Does the Affordable Care Act Mean the End of NJ's Health Centers?
Monday, July 21, 2014
Six months into its first year, the Affordable Care Act is dramatically reshaping the country's health care sector. Enrollment is above expectations, and insurance companies are so happy with the numbers that more are entering the insurance exchanges next year.
So if more people have insurance now and so have access to more doctors and other health care providers, why is Newark's largest health center worried its doors might be closing?
"Hopefully we're going to be able to keep our doors open, but it's becoming a problem," said Dr. Alan Goldsmith. Goldsmith is president of the Jewish Renaissance Medical Center, a community health center with locations in Newark and Perth Amboy.
First, some background. Community health centers are, in essence, the primary care version of public hospitals. They're nonprofits, registered by the federal government to care for anyone who shows up looking for help.
In return, they're reimbursed by federal and state money. In the lexicon of health policy, it's called charity care; New Jersey spends about $40 million a year on the effort.
The program includes an important rule: Charity care is a payer of last resort. Providers are reimbursed only for patients who have no other choices. This leads to a crucial question: What about all those uninsured people who qualified for an Obamacare tax credit, but didn't sign up? Do they still get charity care? The answer depends on who you ask.
"It's very clear and it's been verbally told to us: ‘If a patient qualifies for the Affordable Care Act or for expanded Medicaid that they will not be seen on charity care at all,’" said Goldsmith.
Goldsmith said he's stuck between strict federal rules about which patients he must treat, and utter chaos at the state level, which is where he gets paid for that treatment.
After several attempts to get clarity on the state's reimbursement policy for treatment for those patients, a health department spokesperson would only tell WNYC that the rules are under review. Healthcare advocates said there are more questions than answers on a wide range of new rules and regulations that must be rewritten in light of Obamacare.
But Goldsmith said safety-net providers are eating the costs. "We probably dropped over a million dollars,” he said.
It's not just the charity-care payments. Community health centers are facing a host of financial challenges. There is, for instance, the state's backlog in processing tens of thousands of Medicaid applications. When patients sign up, providers start offering treatment right away. But they don't get paid until final approval. And that process is now stretching out for months — again, leaving the safety-net providers holding the bag.
At their current rate, Goldsmith said that JRMC, and community health centers like it, would have to close its doors before the end of the year.
Meanwhile, health centers everywhere are walking toward a larger financial cliff. The Affordable Care Act budgeted $11 billion to help them absorb millions of new patients coming out of the woodwork, some newly insured and some not. But that money runs out next year. Advocates are deeply concerned that a Republican Congress — which has been hostile to the law — will not approve new funding. A recent George Washington University study estimated the funding loss would reduce capacity by roughly 7 million patients nationally.
The Affordable Care Act may have strengthened the health care safety net for some — but the trick now is making sure new holes aren't torn open in the process.
This series is produced with support from The Healthcare Foundation of New Jersey.