JUNE 2021 Issue Brief Risky Business: California Health Centers Weakened by the COVID-19 Pandemic Prepare for the Future T he COVID-19 pandemic has had a profound - were the organizations disproportionately impacted. impact on the entire health care delivery system. Health centers that serve the highest proportion of Medi- For Federally Qualified Health Centers (FQHCs),1 Cal patients sustained almost all the financial losses. which are foundational to the nation's primary care safety net, this was especially true. The core mission of health The Health Resources and Services Administration (HRSA) centers is to provide primary and preventive care to has awarded more than $1 billion to 175 California health low-income and underserved populations. Many health centers through American Rescue Plan Act Awards.4 The centers have expanded services to offer both behav- combination of federal relief funding paired with tem- ioral health and oral health care services. In 2020 alone, porary policy changes, such as allowing for expanded California's health centers provided care to 7.4 million reimbursement for telehealth services, provided a lifeline patients, or one in five Californians.2 that helped FQHCs remain afloat and should help cover a significant portion of prior losses and new costs. In the In response to the COVID-19 pandemic, health centers coming months and years, it will be important to monitor quickly adapted care models and operations, repur- the financial health of FQHCs and the safety-net health posing staff, providing outreach, leveraging telehealth care system. However, temporary federal relief and policy modalities, and remaining open for emergencies. The changes do not solve the root issues that caused health pandemic reinforced that FQHCs are nimble and can centers to be so vulnerable in the face of the pandemic. reach patients in creative ways. As face-to-face visits (the primary mechanism for FQHC reimbursement) declined Because health centers serve mostly people with low during the pandemic, however, health centers faced a incomes and communities of color, it is important to particularly challenging time financially. The financial ensure that health centers' operating model is less vul- stability of health centers is an important consideration nerable to fluctuations in in-person visit volume. During given that their programming benefits patients and the the pandemic, such fluctuations led to downsizing and Medi-Cal program by supporting access, advancing temporary closures at 13% of California's FQHC sites.5 health equity, and working toward broader population Such trends threaten access to care and health equity. health. This report summarizes policy options that have the The COVID-19 pandemic demonstrated how the current potential to improve FQHC stability, address health FQHC payment methodology is an increasingly outdated equity, and ensure access to a broader range of services payment model that is ripe for change. New financial in the long term, including the following: analysis reveals that - whether measured by revenue, A Modernizing payment to FQHCs through an number of patients, or number of sites - the largest health centers in the state bore the brunt of the finan- alternative payment model (APM) cial losses directly resulting from COVID-19.3 In addition, A Recognizing the value of all telehealth modalities, those that offer the broadest array of services - health including telephone calls centers that are trying to meet the medical, dental, men- tal health, public health, and social service needs of A Making investments in the health care workforce the community, including large and mid-sized entities California's efforts to develop an APM may prove par- This third report includes findings and considerations ticularly important. An APM could result in more financial developed through additional financial analysis of health predictability while providing greater operational flexibil- centers during the COVID-19 pandemic and discusses the ity for health centers that want to customize care delivery characteristics of the California health centers hardest hit to uniquely meet the needs of their patient population by the pandemic prior to the March 2021 federal funding and achieve health equity goals. FQHCs could provide provided by the American Rescue Plan Act. This paper nontraditional services not currently reimbursed under also discusses how the COVID-19 crisis magnified issues traditional face-to-face visits, such as integrated primary related to health disparities and access to care, as well as and behavioral health visits on the same day, group vis- the policy and reimbursement considerations that could its, email and phone visits, community health worker strengthen the FQHC model and ensure access to high- outreach, case management, and coordination of care quality, team-driven care for low-income Californians. across systems.6 The financial analysis was also recently released in a sep- arate issue brief and infographic titled The Pandemic's The policy considerations are based on financial analy- Financial Impact on California's Community Health sis of health center data, insights from an advisory panel Centers: Largest Centers Suffer Significant Losses.10 of California FQHC experts, and reflections from sev- eral interviews with health center executives conducted between October 2020 and February 2021. Health cen- Financial Analysis ter executives were selected based on recommendations The following tables reflect findings from financial by the advisory panel and reflect the diversity of health analyses of the FQHC experience in California during centers in the state, including