On the eve of healthcare reform implementation, safety net clinics and health centers treating the most vulnerable people around the country are preparing for changes that could bring increased access to insurance coverage for many of their patients.

In review of the largest data set on clinics and health centers, Direct Relief found that health centers collectively treat more than 21 million people, 92.6 percent of whom live 200 percent below the federal poverty level (FPL), and 36 percent of whom lack health insurance.

The pending implementation of state health insurance exchanges and the expansion of Medicaid in some states are sure to change the current landscape.  In an effort to gauge its impact, Direct Relief contacted its network of health centers participating in the Replenishment Program to understand what changes providers are expecting and how they are preparing for the next implementation phase of the Affordable Care Act (ACA).

Survey Participants:

Today, Direct Relief’s Replenishment Program provides 14 qualified clinics and health centers in seven states a stable supply of prescription drugs for eligible low-income patients who lack health insurance.

All donated medicines are replenished bottle-for-bottle based on the past month’s drug utilization, providing a stable, reliable source of support to health care providers and the patients they serve.  Program drugs are generously donated by AbbVie Patient Assistance Foundation, Johnson & Johnson Patient Assistance Foundation, and the Novartis Patient Assistance Foundation.

It should be noted that the intention of the survey was to determine the anticipated impact of the ACA among Direct Relief’s current Replenishment Program partners.  Given the program’s current size, it is not intended to serve as a reflection of the ACA’s impact for all health centers.

Through its relationships with its clinic and health center partners, Direct Relief remains committed to understanding how the ACA will affect safety net providers more broadly.  Findings indicate wide variability – largely by geography and type of facility (e.g. free clinics will feel the impact differently than Federally Qualified Health Centers), making it difficult to generalize.

The survey below looks only at Direct Relief Replenishment Program partners and is largely represented in states where Medicaid will be expanded (California and Michigan).

Ten of the Replenishment health center partners participated in the survey; this is their profile:

• All are Federally Qualified Health Centers (FQHCs)
• Geographic distribution
  • California – 7
  • Michigan – 1
  • Missouri – 1
  • Texas – 1
  • In aggregate, these providers treat 191,643 uninsured patients.

Projected Uninsured Patient Volume:

When asked, all survey participants thought the proportion of uninsured patients at their health centers would decrease in 2014 in response to the ACA implementation. On average, participants expect:

• A decrease in their patient population that lacks health insurance (from a current average of 66% down to 31.8%) in 2014.  This rate is slightly below current national uninsured rates for FQHCs (36%).
• 31.5% of their patient population to qualify for Medicaid and 20.75% to qualify for other forms of insurance in 2014.  This compares to the current national rate of 40.8% for Medicaid patients.

The top two reasons providers thought patients would be ineligible for coverage and remain uninsured in 2014 were:

• Ineligible undocumented populations
• Unable to meet the federal poverty level standards for Medicaid

Overall, the greater the number of people without health insurance at the health center, the more likely the providers:

• thought patients would not qualify for Medicaid federal poverty level standards
• reported unfavorable state insurance circumstances
• reported a likely increase in needing Direct Relief support
• thought a greater number of patients would remain uninsured

How health centers are preparing for ACA implementation:

• Participating in county programs designed to transition and qualify patients into Medicaid
• Planning for patient education and hiring outreach nurses (or converting existing outreach staff into enrollment staff)
• Hiring a Patient Navigator or developing a dedicated  “insurance team”
• Working with their local Primary Care Association to ensure all state sites are signed up to be providers for the insurance exchanges
• Exploring the possibilities of participating in Medicaid programs
• Transitioning from a dispensary to a pharmacy to participate in Medicaid reimbursement

Geography matters:

Although expansion of the Replenishment Program is currently underway, as stated above, the sample size for this survey was small and heavily concentrated in California, a proactive state in ACA implementation and Medicaid expansion.  Therefore, conclusions regarding changes in insurance status cannot be extrapolated broadly.

To see how these findings compared across a larger sample, Direct Relief analyzed the results from a nationwide survey conducted earlier in the year, which was presented at the Center for Business Intelligence’s Patient Assistance Programs Conference.

Survey responses included a total of 350 clinics and health centers in 42 states and Puerto Rico.  These providers represent care for more than 2.7 million patients annually.

In review of the data from the participants, it is clear that understanding the ACA’s potential impact among safety net providers is highly geographically dependent, with the primary driver being whether the state is expected to expand Medicaid.

Direct Relief found that, for FQHCs, the geographic location is a critical factor in forecasting the impact of reform to the uninsured patient population.  This is largely due to the expectation that a portion of their current uninsured patient population will be covered by Medicaid in states that are expanding.

• FQHCs in states where Medicaid expansion is occurring were much more likely to think their uninsured patient population would decrease in 2014.

• FQHCs in states where Medicaid expansion is NOT occurring felt the opposite; they expect their uninsured population to increase in 2014.

• In contrast, free clinics, regardless of whether their state is expanding Medicaid, felt their uninsured patient population would remain about the same in 2014.

Conclusions

Although millions of uninsured patients will have access to health insurance in 2014, Medicaid will be a key issue affecting both coverage and access.  Provider feedback indicated that although many patients in expansion states will have access to insurance under Medicaid, there is a lack of willing Medicaid providers – particularly among private practitioners.

FQHCs are expected to be key access points for these patients in their communities.  For the estimated 29 million people that will remain uninsured (as estimated in February 2013 by the Congressional Budget Office), FQHCs and free clinics are where people will continue to turn for care as they accept any patient, regardless of their ability to pay.

With a focus on states that will not be expanding Medicaid, Direct Relief is expanding participation in the Replenishment Program to 20 clinics in 10 states by the end of 2013.

Recognizing that participants in the Replenishment Program provide a very narrow sample to the findings above, and given the enormous complexity of the issues surrounding healthcare reform, Direct Relief is currently conducting in depth interviews with clinic and health center providers across the nation to better understand the upcoming changes to healthcare reform.  Look for these findings on the Direct Relief website in the coming weeks.