Table Of ContentENHANCING PRIMARY CARE
SYSTEMS THROUGH FEDERALLY
QUALIFIED HEALTH CENTERS
NATIONAL
State Health
GOVERNORS'
Policy Studies
ASSOCIATION
Reports
T
ENHANCING PRIMARY CARE
SYSTEMS THROUGH FEDERALLY
QUALIFIED HEALTH CENTERS
State Health
Policy Studies
Reports
by L. Carl Volpe and Janine M. Breyel
Health Program
Human Resources Policy Studies
Center for Policy Research
National Governors' Association
The National Governors' Association, founded in 1908 as the National Governors' Conference, is the instrument
throughwhich thenation's Governorscollectivelyinfluencethedevelopmentand implementationofnational policy
and apply creative leadership to state issues. The association's members are the Governors of the fifty states, the
commonwealthsofthe Northern Mariana Islandsand Puerto Rico, and the territories ofAmerican Samoa, Guam,
and the Virgin Islands. The association has seven standing committees on major issues: Agriculture and Rural
Development; Economic Development and Technological Innovation; Energy and Environment; Human Re-
sources; InternationalTradeandForeign Relations; JusticeandPublicSafety; andTransportation, Commerce,and
Communications. Subcommitteesand task forcesthat focuson principal concernsofthe Governorsoperatewithin
this framework.
Theassociationworkscloselywith the administration and Congressonstate-federal policy issuesthrough itsoffices
inthe HalloftheStatesin Washington,D.C. Theassociationservesasavehicleforsharingknowledgeofinnovative
programsamong the statesand provides technical assistance and consultantservices to Governorson awide range
ofmanagement and policy issues.
The Center for Policy Research is the research and development arm ofNGA. The center is a vehicle for sharing
knowledge about innovative state activities, exploring the impact of federal initiatives on state government, and
providingtechnicalassistancetostates.Thecenterworksinanumberofpolicyfields,includingagriculture,economic
development, education, environment, health, social services, training and employment, trade, and transportation.
ISBN 1-55877-129-8
©
1991 by the National Governors' Association
444 North Capitol Street
Washington, D.C. 20001-1572
Preparationofthisdocumentwassupported bya CooperativeAgreementwith the BureauofHealth Care Delivery
and Assistance, Health Resourcesand ServicesAdministration, Public Health Service, U.S. Department ofHealth
and Human Services (Project #CSU110002-01-0). Ms. Lynn Spector is the Project Officer.
Allopinionsexpressed herein are those oftheauthorsand donot represent those ofthe DepartmentofHealthand
Human Services or the National Governors' Association.
Reproduction ofany part ofthisvolume is permitted forany purpose ofthe United States Government.
Printed in the United States ofAmerica.
Contents
Foreword v
Acknowledgements
vii
Executive Summary ix
THE CHANGING CONTEXT
1
Community and Migrant Health Centers and Health Care for the Homeless
Programs
1
Community and Migrant Health Centers and Medicaid 2
ISSUES AFFECTING FQHC IMPLEMENTATION
7
Scope of Services and Provider Definitions 7
Cost-Based Reimbursement and Payment Methodologies 10
FQHC
Federal Requirements for Attaining Status 15
COORDINATION OF PRIMARY CARE PROVIDERS AND MEDICAID
21
Illinois 21
North Carolina 22
Texas 23
SUMMARY AND CONCLUSIONS
25
Endnotes 27
Appendix A: Forum Agenda 29
Appendix B: Forum Participants 31
I
[
Foreword
In fall 1990 the Bureau of Health Care Delivery and Assistance (BHCDA) of the
U.S. Public Health Service entered into a cooperative agreement with the National
Governors' Association (NGA). The purpose of the agreement was to assist states
and the federal government in taking full advantage of the opportunities presented
by the Omnibus Budget Reconciliation Act of 1989 (OBRA-89). This legislation
established a new class of Medicaid providers called federally qualified health
FQHC
centers (FQHCs) and a new cluster of services called services.
