Community health care provider faces financial challenges

  • By Rashah McChesney
  • Saturday, May 2, 2015 8:30pm
  • News

Brittany Weston was stuck in root canal limbo.

Some time after getting the decayed portion of an ailing tooth scraped out and getting it filled, the dense world of Medicaid and uncompensated care caught up with her at Peninsula Community Health Services.

PCHS wrote off $2.5 million in uncollectible or uncompensated care in 2013 and 2014 and is losing about $130,000 a month, according to data provided by Chief Executive Officer Monica Adams. As it cuts staff and services to cope with increasingly large financial losses, patients like Weston are finding themselves lost in the battle between state and federal medical care compensation and a medical facility struggling to keep its doors open.

Weston took a routine reminder phone call about an appointment for a filling on a separate tooth and the woman at the other end of the line told her that, due to a policy change, her procedure would not be added to her longstanding payment plan. Weston would have to pay up front for the procedure. For the filling, that meant about $79 up front, a cost reduction that she qualifies for according to federal poverty guidelines and the PCHS dental clinic’s sliding fee scale. The second half of her root canal, however, was $250.

For the Soldotna-based retail worker, the revelation was a nasty surprise and one she was unprepared to handle.

“I make above minimum wage, but not much more,” Weston said. “I can’t afford dropping several hundred dollars to go to a dentist.”

Weston said PCHS employees told her in mid-April that she’d need to come up with the $250 fee to finish her root canal before May 1 when the procedure was scheduled for removal from the sliding fee scale and the price would jump to more than $1,000.

“Where am I going to get $200 before May 1, when I get paid next on the 30th? Even then, I have my car insurance and my phone bill coming up, so how am I going to be able to afford all of this?” she said.

While the policy change may have surprised Weston, the impetus for that change has been looming for nearly two years.

Adams said clinic directors figured out that they’d need to abolish payment plans when cash started to dwindle and Medicaid had not expanded to cover patients like Weston — who falls squarely into a “donut hole” of patients who don’t make enough money to afford insurance through Alaska’s health insurance exchange, but make too much money to qualify for Medicaid.

For Weston, who said she has never had private health insurance, medical care has been out of her reach since she aged out of the state’s Denali KidCare insurance program. But then she broke a tooth.

“I had a broken tooth for a year and … I woke up one morning and several times that night because I couldn’t deal with the pain anymore,” she said.

She chose PCHS because of its emergency dental services and when she arrived, they fixed her broken tooth and pointed out that she needed further dental care. The option of putting those procedures on a payment plan was a benefit for Weston who said she could pay down her balance slowly, while getting care that wasn’t available to her before.

She owes about $1,800 on a payment plan.

But those payment plans have ballooned into debt that PCHS can no longer afford to offer, according to Adams. Currently, PCHS has around $1.7 million due from uninsured and self-pay patients and it expects to collect about 10 percent of those funds, Adams wrote in a letter. Between 20-30 percent of the patients PCHS serves are uninsured and last year PCHS wrote off $2.5 million in bad debt or services from 2013 and 2014 for which it was unable to collect payment. The health center receives about $2 million each year in state and federal support.

It’s a business model that is not sustainable, Adams said.

“We’re on the verge,” she said. “I’ve been really hesitant to say that because I need the faith and the trust in this community to believe in what we do, but I also need them to understand that we’re not free.”

PCHS is a federally-qualified health center and community health center, which means that it receives both federal and state funding in addition to the money it collects from patients whose income implies that they can pay. In addition to primary care, it also offers mental health and dental services.

As a federally-qualified health center, it serves patients including those with private insurance, Medicare, Medicaid and Denali KidCare in addition to uninsured and underinsured community members, some of whom qualify for a sliding fee scale.

Weston’s income qualified her for that scale, which is why her portion of the filling was $70. But as PCHS continues to lose money, Adams said some changes had to be made to both the sliding fee scale — which the clinic is mandated to offer — and to its policy of offering payment plans — which it is not obligated to provide to patients.

For Weston, the loss of the payment plan option means she can no longer afford to get the dental care she needs. For Adams, payment plans, uncompensated care and the resulting bad debt are contributing to a shrinking PCHS budget.

“Right now, we have patients who have established payment plans of $5-$100 per month on multiple thousand-dollar balances. By having payment plans of this magnitude we jeopardize not only our requirement to seek timely payment but also our financial viability or remain able to continue to operate and serve our community,” Adams wrote.

Uncompensated care, or medical care that was provided without compensation from either the patient or an insurance company, is not the sole purview of clinics like PCHS.

According to the Alaska State Hospital and Nursing Home Association and data that it gathered from 17 acute care hospitals statewide, health care organizations racked up more than $100 million in uncompensated care for 2013. Nationwide, the Kaiser Family Foundation and the Kaiser Commission on Medicaid and the Uninsured estimate community health clinics provided more than $30 billion in uncompensated care in 2013.

For PCHS and the 7,500 patients on its books, the level of uncompensated care is growing, Adams said, at the same time its state funding is being cut.

Alaska cut mental health spending by 37 percent between 2009 and 2012, according to data from the National Alliance on Mental Illness. At PCHS those cuts translated in 2012 to more than $1 million in state reimbursement for time PCHS spends treating mentally-ill adults,

Adams said state reimbursement for mental health care is expected to continue falling as the state grapples with the drop in oil revenue and a multi-billion dollar deficit.

Adams said PCHS was never meant to handle the level of uncompensated care that it is absorbing and she, in part, blames a portion of the health center’s patient population who do not pay their bills on time.

“People think that we’re free. They think that our grants cover this, they don’t even come close to covering bad debt,” she said. “They don’t even come close to cover our (sliding fee scale) really.”

Several changes are on the horizon for PCHS patients. In addition to eliminating payment plans, payment will soon be required at the time of the visit, even for those who fall below federal poverty guidelines. PCHS will also be raising its fees, though Adams could not detail those fee changes as they have yet to be approved by its board of directors.

Despite the changes, Adams said most of the clinic’s patients would not notice a change in their services. But, she said, for those who are impacted the transition could be difficult.

“I think this is going to impact probably 200 people. Mainly behavioral health and dental patients,” she said. For those people, Adams said she and the PCHS billing supervisor would sit down and review the cases one-on-one with the patient to work the details of the new billing procedures out.

For Weston, a phone call to the clinic’s billing director and an understanding friend who loaned her $200 meant she was able to get the procedure finished — but the 23-year-old isn’t likely to get any further treatment at PCHS now that she can’t pay in installments.

“If they wouldn’t have had a payment plan, I wouldn’t have gone to them at all,” she said. “The fact that they gave me 9 days notice to get it done for $200 is just very difficult. Luckily, I do have someone who is willing to work with me on money. I’m one of the lucky few who has those options.”

Reach Rashah McChesney at or follow her on Twitter @litmuslens.

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