Federally Qualified Health
Centers: Provision and Payment
for Dental Services
Presented at
54th Annual ADEA Deans’ Conference
November 12, 2012
Roger Schwartz
National Association of Community Health Centers
What are FQHCs?
• Grantees under Section 330 of the Public Health
Service Act, mostly Section 501(c)(3) tax exempt
non-profit entities, but also some public grantees
(county health departments, etc.)
• Covered under FTCA and qualify as a covered
entity under the Section 340B drug discount
program
• Defined as FQHCs in the Medicaid and Medicare
statute – also includes “look-a-likes”
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• Five Basic Characteristics  Location in high-need areas: MUAs and HPSAs
 Comprehensive health and related services (especially
‘enabling’ services)
 Open to all residents, regardless of ability to pay,
with charges prospectively set based on income
 Governed by community boards, to assure
responsiveness to local needs
 Held to strict performance/accountability standards
for administrative, clinical, and financial operations
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Community Health Centers Today
• Largest national network – 22 million + people served,
37% uninsured, 38% Medicaid, 7% Medicare, 63%
people of color, 92% low-income individuals
– Serve 1 in 5 low-income uninsured and 1 in 7
Medicaid beneficiaries
– Number of Medicaid patients served by health
centers continues to increase, growing almost twice
as fast as number of Medicaid beneficiaries
nationally between 2000-2009.
– Anticipate further Medicaid expansion per ACA in
2014
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How Health Centers Help to Improve Health
and Save Money
• They reduce hospital and ER use (5.8 fewer admits per
1,000; 13 - 38% fewer ER visits) for their patients
• Their patients’ overall costs are 24 percent less than
those served by other providers, saving $24Billion/yr
• Their disparities collaboratives are found to reduce
health disparities significantly for minority patients
• While health centers provide care to 14% of all Medicaid
beneficiaries, their Medicaid payments make up only 1%
of Medicaid spending nationally.
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Community Health Centers:
A Unique & Proven Primary Care Model
Access
Quality
-Serve as health care homes to over 22 million -Medicaid beneficiaries receiving health center
patients in 8,000+ rural and urban care 19% less likely to use emergency
underserved communities.
department, 11% less likely to be hospitalized
for ambulatory care-sensitive conditions than
-Open to all regardless of insurance status; beneficiaries using other providers.
offer care on sliding-fee scale.
-Ensure that all patients receive recommended
-Will reach 40 million people in need by 2015. screenings and health promotion services.
Cost-Effectiveness
Economic Engine
-Save $1,200+ per patient annually in total -Generated over $20 billion in total economic
health care costs.
benefits for low-income communities in 2009.
-Drive $24 billion annual savings from reduced -Produced nearly 190,000 jobs that same year.
emergency, hospital, and specialty care costs,
including $6 billion in combined
state and -Will create 284,000 new jobs and generate
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federal Medicaid savings.
Centers -$54
2012 billion in overall economic benefits by
Payment to FQHCs in the Medicaid Program
• Omnibus Budget Reconciliation Acts of 1989
and 1990 establish FQHC and FQHC Services
and payment in Medicare/Medicaid
– Reasonable cost payments intended to protect grant
dollars from low Medicare/Medicaid reimbursements
– Medicare FQHC regulations: 42 CFR 405.2400 et seq.
– Medicare reasonable cost regulations (42 CFR 413)
– Medicare RHC/FQHC Manual (Pub. 27)
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Cost-Based Reimbursement (“Reasonable Cost”)
• No Medicaid FQHC regulations and minimal CMS
guidance.
