Alternative Financing for School Based Clinics

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Alternative Financing for School Based Clinics

• Consideration of Some Possible Federal
  Alternatives
• Arthur Stickgold, CEO
• Stickgold Assoc.

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The Basic Health Problem

• According to Health USA 2003 released today
  (http//www.cdc.gov/nchs/hus.htm)
• Twenty-nine percent of high school students
  reported smoking cigarettes in the past month in
  2001, down from 36 percent in 1997
• Thirty-eight percent of female high school
  students and 24 percent of male students did not
  engage in recommended amounts of moderate or
  vigorous physical exercise in 2001.
• Thirteen percent of children younger than 18 did
  not visit a doctor or clinic in the past 12
  months 6 percent had no usual source of medical
  care in 2000-01. Hispanic and black children were
  more likely to be without a usual source of care.
  
• . . . But you know far better than I

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The Basic Financing Problem

• Grant funds are scarce
• Politically they are somewhat suspect or even
  dangerous for politicians to support
• The granting agencies are all strapped for funds
• School health is a weird duck!
• Much more than just traditional clinic care
• Hard to find where the money might be

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Non traditional funding comes from

• At least from a health systems point of view
• Smoking cessation programs
• Alcohol and drug abuse prevention
• Wellness grants
• Family planning and/or chastity programs
• Block grants (SCBG)
• Board of Education

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Non traditional funding supports

• In the school based clinic setting
• Tobacco and substance abuse prevention
• Mental health treatment and prevention
• Diet, exercise, accident reduction
• Pregnancy and STD prevention and control
• Basic health education
• Etc.

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Medical Care is paid for by

• Self-pay patient fees (!!!)
• Insurance
• Private insurance (Blue Cross, Etna, etc. etc.)
• MediCal (Medicaid)
• Healthy Families (S-CHIP)
• Medicare (for some disabled youth)
• State and local grants and contracts

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Patient Fees

• (I was just kidding ?! But)
• Medicare, a lousy payor, paid in 2002

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Patient Fees

• And the Medicare (RBRVS) fees for comprehensive
  well child visits are even higher!

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Patient fees but

• Most SBCs are not allowed to collect fees under
  the terms of their grant or contract
• Most SBCs are located at schools in areas of
  poverty or relative poverty
• Most students do not have the money to pay fees
  and if they did, would not prioritize it!

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Patient fees Health Education and Political
Science

• Nonetheless!!
• Health care costs are escalating at double digit
  rates year after year
• The uninsured is becoming a constant news item
• 2002 numbers 43,000,000 official, 80,000,000
  real
• http//covertheuninsuredweek.org/
• Students must learn to become informed consumers
  must know what health care costs

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Insurance Problems

• Many if not most of those served at school based
  clinics are uninsured
• Those who are insured (including almost all of
  Californias MediCal and Healthy Families
  patients) are often covered in a managed care
  program
• Unless the school based clinic is linked to a
  community health center which is serving the
  family, can almost never get contract for
  capitated kids!
• And many pay poorly or do not cover services

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Grants and Contracts

• Focus today on what used to be called Healthy
  Schools, Healthy Communities
• Department of Health and Human Services
• Health Resources and Services Administration
• Bureau of Primary Health Care
• BPHC HRSA DHHS
• http//www.bphc.hrsa.gov/Grants/Default.htm

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BPHC Section 330 SBCs

• Background
• Originally grew out of the Health Care for
  Homeless Children program
• Never had statutory authorization as HSHC
• Originally funded with Health Care for the
  Homeless earmarked funds (!!)
• Originally took advantage of some special rules
  for homeless programs.

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330 Funding Opportunities

• Announced each year
• Most recent is dated September 30, 2003 and
  released as Program Information Notice (PIN)
  2004-02
• http//www.bphc.hrsa.gov/pinspals/pins.htm
• Due dates for applications are December 1, 2003
  and May 1, 2004
• Contact Laverne Green [phone]

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The PIN
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330 Funding Levels

• Good news up to 650,000
• Bad news calculated at 200 per user
• Generally this is thought of as users of medical
  services.
• Could probably be stretched to users of medical,
  dental and mental health services
• Probably could not be stretched to users of
  health education and prevention services

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330 Grants Funding Levels

• More bad news
• The total amount available for new SBCs will be
  relatively low my memory says about 3 - 5
  based on 169M request for FY-2004
• Grants will probably be in the 50 - 200K range
• Which means very very very tight competition for
  the available funds
• This year scores in the upper 90s were required

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330 Grants Who can apply

• PIN spells out eligible applicants
• Public entities (including School Boards and
  Health Departments)
• Nonprofit entities with user based Boards of
  Directors
• Must have a majority (not all) of the Board made
  up of individuals who use the services and/or
  whose family members use the service.
• Waivers of this rule are not permitted.

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330 Grants where can you be

• 330 grants must serve a Medically Underserved
  Area (MUA)
• www.bphc.hrsa.dhhs.gov/databases/newmua/
• (not a Health Professional Shortage Area (HPSA)
• Need not necessarily be located within the
  boundaries of the MUA as long as the patients
  being served come from an MUA
• (Not necessary if you already have 330 funds)
• (Contact OSHPD for more information)

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330 Grants who are served

• PIN is explicit. Not permitted are
• . . . applications proposing a new access point
  to exclusively serve a single age group (e.g.,
  children) . . . However, applicants may target a
  subset of the population, for example . . .
  organizations applying for operational support
  for a school based health center targeting
  children and adolescents. Even when a population
  subset is targeted, services must also be made
  available to other community members.

