Community Health Centers File Lawsuit Challenging AHCCCS Reimbursement Practices

Federally Qualified Health Center Primer

Federally Qualified Health Centers occupy a special place in America’s healthcare system.  Better known as FQHC’s, they operate under a mandate to provide comprehensive community-based health care in underserved areas- basically in areas where there’s a shortage of healthcare providers (often in rural and lower income urban areas).   

FQHCs are often also called Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Health Centers for Residents of Public Housing.

FQHCs are a super-important part of the healthcare network because they provide access to healthcare in areas that would otherwise likely have very few providers. Much of their mission focuses on primary care- which as I’ve written about many times is critical to improving public health outcomes and reducing costs.

In addition to funds from HRSA- federal law provides some financial incentives like special reimbursement programs which keep FQHC’s business models afloat.  Without these special incentives their business models would be in jeopardy- risking already thin networks in rural and under-served areas.

In order to qualify for the financial incentives they receive, FQHC’s have to meet stringent requirements like providing care on a sliding fee scale based on ability to pay (e.g. for uninsured folks), providing a full array of services including primary care and preventive services as and operating under a governing board that includes patients. 

Many FQHCs integrate access to pharmacy, mental health, substance use disorder, and oral health services and are often the only truly accessible place to get care in a community.

The ADHS website has easy to use tools to find FQHCs and Sliding-Fee-Schedule Clinics including ones for Primary Care Providers, Behavioral Health Providers and Oral Health Providers.  One can also download a mobile app to find federally-funded health centers on the go.

The Lawsuit Filed this Week

This week the Arizona Alliance for Community Health Centers- a nonprofit group that represents many of Arizona’s FQHCs - filed a lawsuit (in the 9th Circuit Court of Appeals) on behalf of Arizona FQHCs challenging some of AHCCCS’ reimbursement practices with respect to FQHCs (mostly for adult dental services but more on that in a bit). 

The case is called Arizona Alliance For Community Health Centers v. Arizona Health Care Cost Containment System.  The named Plaintiffs are Sunset Community Health Center, North Country Healthcare, Sun Life Family Health Center and others And the Defendant is Jami Snyder, the Director of AHCCCS.

There are several areas in the lawsuit that challenge the way AHCCCS is reimbursing for (or not reimbursing for) services in FQHCs…  but after reading the complaint (which isn't posted on the court's website yet) and talking to a few folks this week - the core issue seems to be that AHCCCS hasn’t been paying for adult dental services the way the 9th Circuit has previously ruled that they should (in CA).  

The FQHCs that have been providing adult dental services say they've been forced to pay for those services with other funds (like sliding fee scale funding) rather than the funds that they argue should be coming back from AHCCCS.  Other grievances in the Complaint argue that AHCCCS hasn’t been reimbursing for podiatry, optometry and chiropractic services the way the 9th Circuit has previously ruled that they should (again in CA).

A few months ago, the Federal 9th Circuit ruled that state Medicaid programs need to reimburse for adult dental services even if the state’s Medicaid program doesn’t cover adult dental services (or they limit them to emergency dental only or caps the services like Az does). 

So, at the core it looks to me like the suit is geared to leverage the previous 9th Circuit ruling that health centers are entitled to reimbursement when providing dental services to Medicaid members (and not limited to the existing $1K or $2K annual financial cap).

It’ll be awhile before it’s all settled, but if the suit is successful it will likely result in a more robust oral health network for adults covered by Medicaid as well as improve oral health outcomes.