• Allowable costs for Medicaid-covered services divided
by Billable visits (face to face encounters)=
All inclusive per visit rate
• Example:
$1,000,000 allowable costs
10,000 visits
All inclusive per visit rate = $100
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FQHC Services in the Medicaid Program
• FQHC Services, as defined in Medicaid Statute:
42 USC 1396a(a)(10)(A), 1396d(a)(2)(C) and
1396d(l)(2)
– FQHC services in Medicaid are Medicare rural
health clinic services and any other ambulatory
service in the State Medicaid plan provided by the
FQHC
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The Medicare, Medicaid, and SCHIP Benefits Improvement
and Protection Act (BIPA) [P.L.106-554]:
• Replaces reasonable cost payment to FQHCs
with Prospective Payment System (PPS)
• Found at Section 1902(bb) of the Social
Security Act [42 USC 1396a(bb)]
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The PPS Baseline
• For services provided between January 1 –
September 30, 2001
• Payment calculated on a per visit basis
• States required to pay current FQHCs 100 percent
of the average of their reasonable costs of
providing Medicaid-covered services during
FY1999 and FY2000
• Adjusted to take into account any increase (or
decrease) in the scope of services furnished
during FY2001 by the FQHC
• Issues: Caps, Screens, Services covered, etc.
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Calculating Future Rates:
Federal Requirements
• For FY2002 and each fiscal year thereafter,
each FQHC per visit payment should be the
same as the previous year payment amount,
adjusted by:
– The change in the Medicare Economic Index (MEI)
for primary care services, and
– Increase (or decrease) in the scope of services
furnished by the FQHC during that year.
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Change in Scope of Services: What may be
considered a change?
• Adding or subtracting a billable service? A
non-billable service – Yes, if it’s a new service?
• New sites? New capital costs?
• Intensity of Medicaid services?
• Volume of Medicaid cost or visits - No
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PPS for New FQHCs:
• For entities that qualify as FQHCs after fiscal year
2000, the State plan shall provide for payment in
an amount (calculated on a per visit basis) that is
equal to 100 percent of the costs of furnishing
such services during such fiscal year based on
• The rates established for the fiscal year for other
centers or clinics located in the same or adjacent area
with a similar case load or
• In the absence of such a center, in accordance with
Medicare FQHC regulations and methodology, or
• Based on other tests of reasonableness as the Secretary
may specify
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PPS for New FQHCs:
• For each fiscal year following the first year in
which the entity qualifies as a FQHC, the State
plan shall provide for the payment amount to
be calculated in accordance with the PPS.
42 USC 1396a(bb)(4)
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Wrap-Around Payments Federal Requirements
42 USC 1396a(bb)(5)
• States required to make supplemental payments to FQHCs
that subcontract (directly or indirectly) with Managed Care
Entities (MCE).
• Supplemental payment is the difference between the
payment received by the FQHC for treating the MCE enrollee
and the payment to which the FQHC is entitled under the PPS
• MCE still must pay FQHC an amount comparable to what it
pays similar providers for similar services. 42 USC
1396b(m)(2)(A)(ix)
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Wrap-Around Payments Federal Requirements
• Under PPS, State must make supplemental
payments at least every 4 months
• Issues: How will State determine amount of
MCE payments to FQHC? What about MCE
payment denials (for non-enrollees, ineligible,
services not part of MCE contract, etc)?
Recent trend toward MCEs making full
payment to FQHCs in place of wrap-around.
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Alternative Payment Methodology:
42 USC 1396a(bb)(6)
• State and health center option
• Each individual FQHC must agree to any
alternative payment methodology (APM)
• APM must reimburse a FQHC in an amount
that is not less than the amount the FQHC is
entitled to under the PPS
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APM: Implications
• PPS rate is the “measuring stick” to determine
whether rate under alternative methodologies
are lawful in subsequent years – As PPS rate
increases annually with inflation, so should
the rate offered under the alternative
methodology
• APM can be basis for FQHCs participation in
payment reform with PPS as the payment
floor
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FQHC Contracting for Dental Services
BPHC/HRSA Requirements
• Section 330 requires FQHCs to provide “primary health
services” which are defined to include “preventive dental
services” 42 USC 254b(a)(1) and 254b(b)(1)(A) (i)(lll)(hh).
“Preventive dental services” are defined by regulation (42│
CFR51c.102(h)(6) to include “services provided by a licensed
dentist or other qualified personnel including:
– (i) oral hygienic instruction;
– (ii) oral prophylaxis as necessary;
– (iii)total application of fluorides, and the prescription of
fluorides for systemic use when not available in the
community water supply.”