large and small health cen- the COVID-19 pandemic and the characteristics of the ters; urban, suburban, and rural health centers; northern, California health centers hardest hit by the pandemic central, and southern health centers; and health centers as of December 2020. The analyses estimate health serving different racial and ethnic populations.7 center operating losses resulting from a precipitous decline in patient visits due to stay-at-home orders; addi- tional COVID-19-related costs incurred by the centers, Context for This Report including personal protective equipment (PPE), facility This report is the third in a series designed to provide modifications, and the rapid deployment of telehealth a window into the financial and operational impact technology; and offsetting federal relief from various of the COVID-19 pandemic on California's FQHCs. agencies, including HRSA, the Department of Health and The first report, California Federally Qualified Health Human Services (HHS), the Federal Trade Commission, Centers: Financial and Operational Performance and the Small Business Administration. The analyses Analysis, 2016 – 2019 (PDF),8 released in November 2020, incorporate health center financial audits as well as oper- provided an aggregated financial and operational pro- ational and utilization data reported by the Uniform Data file of California FQHCs, and illustrated some of the System in 2018 and 2019; survey data collected by HRSA, drivers of declining financial performance prior to the Capital Link, and the National Association of Community onset of the pandemic. The second report, Holding On: Health Centers (NACHC); and estimates of federal relief How California's Health Centers Adapted Operations funding provided between April and December 2020. and Care for Patients During the Pandemic,9 released For more information about the methodology, please in February 2021, analyzed the financial impact of the see the second report in this series, Holding On.11 COVID-19 pandemic on California's health centers from March through December 2020. The report identified The largest health centers in California (those in the "Top several key factors that enabled California's health centers Quartile" as indicated in Table 1) experienced the great- to weather the financial strain caused by the pandemic, est financial losses between April and December 2020 thereby enabling them to continue to serve patients at a due to the pandemic. The two most important factors time when access to health care was limited by shelter- that appear to have financially disadvantaged larger in-place directives. health centers across all California FQHCs were the lack California Health Care Foundation www.chcf.org 2 of Paycheck Protection Program (PPP) loans and the level centers of all sizes and across all regions were fairly tightly of HRSA Bureau of Primary Health Care (BPHC) grant clustered, with an average visit decline of about 19% to funding. These funding streams greatly favored smaller 26%, and 49% to 56% of all visits conducted virtually. health centers (the "Bottom Quartile[s]" in Table 1). Table 2 outlines the results of the loss analysis by region Recognizing the importance of small health centers is an and urban/rural location (see page 4). important policy objective; they often serve as a lifeline for rural and underserved communities, so ensuring their While some health centers had net gains through viability in communities that might otherwise completely December 2020, COVID-19 relief funds received by that lack access to care is essential. time were intended to cover costs into 2021 - so any "surpluses" some health centers may have realized are While there were some minor differences in the decline likely to ultimately be used to cover pandemic-related in the average number of visits (which affects revenues) losses in 2021. The methodology for allocation of the and the average percentage of visits conducted virtually, American Rescue Plan Act Awards12 varied significantly Table 1. Impact of COVID-19 Pandemic on FQHCs, by Demographic Factors TOP QUARTILE BOTTOM QUARTILE(S) Federal PPP funding PPP loans. Many of the largest health centers were not PPP loans. 100% of health centers in the and BPHC grants eligible to apply for PPP funding, and these centers sustained bottom three quartiles received a PPP loan. the largest financial losses. Only 42% of health centers with BPHC grant funding. BPHC grant funding revenues above $36.7 million (those in the fourth quartile) averaged $153 per patient for the smallest received a PPP loan. health centers in terms of revenue size BPHC grant funding. The largest centers (those in the (those in the first quartile). fourth quartile) received an average of $44 per patient. Revenue FQHCs with revenues in excess of $36.7 million in 2019 The lowest two quartiles of health centers, absorbed 95% of the total losses in 2020, totaling approxi- those with revenues below $16 million, had mately $557 million (equal to an 11% operating loss). combined surpluses totaling $64 million (equal to an 8% operating gain). Number of patients The top quartile of health centers, those with more than The lowest quartile of health centers, those 31,000 patients in 2019, absorbed 97% of losses, totaling with fewer than 6,500 patients, had estimated approximately $547 million (a 12% loss). surpluses totaling $41 million (a 17% gain). Number of sites The top quartile of health centers, those with between Health centers with three or fewer sites had 14 and 52 sites, absorbed 91% of losses, totaling collective surpluses of $32 million (a 5% gain). $506 million (a 12% loss). Proportion of Health centers that