new Medicaid patients. Keep in mind that Medicaid is insurance, not health care; like all health insurance, it is only as good as the patient’s ability to find a provider who accepts Medicaid.

Without going to mind-numbing detail, Medicaid is essentially a joint federal/state-funded, fee-for-service program that reimburses providers for service encounters. As more Americans with Medicaid seek care from FQHCs, the FQHCs are faced with same dilemma confronting all providers—Medicaid payments may not and often do not fully cover the cost of providing certain encounters. Like all businesses and nonprofits, FQHCs have to “make money” to keep the lights on. FQHCs have several advantages over other nonprofit and for-profit providers, including enhanced Medicaid (and Medicare) reimbursements.

Still, an FQHC has to run a tight ship not to go into a Medicaid reimbursement death spiral. The more Medicaid patients an FQHC has, the larger this challenge becomes, and the tax bill will likely result in FQHC’s getting a flood of new Medicaid patients, as well as uninsured patients bailing from Marketplace plans, when the mandate ends. FQHCs are “providers of last resort” and in theory can’t refuse care, regardless of a patient’s lack of insurance or ability to pay. All FQHCs have sliding fee scales for this purpose, but, once again, they have to be well-managed to cover the cost of sliding fee scale-payers, including no-payers.

Now for the good news: In addition to reimbursements from Medicaid and other third-payers, FQHCs also receive annual Section 330 grants. As we’ve written about before, Section 330 grants account for about 18% of FQHC revenue and Section 330 grants don’t depend on the number of Medicaid or self-pay/no-pay patients served. This built-in cushion will help FQHC weather the consequences of the Republican tax bill.

Over time, lobbyists for the National Association of Community Health Centers (NACHC), the FQHC trade group, and their affiliated Primary Care Associations in each state, for example the California Primary Care Association (CPCA), will go to work. This will likely result in larger Section 330 grants, specialized grants to cover the impact of the tax bill, increased New Access Points (NAP) grant competitions, or a combination of all three. Although mostly forgotten in the media, FQHCs received a huge increase in funding under the 2009 Stimulus Bill and ACA (Obamacare) legislation. I don’t see any reason why this won’t repeat itself in 2018, as the impact of the tax bill on insurance, health care access, and FQHCs becomes clear.

Some version of Obamacare is likely here to stay and FQHCs will be the primary mechanism for providing care to Medicaid and uninsured people for the foreseeable future.

In other healthcare news, CVS (the drug store) plans to buy Aetna (the insurance company). This is a seemingly unusual pairing, and at first glance I don’t know what to make of it, save to think that we’re seeing unusual times and strange alliances in the healthcare industry.

“Backbone” grants for nonprofits, illustrated by the HRSA SAC and RWHAP Part C EIS programs

Human-service nonprofits face two basic challenges: keeping the lights on and providing integrated, case-managed services to meet client needs. Meeting the first challenge is obvious—if the nonprofit can’t cover basic costs like rent and salaries, the need for their services is irrelevant. The latter is trickier, since it usually takes a layer cake of grants, donations, and contracts to provide comprehensive services that really meet client needs.* To do this over the long term, it’s helpful to have at least one ongoing grant source that I’ll term a “backbone grant” for purposes of this post.

Two HRSA programs, both of which have RFPs on the street now, illustrate what backbone grants look like. In both cases, new applicants are eligible to compete with current grantees.

The Service Area Competition (SAC) provides three-year grants (often called “Section 330” or “Health Center” program grants) to Federally Qualified Health Centers (FQHCs) to provide primary health care to low-income patients. SAC grants are tagged for designated geographies called “service areas.” Hence the term “Service Area Competition or SAC;” we’ve written about the SAC grant process.

There are about 1,400 FQHCs right now, and every year a few dozen nonprofit health care providers receive a new FQHC designation, usually by receiving a New Access Point (NAP) grant. These days, FQHCs derive most of their revenue from Medicaid and other third-party payer reimbursements. Still, The Kaiser Family Foundation—a great source for health-related data—reports that Section 330 grants account for 18% of FQHC revenue. At first glance this might not seem like a lot, but imagine that your income was suddenly reduced by 18%—there goes Netflix, vacations, your rainy-day fund; you’ll be buying yoga wear at Target, not Lululemon. The same is true for FQHCs, which, like most Medicaid providers, operate on thin margins.** Thus, disaster would follow loss of Section 330 funding.

