Friday, December 21, 2012

Health Insurance Exchanges Come into Focus Amidst the Holiday Fog

The Affordable Care Act (ACA) provided for the creation of health insurance exchanges designed to allow consumers and small businesses to visit an online marketplace to compare and purchase insurance plans. Under the law, states can choose to operate their own exchange or, if they are unable or unwilling, a federal exchange will be available for patients to compare plans.

Following last week’s deadline for states to declare their intent to participate, the Obama Administration has now approved 11 state exchanges and one state/federal partnership exchange (Delaware). These exchanges are expected to be operational in time to enroll customers beginning in fall of 2013. Although states can choose to establish exchanges at a later date, it is unlikely they will be able to open in time to meet the January 2014 deadline—any states not meeting the deadline will be served by the federal exchange until their exchange is operational.

INTERACTIVE: For a great overview of which states are planning to participate in the exchanges, visit the Commonwealth Fund’s interactive exchange map.

For health centers, patients with income levels between 133% and 400% FPL eligible to be insured via the exchanges will no doubt become a substantial portion of the new payer mix.  Fortunately, the ACA requires insurers participating in the exchanges to pay health centers their Medicaid PPS rate.  This should help health centers continue to provide the quality, comprehensive care for which they have come to be known.

Tuesday, December 18, 2012

Medicaid Update: CMS declares “all or nothing” opportunity, and other resources

By Joe McKelvey, Project Consultant

Last week, the Centers for Medicare and Medicaid Services (CMS) issued an extensive memo offering additional guidance on Medicaid, State Exchanges and additional ACA-related issues.  The memo indicated that CMS does not believe the ACA authorizes them to approve partial expansions.  As a result, the ACA Medicaid expansion is now an all or nothing proposition. 

Although the ultimate outcome in each state is uncertain, recently revised national estimates from the Congressional Budget Office indicate that Medicaid will cover 6 million fewer individuals.  Unfortunately, only one-third of this group will have incomes high enough to qualify for the newly-created health insurance exchanges which are designed to create a competitive marketplace for consumers to purchase commercial insurance plans.  The remaining 4 million will either have incomes too low to qualify or will opt not to purchase insurance via an exchange plan, many falling into the “donut hole” of individuals who don’t qualify for Medicaid but earn less than 100% of FPL and will be required to purchase insurance, but are not eligible for the subsidies to cover it.  Community Health Centers (CHCs) are one of the few providers available to meet this group’s medical needs.

We’ve also rounded up a few links to newly available resources on the Medicaid expansion:

National Medicaid Expansion Map: Based largely on Urban Institute data, this handy map by the Texas Tribune includes state by state data on possible Medicaid expansion costs and benefits. 

NACHC Medicaid Guide: Comprehensive listing of Medicaid-related data and information.

Urban Institute Reports and Estimates:  Urban Institute’s Health Policy Center has completed a great deal of research on the national and state by state implications of the ACA and Medicaid expansion.

For states looking to better understand the implications of Medicaid expansion, Capital Link has developed a wide variety of tools to assist Primary Care Associations, health centers, and policymakers including:
·         Economic Impact Reports with and without Medicaid expansion, including tax implications
·         Patient and payer mix projections

For more information, contact Joe McKelvey at or 202-331-4602.

Thursday, November 29, 2012

the Importance of Financial Forecasting in the Face of Uncertainty

Uncertainty is a current reality for health centers at both the state and national levels. Health centers must continue to serve patients and expand while questions remain concerning Medicaid expansions, how Accountable Care Organizations will form, and how entitlement programs will change at the federal level due to sequestration. How these issues are decided will have ramifications on patient growth and the health center payer mix, making it important for health centers to update their financial projections to reflect the latest situation in their state. 

How can health centers prepare to respond to the variety of possible outcomes?  Don’t just leave your current system in place and wait for the debate to be settled! Create a contingency plan with a range of financial feasibility scenarios to help your health center envision how your operating statement will be impacted in the face of change.  Contingency planning will help your health center proactively address whether any changes on the horizon may require your health center to modify its growth plans based on changes to payer mix and patient growth.  Our Fall 2012 Capital Ink newsletter includes some ways to modify your financial projections based on the move towards including community health centers as Accountable Care Organizations, the shift to global payments, and changes to Medicaid. Access it at

Wednesday, August 8, 2012

Not Ready to Build? Maximize Your Health Center Facility

By Cindy Barr, Operations & Facilities Planner

The Facility Maximization Process helps identify existing redundancies in program, staffing and facility areas so health centers can operate most efficiently and effectively in their current buildings. This process can be extremely useful for health centers in the early stages of planning and funding expansions and must make the best use of the facilities at their disposal. During these uncertain times, Capital Link is increasingly working with health centers to make sure that they are maximizing their current facilities while planning for future expansions. The process is shown below and described in our current newsletter available here:

Has your health center completed a facility maximization process? If so, share your experiences here!