serve the highest proportion of Medi-Cal The 51 health centers that served fewer than Medi-Cal patients patients sustained almost all the financial losses, totaling an 3,555 Medi-Cal patients in 2019 (those in estimated $549 million, with 96% of losses concentrated in the the first quartile) had an aggregate gain of fourth quartile, representing those centers serving between $42.5 million. They experienced average gains 20,266 and 243,421 Medi-Cal patients in 2019. This group of $222 per patient. sustained average losses of $145 per patient, based on total patients served that year. Service mix Health centers with the most diversified service mix sustained Dental visits composed only 1% of visits for the the greatest financial losses. quartile with the lowest losses or gains. The quartile of health centers with the highest losses also had the highest proportion of dental visits (13% in 2019). The "high-loss quartile" also provided the highest proportion of enabling visits (4% vs. 1% in 2019) and the highest proportion of "other professional visits" (5% vs. 2%). Both groups of health centers provided an equal proportion of mental health service visits (5% in 2019). Risky Business: California Health Centers Weakened by the COVID-19 Pandemic Prepare for the Future www.chcf.org 3 Table 2. Losses, by Region or Location HIGH-LOSS QUARTILE(S) OR GROUPS LOWER-LOSS QUARTILE(S) OR GROUPS Region Regionally, the losses were more balanced, although the The San Francisco Bay Area and Los Angeles regions southern and central regions sustained the heaviest total were in the middle in terms of revenue losses per losses as well as the heaviest per-patient losses. patient, at $70 and $66, respectively. Losses were highest for health centers in the southern region, Centers in the northern region sustained the lowest at $179 million in total and $150 per patient. Seventy percent net losses, at $21 per patient. of the patient population in the southern region was enrolled in Medi-Cal in 2019. In 2019, health centers in the central region - with 66% of patients enrolled in Medi-Cal - collectively lost $163 million, or $101 per patient. Health centers in the Sacramento Valley region were close behind, with losses at $100 per patient. Seventy-three percent of Sacramento's patient population was enrolled in Medi-Cal in 2019. Urban/rural Ninety-four percent of financial losses were concentrated in Six percent of financial losses were sustained by rural urban centers. centers. Rural centers were greatly aided by a special distribution from HHS's Provider Relief Fund targeted for rural providers. from earlier awards, greatly increasing the funding avail- the breadth of services health centers provide. Full APM able to the largest health centers. This funding will implementation would enable health centers to care provide vital short-term relief to address the precarious for patients in new ways and protect them from finan- financial position of many centers resulting from the pan- cial downturns when in-person visit volume fluctuates demic, while also providing support for a massive vaccine due to unforeseen circumstances, such as the COVID-19 deployment effort. pandemic. Over the last several years, many health centers have Policy Options That May expanded their business lines beyond traditional primary Improve Financial Stability care to include dental, mental health, and substance use disorder treatment services, and some have developed of Health Centers programs aimed at serving people experiencing isolation and homelessness. These services would be well sup- Modernizing Payment to FQHCs ported by an APM that values greater integration across Through an Alternative Payment service lines. Integrated care models support more com- Model (APM) prehensive care and facilitate "one-stop shopping" for According to the NACHC, more than 24 states have individuals and families. There is a strong evidence base adopted an APM for Medicaid enrollees.13 Discussion for integrated care models that allow for warm hand- of widespread adoption of an FQHC APM has been offs between providers, which in turn result in reduced underway for several years in California.14 Under an APM, patient no-show and cancellation rates.15 FQHCs would no longer be paid based on in-person visits, but instead would receive a set per-patient per- Interviews with health center executives revealed inter- month payment. By implementing an APM that aligns est and urgency in transitioning to an APM. Ralph Silber, payments with the comprehensive services provided by executive director of the Alameda Health Consortium, FQHCs, state policymakers can recognize the value and expressed enthusiasm for getting to a place "where we California Health Care Foundation www.chcf.org 4 have more predictability and flexibility about revenue - Foundational to making improvements in health care we would be able to get off this hamster wheel where we delivery and addressing health equity is access to data. are only getting paid for face-to-face encounters with a Having the ability to analyze data about patient health and licensed provider." treatment history at the individual and population level is essential to inform quality improvement initiatives and Although FQHCs provide both primary care and mental improve health outcomes. Across the state, many health health services, they cannot currently be reimbursed for centers, particularly smaller and rural safety-net provid- both if services are provided on the same day, limiting ers, lack the infrastructure to optimize technology.19 This the advantage of colocation and integrated care deliv- is due to both the prohibitively expensive investment ery.16 