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330 Grants requirements

• Demonstrate how program will increase access to
  primary and preventive health care
• Includes referrals, tracking and followup
• Also includes mental, dental and substance abuse
• Demonstrate that major needs of the target
  population will be addressed
• (You are defining these in the application)

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330 Grants to be competitive

• . . . will propose a school-based health center
  that serves other community members in addition
  to the students attending the school(s) where the
  SBHC is located.
• Community members may be served in other
  locations operated by the applicant organization.
  
• . . . must operate at least 30 hours per week at
  each school-based health center, except in
  sparsely pop-ulated and rural areas utilizing
  mobile vans where the van must be operational
  at least 30 hours per week at school sites.

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330 Grants Direct Advantages

• Relatively large to very large sized grants for
  SBC grants
• Funds are ongoing once granted, the funds are
  maintained as long as the grantee remains in good
  standing
• Generally considered to be a sign that the
  clinical system is effective and efficient

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330 Grants Fringe Benefits

• FTCA no malpractice insurance premiums
• 340(b) an opportunity to purchase drugs at
  what is almost always a much lower cost
• FQHC / PPS You may bill MediCal at your
  actual cost for delivering services as opposed to
  the fee schedule that MediCal normally holds you
  to.
• Usually much more, though SBCs are exceptions

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330 Consolation Prize

• FQHC Look-Alike Program
• Described in PIN 2003-21
• Defines a Look-alike
• Provides all materials required to apply
• Describes the application process
• Includes all forms necessary for application

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Look-Alike status what is it

• Recognition that nor all otherwise eligible
  organizations will be able to successfully apply
  for the limited 330 grant dollars available
• An attempt to provide to them some of the
  benefits of the 330 program, not including the
  grant dollars

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FQHC Who can apply

• Public or a private nonprofit entities same
  ones that can apply for a grant! Entities that
• serve in whole or in part, a federally-designated
  Medically Underserved Area (MUA) or Medically
  Underserved Population (MUP)
• meet the statutory, regulatory and program
  requirements for 330 grantees
• comply with the policy implementation documents
  specified in the PIN
• are not owned, controlled or operated by another
  entity

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FQHC Why Look-alike?

• There is NO advantage to being a look-alike as
  opposed to being a grantee!
• Have to jump through virtually all of the same
  hoops with the exception of site visits
• Have to meet all of the same expectations
• But you CAN become a look-alike when there are no
  grant funds available
• And you ARE somewhat more likely to be funded
  when you are a current look-alike.

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FQHC What are benefits?

• 340(b) an opportunity to purchase drugs at
  what is almost always a much lower cost
• FQHC / PPS You may bill MediCal at your
  actual cost for delivering services as opposed to
  the fee schedule that MediCal normally holds you
  to.
• Usually much more, though SBCs are exceptions

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FQHC Should you apply?

• First step
• Do you intend to apply for a grant in the near
  future (next few years)?
• Are you spending a lot on prescription drugs
  especially the high-end non-generic prescription
  drugs?
• Do you have a significant number of MediCal
  patients for whom you are able to bill?

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FQHC Should you apply?

• Second step grant in your future
• If you are seriously planning to apply, review
  all eligibility steps.
• Confirm with administration that the board
  requirements can be meet and that they would be
  willing to do so for these benefits.
• Cost out other benefits as an inducement to
  proceed

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FQHC Should you apply?

• Second step lots of pharmacy costs
• Determine what you are currently spending on
  pharmaceuticals
• Divide between generic drugs vs. brand name
• Divide between high cost and low cost
• Speak with other 330 affiliated organizations
  about savings. (In L.A. County PCA)
• (They are top secret!)

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FQHC Should you apply?

• Second step MediCal patients
• Determine what you are currently receiving per
  visit for your MediCal visits
• Determine how many visits per year you are seeing
  that you can bill (are billing) for
• Determine what your average cost per visit would
  be under FQHC PPS rules

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FQHC What would you get?

• To calculate your FQHC rate, add all of your
  direct costs for medical care
• All medical staff or the proportion of medical
  staff spent on delivering health care (as opposed
  to health ed., non-clinical prevention efforts,
  etc.) you pay for
• All of the time of support staff you pay for
• A fair share of the facilities costs you pay for
• Lab, x-ray and pharmacy if you pay it for MediCal
  patients
• CME, training, supplies, laundry, etc. etc. etc.

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FQHC What would you get?

• Add to your direct costs your allowable indirect
  costs essentially a share of your agencys
  administration calculated by a process approved
  by auditors
• Divide total by total number of allowable
  (Medical, Dental, Mental Health) MediCal visits.

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A final word

• Its a lot of work to go after 330 or 330
  look-alike status.
• Grant / Look-alike proposal writers are asking
  obscene amounts for their services (I.e., 10,000
  - 25,000) they are not required (but they do
  much better)
• Make sure the investment is worth while the
  investment in and in infrastructure redesign!

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A final word

• Dont give up on your solicitations in the
  private sector they may still be the most
  effective efforts you can engage in for SBC
  funding.