LA’s community clinics welcome new ways of paying for the care of poorest patients

In early February, Congress passed a budget deal that included two years of funding for community health centers. While the continued funding addresses the immediate sustainability of these clinics, the need to control costs while improving community health remains a long-term challenge.

That’s a major reason why clinics are testing newer payment models that reward quality of care and patient outcomes, rather than tying payments to the volume of services delivered.

Historically, health care programs have been built around a fee-for-visit model, in which the health care provider receives payment only if there is a face-to-face visit between a provider and patient. But other services that enhance care and improve outcomes, such as home visits by promotoras, health education, group visits, and wellness and prevention activities, have not been eligible for reimbursement.

But Los Angeles is starting to rethink that. In 2015, L.A. County changed how care could be reimbursed in My Health LA, the County program that serves poor residents ineligible for other coverage. The clinic must demonstrate that patients get their routine needs met, but they do not need to record a visit in order to receive payment for a patient.

Clinics who provide care for My Health LA (MHLA) patients receive a fixed monthly amount based on the estimated average cost of care for each patient who chooses them as their medical provider. The County determined the monthly payment to clinics by estimating the average number of visits those in the program would need, multiplying that number by an average visit reimbursement rate, and dividing that amount across 12 months.

“Prior to MHLA, the County would give Watts a set allocation of visits that they could pay us for each year. It was never equal to the demand for services. By the end of the year, because our visit allocation had run out, we had to run a deficit in order to care for our enrolled patients. This wasn’t a logical way to provide care,” said Dr. Roderick Seamster, CEO of Watts Healthcare Corporation.

The clinic now receives a monthly sum of money to care for each of its MHLA-enrolled patients. 

As a result, there are no more lines, and no more running out of resources at the end of the year. Doctors can now provide patients needed care without the organization worrying about the clinic’s bottom line.

“In the previous county indigent care program, we were mandated to have a face-to-face visit in order to be reimbursed,” said Ana Grande, associate director of Clínica Romero. “With the implementation of MHLA, our providers are able to focus on patients with unattended chronic and comorbid diseases who truly need medical attention.”

Effort to change how Medicaid pays clinics hits snag

Clinics and partners across California are also working to change how payments are made in Medi-Cal, California’s Medicaid program.

In 2015, Senate Bill 147 passed. The legislation would allow California’s Department of Health Care Services to conduct a three-year pilot test of how it pays public and private clinics. In general, the bill’s payment approach is similar to that described in My Health LA, with a monthly set fee or “capitation” taking the place of per visit payments.

Five clinics in LA volunteered to be test sites for a pilot of the new payment program authorized by SB 147. These clinics improved data systems to track and report on patients beyond the standard visit, invested in team-based approached to care, and came up with forecasts of how this new approach would impact clinic finances.

Unfortunately, efforts to implement SB 147 have ultimately stalled. The state was unable to reach agreement with the Centers for Medicaid and Medicare Services on an amendment needed to launch the program. LA’s health clinics are still optimistic that SB 147 will move forward, although the timing of when that will happen remains uncertain.

Absent federal approval to reform our payment system, clinics are still determined to find alternative ways to pay for the care of Medicaid patients. By moving away from a system in which payments are tied to patient visits, clinics can provide better quality care at a lower cost.

[Photo by wp paarz via Flickr.]