The second, Ryan White HIV/AIDS Program Part C HIV Early Intervention Services Program (RWHAP Part C EIS), provides three-year grants for outpatient primary health care and support services for low income, uninsured, and underinsured people living with HIV/AIDS (PLWH) in specified service areas. A range of nonprofit types receive RWHAP Part C EIS grants, including many FQHCs.

Not surprisingly, PLWH have very complex heath care and supportive services needs in addition to primary health care, as many also face challenges like injection drug use (IDU), other substance abuse, severe mental illness, homelessness, and so on. This makes providing case-managed integrated care to PLWH complicated and expensive. While grantees use multiple funding streams (e.g., Medicaid, other RW grants, etc.) to serve this hard-to-serve population, RWHAP Part C EIS grants are often the glue that holds the Rube Goldberg PLWH care system together. They’re the backbone grant. Without those grants, many fewer people would receive comprehensive HIV services—and they’d be more likely to transmit HIV to others.

We write many SAC and RWHAP Part C EIS proposals and know that many current grantees alternate between being indifferent and hysterical when the new funding cycle is announced. CEOs of FQHCs and similar large grantees often come to take backbone grants like these for granted (pun intended) because they’ve had the funding for years and think they’re entitled to the grant. This is a mistake.

Both programs, as well as many other similar backbone grant programs, force current grant grantees to complete with new applicants. While it’s not easy for a new applicant to “take away” a backbone grant, it can be done. We know, as we’ve helped clients do just this. We’ve also helped clients defend against new entrants to the market.

The CEO indifference towards the grant turns to hysteria when the CEO realizes the deadline is approaching and also realize they can’t receive a new backbone grant unless a technically correct and compelling proposal is submitted on time. HRSA uses peer reviewers and, from the reviewer’s point of view, applications from existing and new applicants are the same—it’s as if HRSA has never heard of the applicant, even if they’ve received the same grant for years. Victory is never final. Proposals need to meet some minimum quality threshold to be fundable. If they don’t meet that threshold, they may be rejected even if there are no other plausible providers in a given area.

The moral of this tale is twofold. If you’re a current grantee for a backbone program, don’t take your grant for granted. If you’re a new applicant, who wants to provide the service, by all means, go after the current grantee’s grant—they might stay in indifference mode and either turn in a lousy proposal or miss the deadline. It happens.


* Many grants and contracts don’t actually provide sufficient funding to do all the activities and accomplish all the goals funders require. Everyone knows this but no one talks about it. Except us.

** According to this analysis by FiveThirtyEight, state funding for colleges is down to the 8 – 20% range—which explains most of the cost of public-college tuition hikes over the last decade. For some reason, most state residents are demanding that colleges be better funded.

FQHCs, Reproductive Health/Family Planning Services, and Planned Parenthood: An Uneasy but Symbiotic Relationship, Centered on Title X Funding

We often write about Federally Qualified Health Centers (FQHCs), in part because we often work for them in part because FQHCs illustrate many challenges facing other nonprofits. This post discusses a service that FQHCs could provide but mostly choose not to—a common circumstance among certain classes of nonprofits, like foster family agencies and substance abuse treatment providers.

To understand the dilemma, you have to know that the Health Resources & Services Administration (HRSA) funds FQHCs under Section 330 of the Public Health Services Act and FQHCs are sometime referred to as “Section 330 providers.” While FQHCs do collect copays and most take insurance, a large chunk of their funding comes directly and indirectly (via Medicaid) from the feds. FQHCs are mandated to provide “integrated full life-cycle care” (HRSA-lingo here), including reproductive health/family planning services. Still, many of our FQHC clients are skittish about promoting these services and are consequently reluctant to seek other grants to support family planning.

Thus, FQHCs have effectively ceded the huge pot of Title X family planning grants ($288 billion in 2016) to specialized family planning clinics, which are mostly but not exclusively operated by local affiliates of Planned Parenthood. While Planned Parenthood provides great women’s reproductive and related preventative health care, with an emphasis on low-income women and girls, unlike FQHCs, their clinics do not provide full life-cycle care.

From what we can tell, FQHCs and Planned Parenthood clinics seem to operate in a symbiotic, but parallel manner, in which both stay out of each other’s turf (if you have even more specialized knowledge about this situation, feel free to leave a comment). There are about 650 Planned Parenthood clinics, which serve about 2.5 million women annually with family planning services (this does not include abortions). In contrast, there are about 1,400 FQHCs, which serve about 17 million patients annually, and these numbers are growing rapidly due to the expansion of Medicaid under the ACA. More than 50% of FQHC patients are women, so let’s call it 9 million. FQHCs serve many more women than Planned Parenthood, but readers would never know this from the media.