An APM that supports broader integration would required to update outdated electronic health record resolve same-day billing challenges. Many states allow technology and the lack of broadband access, both of FQHCs to bill for medical, behavioral health, and den- which limit analytic and data-sharing potential and put tal services on the same day, but California only allows such health centers at a disadvantage.20 There is oppor- same-day billing for medical and dental services.17 In tunity for improved investment in technological capacity addition to strengthening the financial stability of health among FQHCs to level the playing field. centers and encouraging integration, expanding access to behavioral health services acknowledges an increased Recognizing the Value of All need and can help reduce stigma when such services are offered in the same setting as physical health services. Telehealth Modalities, Including Telephone Calls State policymakers can also promote collaboration for Prior to March 2020, adoption of telehealth across the care delivery transformations between health centers nation and within FQHCs was limited, in part due to and Medi-Cal managed care plans since more than 80% reimbursement and technological limitations. However, of Medi-Cal enrollees are in Medi-Cal managed care the COVID-19 pandemic created both an opportunity plans.18 For example, as part of the California Advancing and a necessity to leverage alternatives to in-person and Innovating Medi-Cal (CalAIM) initiative, the state is services and to support physical-distancing goals. Once considering In Lieu of Services (ILOS) options. ILOS are the federal government and states adjusted the pay- flexible wraparound services that a Medi-Cal managed ment and coverage policies for telehealth, FQHC visits care plan could pay for in lieu of an avoided Medi-Cal increased (though they have still not returned to prepan- expense, such as an unnecessary emergency room demic levels in most cases).21 As part of its response to visit. One of the ILOS options is Housing Tenancy and federal flexibilities offered to states in response to the Sustaining Services. Under this option, Medi-Cal man- pandemic, the California Department of Health Care aged care plans may enter contractual relationships with Services (DHCS) authorized payment parity to FQHCs for organizations such as FQHCs that are well positioned to telehealth services provided to Medi-Cal patients. This offer wraparound services to patients in need. means that FQHCs are temporarily receiving the same Medi-Cal payment for services provided in-person, by As an example, Neighborhood Healthcare, based in video, or by phone while the public health emergency Escondido, has a partnership with a community-based is in effect. organization that embedded a Complex Care Resource Specialist on-site to provide employment, housing, In March 2020, FQHCs rapidly substituted in-person vis- recovery, and behavioral health support services. This its with both telephone and video visits. Telephone visits position - while important - is subject to the commu- were critical to FQHC patients. According to a RAND nity-based organization's resources. By leveraging the analysis comparing data from prepandemic to March ILOS option under CalAIM (assuming federal approval), to August 2020 for a group of FQHCs in California that Neighborhood Healthcare would have a more sustain- received funding to expand telehealth capacity, 48.1% able revenue stream to support this work. of primary care services were delivered in person, 48.5% Risky Business: California Health Centers Weakened by the COVID-19 Pandemic Prepare for the Future www.chcf.org 5 via telephone, and 3.4% via video. For behavioral health, More recently, the governor's "May Revision" to the state 22.8% of services were delivered in person, 63.3% via budget (PDF) 28 proposes a reduced rate for audio-only telephone, and 13.9% via video. Telephone visits peaked telehealth services. While it is an acknowledgment of the in April 2020, composing 65.4% of primary care visits and role of audio-only care, an APM would provide greater 71.6% of behavioral health visits.22 payment predictability for health centers. Decisions about which modality to use should be driven by patient Telephone-only visits increase access and are conve- needs and available technology. Telephone-based ser- nient for patients. A September 2020 consumer survey vices contribute to health equity and influence the extent conducted by the California Pan-Ethnic Health Network to which disparities in health and access to health care suggested that telehealth holds significant promise for for Californians with low incomes, who are disproportion- increasing access to care in communities of color, and ately people of color, begin to shrink or widen.29 RAND for making health care more patient centered.23 In some study authors found that while "telemedicine can serve cases, the shift to telehealth meant faster access to more as a tool to reduce disparities in health care access, . . . services, with scheduling and appointments occurring limiting reimbursement to video visits may actually on the same day. Neighborhood Healthcare, based increase them."30 in Escondido, implemented an open access model in October 2020, reserving same-day appointment slots for A recent study of more than 1,600 primary care and spe- new patients, which included telephone visits. cialty care practices within an integrated health system found that patients who were older than age 65; Black, Health centers were better able to maintain access to Hispanic, or Spanish-speaking; nonportal users; or from care during the first six