Feds Give Public Hospitals Financial Incentives to Care for the Uninsured

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Eva, an undocumented immigrant and single mother in Bakersfield who harvests grapes to support her three children, suffered from daily hemorrhaging for eight months after delivering her third child. A physician at a federally-funded community clinic sent her to the hospital to get a biopsy for a uterine growth. But despite many trips to the emergency room to treat her symptoms, she was told that she would have to pay $450 before they would perform a biopsy.

Eva* explained through a translator that she became anemic, making it difficult at times to walk, work and care for her children. The bleeding has now stopped but she gets sick often, and because she can’t pay the hospital fee, she lives with the fear that her tumor could be malignant.

Stories like Eva’s are all too common, said Josth Stenner, a co-chair of the Health for Kern Coalition, part of the Building Healthy Communities South Kern community initiative. Undocumented immigrants in Kern County who go to federally-funded community clinics often wait up to three months to see a doctor or wait and go to the emergency room when their condition worsens, he said.

Hospitals that take Medicaid are tasked with accepting all comers to their emergency rooms regardless of patients’ ability to pay. Hospitals receive some federal reimbursement to treat those patients, but the money has historically been limited to care provided inside hospitals.

To support public hospitals in providing the preventive care that can slow revolving emergency room doors, the California Department of Health Care Services has received federal approval for the Medi-Cal Global Payment Program, a first-in-the-nation program giving California’s public health care systems financial incentives to fund primary and preventive care to the uninsured.

Services that traditionally got little or no reimbursement, like nutritional counseling and group visits for educating people about chronic conditions, can now be covered in this new program. Other services include telemedicine and telephone and e-mail consultations between doctors and patients.

“These people will be treated more like patients with coverage,” said Mari Cantwell, chief deputy director of health care programs at the California Department of Health Care Services.

The Affordable Care Act and expanded Medi-Cal have reduced the number of uninsured dramatically. But between 2.7 and 3.4 million Californians will remain uninsured by 2019 and up to half of them will be undocumented immigrants ineligible for insurance, estimates the UC Berkeley Center for Labor Research and Education. Many others can’t afford even subsidized coverage through the state.

For the 17 public hospitals designated to participate in the Global Payment Program, the reimbursements they get for treating the uninsured can now flow outside the hospital walls to provide primary care in partnering community clinics.

Traditionally public hospitals generating the highest costs got more of the federal reimbursement money. There was little financial incentive to provide more effective and cheaper preventive care, said Allan Wecker, Los Angeles County Department of Health Services Chief Financial Officer.

Now each hospital will be allocated a budget based on its historical volume of care and will have to provide a certain level of care to the uninsured to receive its full allotment. Services that promote the goals of the program, such as convenience of care to the patient, earlier intervention and potential mitigation of future costs, will get higher reimbursement rates. Care provided in inappropriate settings, such as emergency room visits for preventable conditions, will get increasingly lower reimbursements.

And the money will go much further, according to Wecker. The cost of a two-day hospital stay could fund about 20 primary care visits, he said. The Department plans to invest in more doctors, computer equipment and furniture to provide primary care in its community public health clinics, Wecker said.

County health systems range dramatically in terms of care for the uninsured. San Francisco and Los Angeles have programs that cover all uninsured residents regardless of their inability to pay or immigration status.

Los Angeles County, home to almost one-third of the remaining uninsured according to UC Berkeley, founded its My Health LA program in October of 2014. It provides care to 139,000 residents, mostly undocumented, at a cost of $61 million this year to the county, said Tangerine Brigham, deputy director of managed care services for the Los Angeles County Department of Health Care Services.

And Healthy San Francisco is a safety-net program for all uninsured residents at or below 500 percent of the federal poverty level. Santa Clara and Contra Costa are other counties that have recently started their own limited care programs for the uninsured.

Then there are counties like Kern providing far fewer resources for the uninsured. But because the Global Payment Program does not draw on county funding it has prompted the local public hospital, Kern Medical, to take full advantage of the program, Stenner said.

One of the barriers to care in Kern is that many residents live thirty minutes or more from the nearest urgent care. The new program will allow the hospital to contract with clinics in rural areas, he said.

While many public health systems are optimistic about the program, there are concerns about implementing it. “Counties are rightfully anxious about how this will work in actuality,” Cantwell said. “It is a huge change.”

The changes are key to shifting hospitals’ approach to care, said Aaron McQuade, a spokesman for the California Association of Public Hospitals.

“The idea is to invest in peoples’ health, not just treat people when they’re sick,” he said. “And the structures change when the payments change.”

*Eva’s real name has been withheld because she is an undocumented immigrant.

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