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How Hospitals and Federally Qualified Health Centers Should Collaborate

By Susan Patton, for HealthLeaders Media  
   April 16, 2010

Drowning in losses from uncompensated emergency room care? Collaborative relationships between hospitals and federally qualified health centers can benefit both provider types by allocating scarce resources effectively and efficiently to lift the health status of a community and decrease hospital losses from avoidable ER visits.

Reflecting a stagnant economy and entrenched unemployment and underemployment, most hospitals have experienced a significant increase in uncompensated or undercompensated care. One third of all ER visits are estimated to be avoidable. Nationally, more than $18 billion is spent annually on avoidable ER visits. Avoidable ER visits are those which are non-urgent or ambulatory care sensitive and therefore treatable in primary care settings. Avoidable ER care is also care that could be provided more effectively from an outcomes standpoint and more cost efficiently at another site.

It also includes care which is futile in relation to an underlying condition when provided in an ER setting, such as treatment for chronic conditions, dental pain, stress and psychosocial issues. Key findings of the Kaiser Commission on Medicaid and the Uninsured from August 2009 found that ER capacity is strained and almost all ERs report rising volumes due to inadequate access to primary care among the insured and uninsured, rising numbers of uninsured, and the growing inability of patients to afford out-of-pocket costs (co-pays and deductibles), among other factors.

FQHCs have provided patient centered medical homes since their inception. They are an old solution to an old need. FQHCs keep patients with chronic conditions and psychosocial needs out of hospital ERs. More importantly, FQHCs provide patients with medical homes where they can build ongoing, personal relationships with treatment teams, resulting in continuous, comprehensive and integrated care. FQHCs can provide case management, transportation, translation, nutrition and social worker services. Whatever their medical, dental, or behavioral needs--primary or secondary, preventive care, acute care, chronic care, or end-of-life care--the patient has a medical "home."

Hospitals can affiliate with FQHCs to help solve problems in access and payment and provide specialized, high-risk services such as obstetrics. FQHCs are nonprofit community based healthcare providers that serve uninsured, Medicaid, Medicare, SCHIP, migrant, homeless, public housing and other public health patients. FQHCs provide primary care medical, dental, mental health and substance abuse services, including case management, transportation, translation/interpretation services and health education. FQHC services can be provided in centers, mobile units, at a patient's home or in a nursing facility. Numerous studies document that FQHCs reduce ER visits by providing access to primary care and case management to patients with complex, chronic conditions, deferring them from costlier avenues of care.

As a "best practice," hospitals should have an FQHC "partner." Within constraints of antitrust laws concerning the allocation of markets for primary care, chronic care and mental health and substance abuse services, hospitals and FQHCs can work together to get patients into medical homes at FQHCs and out of hospital ERs.

Hospitals, FQHCs and community mental health service providers can collaborate to address the needs of ER patients with both mental health needs and medical co-morbidities who would benefit from differential diagnosis to ensure medical illnesses are not treated psychiatrically and vice versa. To the extent that hospitals have any primary care practices, including OB, consideration could be given to converting these to FQHC status. Advantages of FQHC status over a hospital-based primary care clinic include the doubled Medicaid payment and tapping into malpractice coverage under the Federal Tort Claims Act, which is especially valuable for obstetrical services.

In maximizing reimbursement for primary care through the FQHC site of service differential, hospitals could exit the primary care market, leave its FQHC partner with the patient population and financial resources to expand primary care services to meet the demand, reduce avoidable ER use and redeploy savings into either other hospital operations, or expanded charity care through vouchers or subsidies targeted for follow-up care with specialists or inpatient care.

In short, charitable "spend" on futile, avoidable ER care could be redirected toward effective, evidence based medical care in a cost effective site of service. A feature of all of the health reform initiatives is their call for more accountability and transparency with respect to the charity care "spend" of tax-exempt hospitals in exchange for their exemption. Having an ER that provides uncompensated or subsidized care may not be enough in the future.

Tax-exempt hospitals with ERs may be expected to be smarter, in relation to strategies to minimize avoidable ER visits, eliminating or reducing charity care "waste" from futile or avoidable ER care and creating charity care "value" by supporting FQHCs that provide medical homes for evidence-based medical primary care, chronic disease management, dental care and care for psychosocial diseases, mental health and substance abuse, and using saved charity care dollars as a partial funding source. Providing non-emergency care through a FQHC collaboration is consistent with EMTALA.

Let's talk nuts and bolts. Hospitals can partner with an existing or new, to-be-formed FQHC to do some or all of the following:

1. Hospitals could provide work space for outreach case managers in Hospitals' ERs. After an ER visit, outreach case managers could provide patients with information about using a FQHC as their medical home, register the patients with a FQHC and schedule the patients for follow-up appointments at FQHC locations if immediate follow care is needed. For patients who do not need to be seen immediately for follow-up care, outreach case managers would register them as FQHC patients, assign them to a convenient medical home and provide patient education and support to integrate them into the FQHC system.

2. Hospital ER staff could use a web-based tool to schedule real-time follow-up appointments. ER staff could check FQHC provider availability by location and schedule appointments so that patients have a written confirmation of their follow-up appointment at the time they leave a hospital's ER, printed in the language of choice, the time and date of the appointment, and the name, address and telephone number of the provider. For patients requiring transportation, public transportation schedules and/or transportation vouchers could be provided. FQHC' staff could access the data base for information to contact the patients and remove any barriers to follow up.

3. Hospitals could donate staff and resources to assist an FQHC with fund raising, development, grant writing and lobbying to expand capacity and add locations and to create a sustainable funding source to pay for secondary or tertiary care services for its patients. Primary care grants represent one of the largest percentages of grant giving in the United States.

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