months of the pandemic because areas with low broadband access were less likely to use of telehealth.24 Rakesh Patel, MD, chief executive officer video visits. The study concluded that institutions should at Neighborhood Healthcare, indicated that rapid access make concerted efforts to promote equitable access to to health center services reduced transportation barri- all telemedicine modalities.31 Telephone-based appoint- ers that previously led to no-shows, allowed for speedy ments also eliminate challenges with access to broadband medication adjustments, and resulted in better service as well as the risk of video visits exceeding patients' data for patients. plans. RAND's telehealth study leader acknowledged the conundrum that the quality of telephone-only visits may A February 2021 DHCS policy proposal extended most not be as high as other modalities, but that such flexibil- of the telehealth flexibilities established as part of the ity is important to ensure access to care for underserved public health emergency response and largely received populations.32 praise from health centers; however, it excluded reim- bursement of telephone-only visits for FQHCs.25 DHCS Long-term cost savings to the health care system may maintained that telephonic/audio-only visits are less also be a consideration for telephone-only visits. Jane costly and should not be reimbursed at the same rate as Garcia, chief executive officer of La Clínica de la Raza, an visits conducted in-person or through synchronous tele- FQHC based in Oakland, relayed the story of a 91-year- health modalities, which would be a requirement under old patient who was prescribed antibiotics during an Prospective Payment Systems.26 The policy recommen- after-hours telephone-based visit. The medications were dation stated that "DHCS recognizes the value of being promptly picked up and administered, and the doctor flexible in the use of telehealth across the health care followed up with the patient the next day. The telephone safety net, while protecting the integrity of the Medi-Cal visit saved Medi-Cal the cost of an emergency room visit program from a health care quality and fiscal perspec- and avoided an unnecessary inconvenience for an older tive."27 DHCS used the February policy proposal as an patient. opportunity to engage in discussions with health center stakeholders about telehealth in the context of an APM; those discussions are now underway. California Health Care Foundation www.chcf.org 6 Telephone-only visits complement the other inno- According to the California Future Health Workforce vative care delivery models that health centers are Commission report from 2019, within the next 10 years considering. Shasta Community Health Center, based in California is expected to have a shortage of over 4,100 Redding, is implementing a home monitoring program primary care providers and only two-thirds of the psychi- with supportive technology for patients who are medi- atrists needed.35 The report estimates that up to 75% of cally compromised. Comprehensive Community Health primary care services could be provided by nurse practi- Centers, based in Los Angeles, has new plans for a tioners and physician assistants, which are also expected mobile van, where telehealth can connect providers and to be in short supply by 2030 based on projected patients. Physicians will remain in clinics, but patients can demand and the number of providers per 100,000 resi- access laboratory and telehealth services through mobile dents, respectively.36 Further, there is a maldistribution of technology after visiting with mid-level staff about their providers, with certain provider types overrepresented health care needs. In this case, the health center is lever- in some areas and underrepresented in others, and the aging telehealth to extend the reach of the entire care demographics of the workforce do not align with the team while increasing access to individuals who might demographics of the state. For instance, despite repre- not otherwise easily make it into the clinic. senting nearly 40% of the state, the Latinx population composes just 7% of the physicians.37 Making Investments in the Health Investing in the health care workforce can have revenue Care Workforce and health equity benefits. The cost to replace a phy- Maintaining and growing a health care workforce has sician is estimated to be two to three times the annual been one of the biggest challenges FQHCs have experi- salary of the previous employee due to the cost of recruit- enced during the COVID-19 pandemic. All health center ing, lost billing revenue, and the time it takes to become executives interviewed indicated that the pandemic has efficient in the job.38 By improving representation of the exacerbated long-standing recruitment and retention workforce to reflect the population, health care provid- issues, which became even more acute due to frontline ers can close gaps in language barriers, improve cultural worker fatigue and burnout. Despite steps to retain work- competency, and strengthen the trust of patients.39 ers such as offering employees the opportunity to work from home, providing hazard pay, offering incentive pay- State investments in loan repayment, pipeline, and schol- ments, and providing additional time off, recruitment and arship programs can increase the number and diversity retention remain challenging. One health center execu- of people who enter health care safety-net professions tive remarked that potential medical assistant recruits and alleviate FQHC financial pressures. These strategies could earn more money by collecting unemployment are particularly important given the number of