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Alaska health centers press state to fix Medicaid FQHC payment process, warn access could fall if unresolved
Summary
Representatives of Alaska’s network of Federally Qualified Health Centers told the Senate Health and Social Services Committee that state Medicaid payment practices have been out of compliance with federal requirements and that fixing the “change of scope” rate process is urgent to avoid reductions in services.
Representatives of Alaska’s community health centers told the Senate Health and Social Services Committee on Feb. 18 that state Medicaid payment procedures for Federally Qualified Health Centers (FQHCs) need correction and faster implementation to avoid reductions in services.
APCA CEO Nancy Merriman told the committee that Alaska’s 27 health center organizations and two “look-alikes” together serve thousands of patients and provide comprehensive primary care, dental, vision, behavioral health and substance-use treatment regardless of a patient’s ability to pay. “When a patient walks into their local health center, they will be served regardless of their ability to pay,” Merriman said.
The centers argued the dispute centers on how Alaska’s Medicaid program calculates and adjusts the bundled, per-visit FQHC rate when a center has a “change in scope” — a clinically significant change in the mix, intensity or duration of services the center provides. Merriman said APCA’s legal and financial review identified instances in which the department had paid centers in ways that were not consistent with the state plan, state regulations and federal rules. She said APCA and the Department of Health have met in work sessions for more than 18 months and that some agreement has been reached, but that several items remain unresolved.
Lisa Aquino, CEO of Anchorage Neighborhood Health Center and chair of APCA’s FQHC Medicaid payment task force, described concrete examples of scope changes that are not being captured by the current rate process. “When we first opened, we didn’t have an OB case manager,” Aquino said. “That OB case manager calls the patient on a regular basis, assures that they're coming in for their appointments, follows up on potential issues, important labs, and other critical health issues. That part of our service is not reflected in our original PPS rate.” She said Anchorage Neighborhood Health Center has seen a 37% increase in visits over three years and a growing share of senior patients whose care is more resource-intensive.
Joshua Gilmore, CEO of Sunshine Community Health Center and APCA board chair, said capturing those additional costs is important not only for clinic sustainability but for systemwide savings and community supports. “The impact that we have as providers . . . is more than just boots on the ground providing health care or behavioral health or dental services,” Gilmore said. He described health centers’ role in connecting patients to transportation, day care, food pantries and other supports that affect outcomes.
Committee members asked for clarification about “look-alikes” (organizations that meet health center program requirements but do not currently receive federal health center grant funding) and about the number and distribution of clinic sites across the state; APCA displayed a map the group said shows more than 200 clinic locations including mobile and school-based sites. Merriman and Aquino urged the department to publish clear guidance and procedures allowing health centers to request retroactive or prospective rate adjustments when a change in scope has occurred, while the department completes any regulatory revisions needed to implement the agreed changes.
Merriman told senators that if the change-in-scope process is not corrected, health centers would be forced to curtail services rather than expand them. “We would decrease access at the end of the day,” she said, adding that the consequences would affect “thousands of Alaskans.”
The committee did not take formal action on payment policy at the hearing; members heard the APCA presentation and indicated continued engagement. Department of Health representatives were expected to present separately on the issue during the same hearing.
APCA left committee members with requests that the Department of Health: (1) expedite regulatory or administrative steps to implement agreed corrections; (2) publish clear, usable procedures for change-of-scope rate adjustments so centers can apply while rulemaking proceeds; and (3) finalize rate adjustments consistent with agreed definitions and examples so centers receive relief.
APCA and center leaders offered to provide additional technical and financial analysis to the department and committee to inform the timeline and mechanics of any adjustments.
