Hospitals are diverting patients from primary care to ‘look-alike’ health centers to boost finances

A growing number of hospitals are outsourcing often unprofitable outpatient services for their poorest patients by establishing independent, nonprofit organizations to provide primary care.

Medicare and Medicaid pay these clinics, known as federally qualified health center lookalikes, far more than they would if the sites were owned by hospitals.

Like the nearly 1,400 federally-licensed health centers — which also receive those extra dollars — a clinic designated by the government as a “look-alike” is also eligible for federal programs that could help cut costs and recruit workers. service providers. They allow clinics to obtain prescription drugs at very favorable prices and attract doctors by making them eligible for a government program that helps them pay off their student debt if they work in an area where there is a shortage of medical providers.

But unlike community health centers, lookalikes do not receive an annual federal grant to cover operating costs. The lookalikes also don’t get the financial benefit in which the federal government covers their malpractice risks.

Although not part of a hospital system, many hospital-trained look-alikes have clinics on hospital campuses or a short distance away. As a result, clinics can help divert patients without urgent needs from expensive emergency rooms.

This helps reduce losses, especially those of uninsured patients who might have used the emergency room for primary care. Converting clinics to lookalikes is also often a strategy for hospitals that have a high proportion of patients enrolled in Medicaid, which typically reimburses hospitals at lower rates than commercial health plans, said firm partner Jeffrey Allen. of Forvis consulting. “It’s a growing trend,” he said.

Hospitals are betting they will come out on top by creating a loss-making department and giving the lookalike subsidies to keep it solvent, he said. At the same time, hospitals expect many patients from similar clinics who need to be admitted for services or require specialized care to be referred to their hospitals, he said.

At least eight hospital systems converted existing clinics or built new ones that received lookalike designation from 2019 to 2022, according to a KHN analysis of federal data. They understand:

  • Parrish Medical Center in Titusville, which helped open Space Coast Health Centers, designated as a lookalike in 2022. Parrish spent $1.2 million to set up the clinic, which provides primary care and health care Mental Health, a few blocks from the hospital. “Many of our patients have not received primary care in years and have multiple medical and behavioral needs,” Space Coast CEO Arvin Lewis said in a statement to KHN. “We are working to improve access to care.
  • Parkview Health, a large hospital system in Indiana and Ohio, which opened a lookalike called Alliance Health Centers in Fort Wayne, Indiana, which was designated in 2021. Tami Brigle, a spokesperson for the hospital , said the look-alike status gave the system a better way to deliver care to the underserved.
  • Wabash General Hospital, which partnered with a local health department to form the Wabash Community Health Center, a lookalike clinic near the hospital in Mount Carmel, Illinois. Danielle Stevens, the hospital’s executive vice president of business development, said the hospital is treating some clinic patients in its emergency room and the new facility is providing mental health and physical health services in one. only place. “The intention is to expand services that are not currently available to the community with enhanced reimbursement,” she said.
  • Beverly Hospital in Montebello, a city in Los Angeles County, which provided a $3 million loan and donated its women’s clinic to launch the BeverlyCare lookalike, according to BeverlyCare executive director Corali Nakamatsu. The lookalike rents office space at the hospital for his adult and pediatric clinic. This clinic helps patients who need follow-up care after visiting the hospital emergency room. The clinic also offers patients a less expensive option than using the ER.

Indiana Hospital Association President Brian Tabor said hospitals are sometimes reluctant to form a lookalike because it means giving control to a new organization. But, he said, the conversion can benefit both hospitals and patients: “Hospitals are exploring different payment models to support access in rural and underserved areas, and look-alike status has become for some a real essential tool”.

Nationwide, 108 similar health centers are operating today, up from 87 in 2020, according to the Federal Health Resources and Services Administration. The majority were not initiated by hospitals.

Similar health centers are overseen by a board of directors and at least 51% of directors must be patients, just like full-fledged community health centers. Similar health centers treat patients on a sliding scale based on their income.

Organizations typically seek lookalike status with the federal government as a precursor to becoming a fully federally funded health center.

In the Allentown, Pennsylvania area, the two major health systems — St. Luke’s University Health Network and Lehigh Valley Health Network — recently turned many of their primary care clinics into lookalikes. . Neither hospital provided a spokesperson to speak about the changes, but both responded to questions in writing.

St. Luke’s launched Star Community Health in 2018; he received his lookalike designation in 2020. “Star was able to treat a broader group of people who would otherwise not have access to care,” Star CEO Mark Roberts said, although he did not provide no details on the expansion.

Lehigh Valley has converted many of its primary care practices to look-alike status as the Valley Health Partners Community Health Center. Additional funding from Medicare and Medicaid has allowed clinics to expand mental health and addictions services, as well as offer help from financial counsellors, social workers and clinical pharmacists, spokesperson Jamie said. Stover.

Lee Health, a Fort Myers, Fla.-based hospital system, converted more than two dozen of its outpatient clinics to look-alike status as of 2014. Bob Johns, senior vice president of Lee Community Healthcare, is the only executive to lookalike full time. The other staff are still employed by the hospital system.

The increased Medicaid funding helped pay for four new adult family practice clinics and a pediatric mental health clinic, Johns said. And a mobile health clinic that travels to underserved areas is also partly funded by enhanced Medicaid reimbursements.

Johns said the look-alike clinic receives about $120 for a visit to the Medicaid primary care office, nearly double the payment the clinics received when they were owned by Lee Health.

Johns credits similar clinics with reducing unnecessary emergency room visits by at least 20% at Lee Health hospitals. Many of those visits were from uninsured patients, he said.

The lookalikes also benefit from the federal 340B program, which allows them to purchase drugs at deeply discounted rates to resell to patients. Patient insurers typically pay centers a higher rate and clinics keep the difference. Clinics can reduce out-of-pocket costs for patients but are not required to do so, although Johns said Lee Health reduces drug costs for uninsured or low-income patients.

Hospital systems like Lee Health that qualify for the 340B program can generally only use it for their admitted patients, Johns said.

Lookalike status also allows clinics to participate in the National Health Service Corps, a federal program that pays student loans for clinicians who agree to work in an area where health care providers are in short supply, he said. “It’s a great way for us to hang on to suppliers,” Johns said.

The transfer of lookalike care has helped Lee Health find new funds to expand care for the medically underserved, he said.

“It’s a cool model and a very efficient way to use limited resources,” Johns said.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Along with policy analysis and polls, KHN is one of the three main operating programs of the KFF (Kaiser Family Foundation). KFF is an endowed non-profit organization providing information on health issues to the nation.

Copyright 2022 Florida Health News

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