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FQHC Contracting for Dental Services
• FQHCs can also obtain federal approval to
provide “supplemental health services” which
can include “dental services other than those
provided as primary health services”
42 CFR 51c.102(j)(6)
• These services can be provided “through staff
and supporting resources of the center or
through contracts or cooperative
arrangements.” 42 USC 254b(a)(1)
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FQHC Contracting for Dental Services
• Services have to be included in the health center’s
approved scope of grant project and would have to
be available to all patients of the health center, i.e.
uninsured, Medicaid, insured, etc; and relevant 330
grant rules would apply, such as sliding fee scale for
those below 200% of Federal Poverty Line (FPL), no
charge or “nominal charge” for those below 100%
FPL, and full charge for patients at or above 200%
FPL. Fee schedule must be consistent with locally
prevailing rates and reflect the health center’s
reasonable costs of providing services.
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FQHC Contracting for Dental Services
• FTCA coverage would also be available to the
contractor if the contract is with the individual
contractor. Also, with regard to dental services, the
contract would have to be for an annual average of
32.5 hours per week. 42 USC 233 (g) (5) (A)
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FQHC Contracting for Dental
Services
CMS/Medicaid Requirements
– Dental services are an optional service in Medicaid;
however EPSDT services are a required service for children
and they include dental screening and dental services as
determined medically necessary per the EPSDT screen
42 USC 1396d(r). Thus dental services are an optional
service for adults but a required service for children.
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FQHC Contracting for Dental Services
– FQHC services are a required Medicaid service that
includes RHC “core services” and any ambulatory service
included in the state Medicaid plan. 42 USC 1396d(a)(2)(C)
– this requirement should include dental services and
result in PPS reimbursement to FQHCs for dental services,
but some states still pay FQHCs a FFS payment for dental
services.
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FQHC Contracting for Dental Services
– States vary a great deal on what (if any) services they allow
an FQHC to provide off-site for which it will be paid on the
basis of PPS. However, the Medicaid and CHIP statute
42 USC 1396a(a)(72) and 1397gg(e)(1)(B) provide that a
state may not prevent an FQHC from contracting with
private practice dental providers in the provision of FQHC
services and CMS has recognized this policy in a CMCS
informational bulletin dated March 25, 2011
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FQHC Contracting for Dental Services
– In this Bulletin, CMS notes that some state Medicaid
agencies “have required dental providers who contracted
with FQHCs to individually enroll in the Medicaid
program”, however this “is no longer permissible under
the statute.” The Bulletin also states that the dental
services “furnished off-site by private dental providers who
contract with FQHCs will be covered by Medicaid and CHIP
as FQHC services when those dental services are of the
type that would be covered if provided on-site at the
FQHC” and “[p]ayment for such services should be made
to the FQHC in accordance with the State plan.”
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FQHC Contracting for Dental Services
– Payment to dentist by FQHC – FQHCs can contract with
dentist for payment on the basis of specific services to be
provided to the FQHC patient using a negotiated feeschedule; number of patients to be seen; number of visits
available to FQHC patients; number of sessions (hours or
days) to be committed to FQHC patients; or other
mutually-agreeable basis.
– PAYMENT TO THE DENTIST IS NOT TO BE BASED ON PPS,
i.e. the FQHC’s PPS rate cannot directly determine the
payment rate to be made to the contracting dentist i.e.
cannot be a “pass-through” of Medicaid PPS payment to
another provider
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FQHC Contracting for Dental Services
• States are concerned about paying an increased
amount of money to the same provider for the same
services as a result of FQHC affiliation and/or
contracting arrangements. Be sure that the state
Medicaid agency is agreeable to the arrangement and
the payment structure.
Resource:
“Increasing Access to Dental Care Through Public
Private Partnerships: Contracting Between Private
Dentists and Federally Qualified Health Centers. An
FQHC Handbook” (March 2011) Children’s Dental
Health Project, Washington, DC www.cdhp.org
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