While I don’t know this for sure, one presumes this is because, bureaucratically speaking, there are at least two parts to Planned Parenthood that are structured separately: the family planning side, which is touted by progressives, and the abortion side, which is demonized by some conservatives. The nascent FY ’18 federal budget battle between the Trump administration/Republicans and Democrats is being fought partially over Title X funding. The media usually obfuscates the Tile X grant aspect, focussing instead on the much more sensational issue of Planned Parenthood funding.

I assume that, if Congress passed legislation making Planned Parenthood ineligible for Title X (unlikely but possible), other providers, like FQHCs, would start applying for Title X grants. In other words, no matter what happens, as far as I know, there are no proposed cuts to Title X (again, if you have specialized knowledge, leave a comment). It’s just a question of which agencies will provide Title X funded services and how those agencies will link with Planned Parenthood, which presumably would continue as the nation’s main abortion provider.

I know the potential competition between FQHCs and Planned Parenthood clinics is a big issue for Planned Parenthood, as Title X provides more or guaranteed funding to keep the lights on—a concern for all nonprofits. This basic issue was confirmed by several interesting pieces I found and that the Alan Guttmacher Institute published (it’s more or less the research affiliate of Planned Parenthood).* For example, this article makes the curious argument that FQHCs couldn’t expand to provide family planning service now being provided by Planned Parenthood:

FQHCs are an integral part of the publicly funded family planning effort in the United States, but it is unrealistic to expect these sites to serve the millions of women who currently rely on Planned Parenthood health centers for high-quality contraceptive care.

As a grant writer, I admire the carefully crafted but entirely specious reasoning, which reminds me of our needs assessments, I’m pretty confident that FQHCs would have no trouble picking up the slack and the Title X grants—if they wanted to. We have some FQHC clients with over 40,000 patients, and at that size they can begin to resemble something larger than a community clinics. At the moment, they’re mostly reluctant to tangle with Planned Parenthood—but, again, they could.

And they might.


* The Guttmacher Institute is a great source, albeit one with a point of view, for studies and data relating family planning, teen pregnancy, and the like. We sometimes use their citations in writing needs assessments. If you’re curious about research organizations with a point of view, Daniel Drezner’s book The Ideas Industry is good.

Yes, it is possible for your FQHC to lose its HRSA Section 330 grant

If you’re a Federally Qualified Health Center (FQHC), you’ve probably seen announcements like this one, from the Federal Register: “Service Area Competition – Additional Areas (SAC-AA) – Honolulu, Hawaii; College Station, Texas; and Rock Springs, Wyoming.” Those announcements may seem curious: why announce for a strangely small number of additional service areas?

Answers vary. Sometimes it’s because the current FQHC Section 330 grantee has screwed something up badly enough to have its SAC grant yanked (though this is rare). More often, HRSA simply didn’t get any qualified applications for SAC grants in a certain geography, leaving a given area without a Section 330 provider needs for basic healthcare.

We’ve been told some funny stories about HRSA’s reaction to inadequate applicants. Our favorite probably involves an FQHC that called us on a Wednesday or Thursday about a SAC application that was due Monday. We were flabbergasted by this request and knew that a SAC FOA wasn’t on the street anyway. Our client explained what happened: She’d forgotten about the SAC deadline and failed to submit an application. HRSA did the initial review and realized that our client’s application was missing, and no one else had submitted for that rural service area.

HRSA probably isn’t supposed to extend the deadline for applicants who forget about the competition, but HRSA also doesn’t want healthcare gaps. So in the case of our client, HRSA called, told the client to get off their rear, and demanded a proposal by the following Monday. Our client panicked and called us.

We were able to complete the proposal on time (professional grant writer at work, don’t try this at home), and not surprisingly the client got funded. In short, depending on your FQHC’s relationship with HRSA, you can get wildly different outcomes from the same inputs. Our client got lucky. You may not be. We recommend attending to SAC deadlines and making sure you submit a complete, technically accurate proposal before the due date.

We’ve worked on SAC projects for insurgents attempting to take down the current grantee, and we’ve also worked on projects for the current grantee who suddenly realizes that they need a more serious application due to the threat of upstarts. Both kinds of projects are fun for us, albeit in slightly different ways. Both kinds of projects are also a reminder to FQHCs: SAC stands for “Service Area Competition.” Don’t get cocky. We’ve seen lots of cocky clients lose their primary funding streams via hubris, laziness, or both. Success is never final. There are no guarantees in grant writing, and you should know that you may have to compete for your dinner at any time.