Sara Rosenbaum, Marcie H. Zakheim, J.D., Jacqueline Leifer, J.D., Michael D. Golde, J.D., M.P.H., Jillanne M. Schulte, J.D., and Ross Margulies
Clinical integration of health care organizations is often seen as a means of boosting health care quality and efficiency. Interest in it has grown in recent years with a rapid escalation in health care costs and mounting evidence of the role of integration in slowing cost increases. The Patient Protection and Affordable Care Act (Affordable Care Act) encourages clinical and financial integration, doing so through its support of accountable care organizations and other innovations that promote partnership among health care providers.
Clinical integration through affiliation and collaboration has also been a long-established goal of community health centers, which now provide primary care services to approximately 20 million mostly uninsured Americans. Health centers are expected to provide care to millions more as the Accountable Care Act expands health care coverage to low-income Americans, many of whom live in the medically underserved communities where health centers operate.
Partnerships among health centers, hospitals, and clinics have enabled health centers to expand and enhance the services. For this reason, the Health Resources and Services Administration (HRSA), the federal agency that oversees health centers, supports collaboration including the formation of provider networks for shared services and joint contracting arrangements that serve to assure patients obtain the full range of services they need.
Despite the potential benefit of partnerships and encouragement from federal agencies, many health centers and their potential partners see the unique laws that govern health centers as impediments to their integration efforts. The concern is not without foundation. Section 330 of the Public Health Service Act, the statute that authorizes the establishment and operation of health centers, imposes significant requirements on health centers, including the legal obligation to serve all community residents regardless of their income, insurance status, or ability to pay for necessary health care. These requirements extend to a health center’s collaborator. And failure to comply with the statute has serious consequences. The health centers not only risk losing Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) payments, but also other benefits and protections such as eligibility for a prescription drug discount program, special antifraud “safe harbors,” and malpractice liability coverage.
The federal affiliation policy derived from the section 330 statute is designed to assure that in core matters—governance, senior financial and medical management, and overall clinical practice—health centers remain independent actors, free of the types of external pressures that could erode adherence to federal statutory obligations or cede operational and governance control as a result of economic, business, or personnel pressures.
Thus while federal guidelines encourage hospital referral arrangements, affiliations with specialty providers, admitting privileges and established arrangements for hospitalization, discharge planning and patient tracking, after-hours coverage, and participation in integrated delivery systems, they also impose certain affiliation limits, including a bar on arrangements in which a corporation obtains actual or effective control over a health center’s board.
Despite these limitations, close examination of the legal framework of the health center program reveals that the law not only permits but encourages collaborations that further the health center mission. And as a review of ongoing affiliations reveals, health centers are widely engaged in collaborative activities. These affiliation and collaboration activities advance the goals of access, comprehensive care, quality improvement, and efficiency. Such health center collaborations are varied, but experts have identified several common types including:
This report outlines the laws and policies that govern collaborations between health centers and their partners, and profiles health centers that have worked within the legal framework to develop partnerships that benefit patients, while adhering to the health centers’ core mission to assure health care for all patients regardless of insurance coverage, income, or ability to pay for services.
Similar collaborations will be increasingly common, as the federal government’s $11 billion investment in community health centers under the Affordable Care Act makes clinical integration between health centers and community partners even more feasible.
As this report illustrates, a well-designed federal strategy will foster such innovation both through policy issuance and expanded technical support, training, and learning opportunities that allow health centers and their partners to grow from one another’s experience.