Thursday, June 28, 2012

As Affordable Care Act Advances, Health Centers Challenged to Meet Capital Needs

By Allison Coleman, Chief Executive Officer

Capital Link announces the release of Capital Plans and Needs of Health Centers: A National Perspective, a study conducted to determine the current capital plans of community health centers across the United States and whether those plans, if funded and implemented, would be sufficient to provide the facilities necessary to serve 40 million patients, the Affordable Care Act goal for access to care. This study was supported by a Cooperative Agreement with the Health Resources and Services Administration, Bureau of Primary Health Care.

Capital Link requested information from 1,200 health centers, resulting in a 30% response rate. 76% indicated that they had specific plans to initiate capital projects within the next five years, which Capital Link estimates will total approximately $5.7 billion. These planned projects should accommodate an additional 6,629 providers and 6.9 million patients, tremendous progress but still some distance from the needed capacity.

To serve 40 million patients annually and provide space for an additional 15,303 providers, Capital Link estimates that health centers will need to take on additional capital projects costing about $7.4 billion. Combined with planned projects of $5.7 billion, this additional capacity brings the total capital need to $13.1 billion.

Health centers have secured about 33% of the cost of planned projects, with federal grants accounting for a third of that figure. Extrapolating from that data, Capital Link estimates that health centers nationally have likely secured at maximum of $1.9 billion for planned capital development, but a funding gap of at least $3.8 billion for planned capital projects likely remains. Given that projects totaling at least $7.4 billion have not yet been planned nor funding secured, health centers still have an enormous gap of $11.2 billion to bridge with additional equity and/or debt financing and through securing leased space.

For detailed results, access the complete report online at

Tuesday, June 5, 2012

So You Didn’t Get a HRSA Capital Development Grant: Take a Moment to Reflect

By Terry Glasscock, Senior Project Consultant

Federal funding over the past few years has helped many health centers increase their capacity, but there is still a need to complete hundreds of projects to meet patient demand. Given that no additional federal grants are expected for the foreseeable future, how can health centers that did not receive grants advance their capital projects? There are many paths to success, but take a moment to reflect if your health center is well-positioned to proceed with a financing/funding plan.

Health centers that have been successful in stimulating investment from granters and lenders have some common elements, so the first step is to assess if improvements or changes need to be made to move you forward.

 Does your health center have the following qualities?
·         Management and Board strength
·         Demonstrated internal planning capabilities
·         A compelling business case
·         The ability to leverage community partnerships or resources
·         A financing strategy with a variety of sources identified

If you feel that you health center doesn’t demonstrate the qualities referenced above as well as it could, you may need to step back and complete a strategic capital planning process to ensure you are ready to proceed with your project.  The overall process, which is diagramed below, results in specific action steps to improve operational efficiencies, maintain a good financial condition, and plan long-range facility requirements given patient population needs. Once these key planning activities are complete, your health center has the data to put together a written business plan.

Market Analysis
Program & Staff Planning
Facility Planning
Financial Planning
Describe Market & Current Patient Base
Identify Program Priorities
Calculate Required Spaces
Consider Funding Sources & Financial Profile
Identify Key Competitors
Consider Capacity & Efficiencies
Consider Adjacency & Flow
Develop Financing Plan
Analyze Demand for Future Services
Create Staffing & Recruitment Plan
Facility Layout & Design
Project Financials Based on Trends & Demonstrate Financial Feasibility

For more information on capital project readiness, health centers and Primary Care Associations can access Capital Link’s manual “Preparing for a Capital Project: Are You Ready?” in the Resources section of our website at

How Much has the Federal Government Invested in Community Health Center Construction?

by Joe McKelvey, Project Consultant
According to a report released on May 1st by the White House[1] , the Affordable Care Act has already supported the construction and renovation of 190 health center sites and the creation of 67 new health center sites across the country, and will support the construction and renovation of more than 485 health center sites and the creation of 245 new health center sites over the next two years.

Since the beginning of 2009, primarily due to the Affordable Care Act and the Recovery Act, Community Health Centers are serving nearly 3 million additional patients today and will serve an additional 1.3 million additional new patients in the next two years. Employment at Community Health Centers nationwide has increased by 15 percent. A summary of direct federal investment in health center capital projects since 2009 is included in the table below.

Unfortunately, the last round of major capital funding from the Affordable Care Act has passed.  To keep moving forward with growth, health centers will need to rely on more deliberate planning and extensive development of alternative fundraising strategies—including capital campaigns.   Visit Capital Link’s website at for more information.