Health than by risking exposure to SARS-CoV-2 in the health Professional Shortage Areas (HPSAs) in California. The care setting. HPSA score is a HRSA-developed formula designed to allocate resources to states for primary care, dental care, A previous Capital Link report found that rapidly increas- and mental health care. California HPSAs include some ing staffing costs were the biggest driver of shrinking of the state's largest and fastest-growing regions, such margins for health centers between 2016 and 2019.33 as South Los Angeles, the San Joaquin Valley, and the Competition for providers accelerated, pushing up costs, Inland Empire. Almost one-third of Californians live in while reimbursements grew more modestly. During the a primary care HPSA,40 and according to the California pandemic, retaining staff became increasingly difficult, Future Health Workforce Commission report, approxi- as financial losses mounted and the pressures on staff mately 70% of those living in HPSAs are Latinx, African increased. Across the state, median personnel-related American, and Native American, highlighting serious expenses represented three-quarters of operating rev- concerns about the impact of California's workforce enue in 2019.34 shortage on health equity.41 Risky Business: California Health Centers Weakened by the COVID-19 Pandemic Prepare for the Future www.chcf.org 7 Many health centers cannot compete on salary alone for Pipeline programs can be designed to connect people recruitment. However, according to Jane Garcia from to professions in the safety net and build a workforce La Clínica de la Raza, loan repayment combined with that represents the racial and ethnic diversity of the mission is a strong recruiting tool. David Lontok, chief community. executive officer at Comprehensive Community Health Centers in Los Angeles, concurs, saying that loan repay- A study by USCF's Healthforce Center and Latinx Center ment is an important tool that allows his health center of Excellence found that the racial and ethnic diversity of to augment provider salary demands. As a major factor the state is not reflected in medical school enrollments, for health center recruitment, augmenting state invest- with significant underrepresentation of Latinx and Black / ment in loan repayment programs will alleviate one of African American physicians in California. The study attri- the major cost drivers in health center operations. butes this finding to Proposition 209, which prohibits use of affirmative action practices. This disparity demon- California has several existing loan repayment programs. strates an opportunity to implement strategies that will The National Health Service Corps (NHSC) remains a increase the racial and ethnic diversity of California medi- powerful tool for recruitment, with federal funds cov- cal schools.46 The California Future Health Workforce ering 100% of employee salaries combined with loan Commission report makes multiple recommendations to repayment. Federal data reveal that 72.3% of NHSC par- expand and scale pipeline programs to recruit and pre- ticipants serving in FQHCs continue to practice in HPSAs pare students from underrepresented and low-income 10 years later, making it a reliable strategy to retain clini- backgrounds for health careers starting as early as mid- cal staff.42 dle school. California is one of 41 states and the District of Columbia Scope of practice changes can also facilitate workforce that participate in the federal Student Loan Repayment innovations. While physicians are critical to health cen- Program (SLRP), which requires a 50% match by program ter operations, maximizing the skills of other health care participants.43 In addition, California's Office of Statewide providers - such as nurse practitioners (NPs), physician Health Planning and Development administers a number assistants, social workers, medical assistants, and com- of other loan repayment programs 44 for primary care and munity health workers - can help address capacity. other providers, some of which align with HPSA designa- Recent policy changes will help build capacity of other tions, and others such as the County Medical Services members of the team. In September 2020, California Program Loan Repayment Program, which prioritizes passed A.B. 890,47 which gives NPs independent practice high-need counties across the state.45 authority. Health centers were active participants in the development of the California Future Health Workforce One workforce policy consideration may be to have the Commission report and identified providing NPs with full state pay 100% of the debt instead of requiring the 50% practice authority as a significant benefit for FQHC work- match from the health centers. Some health plans, such force expansion. By allowing providers to practice at the as L.A. Care, have grant programs that provide the match top of their license, the independent practice authority on behalf of the health center. While such investments may be effective in recruiting NPs from out of state. are helpful, health centers consider this a short-term solution because health plan discretionary spending Jane Garcia of La Clínica de la Raza discussed how the programs are subject to reserves that could be cut back new scope of practice authority has increased capacity during economic downturns. in the delivery of telehealth and freed up time for phy- sicians who no longer need to supervise or sign off on In addition to loan repayment programs that allow health NP decisions. Some health center executives, however, centers to recruit individuals who are already trained, indicated reluctance on the part of their staff, includ- longer-term