On February 28, 1991, NGA convened a forum to enable key federal, state,
and local health care administrators and other interested parties to discuss policy and
FQHC
implementation issues of the legislation and regulations. The forum was
intended to provide an opportunity for policymakers and others to voice their con-
cerns and perspectives, rather than resolve any of the issues raised. More than
seventy-five people attended, representing the U.S. Public Health Service, Health
Care Financing Administration, community and migrant health centers, state
Medicaid agencies, state primary care associations, state and local health depart-
ments, and advocacy and public interest groups.
The forum was structured to permit open discussion ofthe implications of the
FQHC provisions in OBRA-89 and subsequent legislation for the operations of
community and migrant health centers, Medicaid, and local public health programs.
Topics included the scope of services, methods of payment, and eligibility of
providers. The forum concluded with a panel discussion of state coordination and
integration issues.
This report summarizes the presentations and deliberations of the forum
FQHC
based on a transcript of the meeting. Because issues are complex and inter-
dependent, many received only cursory attention at the forum. Moreover, the discus-
sion of some issues was confusing and several important issues were not covered.
With some caution, the authors have tried to untangle the discussions, elaborate on
some points made by participants, and raise issues that were not mentioned. It is
hoped that as a result of these efforts, the report is a more complete and useful
document.
L. Carl Volpe, Policy Analyst
Janine M. Breyel, Senior Research
Assistant
National Governors' Association
v Foreword
Acknowledgements
The forum and report on implementing federally qualified health centers are part of
a project of the Health Program unit, Center for Policy Research, National
Governors' Association. The project is supported through a cooperative agreement
with the Bureau of Health Care Delivery and Assistance (BHCDA), U.S. Public
Health Service.
At the Bureau of Health Care Delivery and Assistance, the authors want to
thank Rhoda Abrams, Richard Bohrer, and Bonnie Lefkowitz for their continued
support ofthis project. Special thanks go to Lynn Spector, the project officer, for her
ongoing guidance and valuable input.
The authors also are grateful to all who participated in the policy forum. Their
candid comments and observations brought new insights to a complex topic. Robert
Harmon of the Health Resources and Services Administration, U.S. Public Health
Service; Marilyn Gaston of BHCDA; and Christine Nye of the Medicaid Bureau,
Health Care Financing Administration (HCFA) must be thanked for their leader-
MDS
ship. Deborah Lewis-Idema of Associates and Christine Ferguson ofthe Office
of Senator John Chafee graciously contributed their historical perspective.
The panelists at the forum deserve special recognition: William Hiscock
(HCFA); Sara Rosenbaum (Children's Defense Fund); Vernon Smith (Michigan
Medicaid); Bernard Truffer (HCFA); Kent Roner (Utah Medicaid); Katie
Kiedrowski (National Association ofCommunity Health Centers); Bonnie Lefkowitz
(BHCDA); Maria Montenaro (Cranston, Rhode Island, Health Center); Steve
Shore (North Carolina Primary Care Association); Bernie Patterson (North Carolina
Office of Rural Health and Resource Development); Lon Berkeley (Illinois Primary
Care Association); Theresa Stoica (Illinois Medicaid); Jose Camacho (Texas
Primary Care Association); and Joseph Branton (Texas Medicaid).
Katie Kiedrowski, Bernard Truffer, David Wargo (HCFA), and Anne Ford
(Presidential Management Intern, U.S. Public Health Service) are due special thanks
for patiently reviewing early drafts of the report.
At NGA, appreciation is extended to John Luehrs, Director of the Health
Program, for his guidance in all aspects of this project. The authors want to thank
Stephanie Cook-Hall, Amanda McCloskey, Kathleen Miller, and Barbara Tymann
for their assistance with the forum and report. As always, thanks to Karen Glass for
her editorial assistance.
Finally, special appreciation is extended to Ian Hill, formerly of NGA, who
served as project officer for the cooperative agreement and was instrumental in the
development of the forum. His insights and efforts contributed to the overall success
of the project.
vii Acknowledgements