investments could be used to increase the ing NPs themselves, about readiness for the transition. number of people who enter health care professions. This speaks to the fact that policy change is not enough. California Health Care Foundation www.chcf.org 8 Practices need to thoughtfully evaluate opportunities behavioral health, dental care, and social services, as well for training and workflow modifications to realize the full as serving clients beyond the clinics' walls. Modernizing potential of workforce flexibilities. FQHC payment policies through adoption of an APM can facilitate service delivery and workforce innovation Scholarship programs aimed at cultivating health pro- across the state. fessions in underserved areas are another important workforce development tool. By expanding scholarships Continued flexibility to provide telephone-only visits is for qualified students who pursue priority health pro- another strategy that may help support FQHC financial fessions and locate in underserved communities, such stability, facilitate patient access, and address health as the Emerging California Health Leaders Scholarship disparities across the state. Furthermore, an important Program and Programs in Medical Education, California consideration to help bolster health center access and can recruit qualified individuals who might not otherwise address health equity is investment in the state's health be able to afford such an education. workforce, particularly those individuals and entities who provide care as the state's safety net. Combined, these Research by the Healthforce Center at UCSF suggests policy and reimbursement changes can help stabilize that "American Indian, Black, and Latino graduates are health center operations and long-term sustainability. more likely to have educational debt than White gradu- ates and more likely to have debt of $100,000 or more The health centers that serve the highest number of [while] Black and Latino dental school graduates are also Medi-Cal patients face the most financial risk going for- more likely to have educational debt than White gradu- ward. That is why this moment, when health centers are ates."48 The report suggests that the decision to take on entering the postpandemic future, is particularly impor- large sums of debt may influence individuals' decision tant to consider policy and reimbursement options that to pursue career pathways that help pay off debt more may ensure health centers can continue to provide much- quickly. In addition, the potential for such debt may deter needed equitable access to care for all Californians. some from entering health professional schools entirely. Therefore, in addition to loan repayment programs, the paper discusses the potential for scholarship programs that reduce or eliminate tuition expenses for students of specific racial and ethnic backgrounds and/or make tar- geted reductions based on commitments to practice in specific areas of need.49 Conclusion Although the significant infusion of federal dollars strengthened health centers in recent months, the pan- demic has demonstrated the fragility of long-standing FQHC financial health. Further, temporary flexibilities have highlighted the potential to improve equitable access to care. Policymakers may want to consider strate- gies that will insulate FQHCs from unexpected volatility in in-person patient visit volume in the future, and acknowl- edge the breadth and depth of services provided by health centers to low-income and underserved commu- nities. Many health centers have significantly increased services beyond traditional primary care to include Risky Business: California Health Centers Weakened by the COVID-19 Pandemic Prepare for the Future www.chcf.org 9 About the Authors Endnotes Carol Backstrom, MHA, is the vice president for Medicaid 1.FQHCs are outpatient clinics that qualify for specific reimbursement systems under Medicare and Medicaid. They Policy and Programs, and Lauren Block, MPA, is a princi- include federally funded health centers known as "Section 330 pal for Medicaid Policy and Programs at Aurrera Health grantees" and those that meet certain federal requirements but Group, a mission-driven national health policy and com- do not receive federal grant funding, known as "Look-Alikes." In munications firm based in Sacramento. Allison Coleman, this document we refer to all types as "health centers." MBA, is the chief executive officer of Capital Link, a 2."CHC Data and Reports," California Primary Care Assn., national nonprofit organization focused on strengthen- accessed May 2021. ing FQHCs - financially and operationally - in a rapidly 3.Allison Coleman and Carol Backstrom, Holding On: How changing marketplace. Capital Link helps health centers California's Health Centers Adapted Operations and Care for Patients During the Pandemic, California Health Care Foundation plan for sustainability and growth, access capital, improve (CHCF), February 2021. and optimize operations and financial management, and 4."California American Rescue Plan Act Awards," Health Resources articulate their value. & Services Administration (HRSA), last reviewed April 2021. 5.Coleman and Backstrom, Holding On. Acknowledgments CHCF and the authors would like to thank the following 6.Greg Howe, Tricia McGinnis, and Rob Houston, Accelerating Value-Based Payment in California's Federally Qualified Health people for their contributions as part of the advisory Centers: Options for Medicaid Health Plans (PDF), Center for panel that informed this paper and the selection of Health Care Strategies, April 2019. health center leaders who participated in interviews. The Pandemic's Financial Impact on California's Community 7. Advisory panel members included Louise McCarthy, Health Centers: Largest Centers Suffer Significant Losses, CHCF, president and CEO, Community Clinic Association of March 2021. Los Angeles County; Jackie Bender, former vice presi- California Federally Qualified Health Centers: Financial and 8. dent of policy, California Association of Public Hospitals Operational Performance Analysis, 2016 – 2019 (PDF), Capital Link, 2020. and Health Systems; Andie Martinez Patterson, senior vice president, Strategy, Integration & System Impact, 9.Coleman and Backstrom, Holding On. California Primary Care Association; and Bobbie 10.The Pandemic's Financial Impact. Wunsch, founder and partner, Pacific Health Consulting 11.Coleman and Backstrom, Holding On. Group. 12."California Awards," HRSA. About the Foundation 13.Health Centers and State Environments 2018 Chartbook (PDF), National Assn. of Community Health Centers (NACHC), 2019. The California Health Care Foundation is dedicated to 14.Time to Modernize Payment to Health Centers: How Old Rules advancing meaningful, measurable improvements in the Jeopardize Patients During the COVID-19 Pandemic, CHCF, way the health care delivery system provides care to the June 2020. people of California, particularly those with low incomes 15.N. D. Young et al., "Warm Handoff, or Cold Shoulder? and those whose needs are not well served by the status An Analysis of Handoffs for Primary Care Behavioral quo. We work to ensure that people have access to the Health Consultation on Patient Engagement and Systems care they need, when they need it, at a price they can Utilization," Clinical Practice in Pediatric Psychology 8, no. 3 (2020): 241– 46. afford. 16.Curt Degenfelder, Same-Day Billing for Medical and Mental Health Services at FQHCs: Estimating the Fiscal Impact, CHCF, CHCF informs policymakers and industry leaders, invests April 2020. in ideas and innovations, and connects with changemak- 17.Behavioral Health in Primary Care (PDF), National Assn. of ers to create a more responsive, patient-centered health Community Health Centers (NACHC), August 2018. care system. 18."Total Medicaid MCO Enrollment" (2018), KFF. 19.Jonah Frohlich, Eric Bartholet, and Jonathan DiBello, Why California Needs Better Data Exchange: Challenges, Impacts, and Policy Options for a 21st Century Health System, CHCF, March 2021. California Health Care Foundation www.chcf.org 10 20.Frohlich, Bartholet, and DiBello, Why California. 43."State Loan Repayment Program Grantee Awards Map," Health Resources and Services Administration, accessed May 19, 2021. 21.Ateev Mehrotra et al., "The Impact of COVID-19 on Outpatient Visits in 2020: Visits Remained Stable, Despite a Late Surge in 44.County Medical Services Program (CMSP) Loan Repayment Cases," Commonwealth Fund, February 22, 2021. Program (LRP) (PDF), Office of Statewide Health Planning and Development, accessed May 19, 2021. 22.Behavioral Health in Primary Care, NACHC. 45."Loan Repayment Programs," Office of Statewide Health 23.Equity in the Age of Telehealth: Considerations for California Planning and Development (OSHPD). Policymakers, California Pan-Ethnic Health Network, December 2020. 46.Alana Pfeffinger et al., Recovery with Limited Progress: Impact of California Proposition 209 on Racial/Ethnic Diversity of California 24.Lori Uscher-Pines et al., "Telehealth Use Among Safety-Net Medical School Matriculants, 1990 to 2019 (PDF), Healthforce Organizations in California During the COVID-19 Pandemic," Center at UCSF, December 2020. JAMA 325, no. 11 (2021): 1106 –7. 47.A.B. 890 (Cal. 2020). 25.Post-COVID-19 Public Health Emergency Telehealth Policy Recommendations (PDF), DHCS, February 2, 2021. 48.Toretsky, Mutha, and Coffman, Reducing Educational Debt. 26.Post-COVID-19, DHCS. 49.Toretsky, Mutha, and Coffman, Reducing Educational Debt. 27.Post-COVID-19, DHCS. 28."Health and Human Services," in Budget Summary: May Revision - 2021–22, State of California. 29.Rafael A. Gomez, Reimbursing FQHCs for Telehealth Post- COVID-19 Pandemic: Medi-Cal's Options, CHCF, January 2021. 30.Lori Uscher-Pines et al., "The Doctor Will Call Me Maybe: The Uncertain Future of Audio-Only Visits and Why We Need Them to Address Disparities," Health Affairs Blog, March 3, 2021. 31.Jorge A. Rodriguez et al., "Differences in the Use of Telephone and Video Telemedicine Visits During the COVID-19 Pandemic," American Journal of Managed Care 27, no. 1 (2021): 21–26. 32.RAND, "Nearly All Telehealth Appointments at Clinics for Lower- Income Americans Were Audio-Only, Raising Questions About Quality and Equity," press release, February 2, 2021. 33.California Federally Qualified Health Centers, Capital Link. 34.California Federally Qualified Health Centers, Capital Link. 35.Meeting the Demand for Health: Final Report of the California Future Health Workforce Commission, California Future Health Workforce Commission (Commission), February 2019. 36.Meeting the Demand, Commission. 37.Meeting the Demand, Commission. 38.Sara Berg, "How Much Physician Burnout Is Costing Your Organization," American Medical Assn., October 11, 2018. 39.Christopher Toretsky, Sunita Mutha, and Janet Coffman, Reducing Educational Debt Among Underrepresented Physicians and Dentists, Healthforce Center at UCSF, August 2019. 40."Shortchanged: Health Workforce Gaps in California – Region-by-Region Maps," CHCF, July 15, 2020. 41.Meeting the Demand, Commission. 42.Sebastian Negrusa et al., National Health Service Corps – An Extended Analysis (PDF), Lewin Group, September 27, 2016. Risky Business: California Health Centers Weakened by the COVID-19 Pandemic Prepare for the Future www.chcf.org 11