BILL NUMBER: S4589
SPONSOR: RIVERA
 
TITLE OF BILL:
An act to amend the public health law, in relation to federally quali-
fied health center rate adequacy
 
PURPOSE OR GENERAL IDEA OF BILL:
Requires the Department of Health to analyze and update federally quali-
fied health center (FQHC) rates.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends Public Health Law 2807 (8) (b), which authorizes feder-
ally qualified health center (FQHC) reimbursement rates, to implement an
updated methodology, to ensure that the two-decade old rates are updated
to reflect actual costs incurred by FQHCs.
Section 2 amends Public Health Law 2807 (8) to require the Department of
Health (DOH) to analyze historical FQHC cost data as well as related
factors to set an adequate rate; eliminate arbitrary caps on rates,
subject to federal financial participation.
Section 3 provides an immediate effective date.
 
JUSTIFICATION:
FQHCs, also known as community health centers (CHCs), are located in
medically underserved neighborhoods, providing quality and affordable
healthcare services to all, regardless of immigration status, insurance
coverage, or the ability to pay. CHCs are a critical safety net for
quality healthcare services, particularly for low-income communities and
communities of color. Among CHC patients, 89% are low-income, 68% are
Black, Hispanic/Latinx, or otherwise people of color, 13% are uninsured,
and nearly 60% of CHCs' patients are enrolled in Medicaid, CHIP, or are
dually enrolled in Medicare and Medicaid.
CHCs deliver a full spectrum of services, including many social care
supports, such as housing, transportation vouchers, and food, many of
which were never envisioned when the CHCs' base rate was developed over
20 years ago. Current reimbursement rates are still based on costs from
1999 and 2000. These reimbursement rates are the oldest cost-based
rates, among all New York State Medicaid provider types. CHC rates are
further suppressed by arbitrary rate ceilings regulatorily imposed by
the DOH. Costs today for personnel, benefits, equipment, medical
supplies, and office space are all significantly higher than they were
decades ago and have risen exponentially since the pandemic. Adding to
the inadequacy of these outdated rates is the onset of more widely used
healthcare delivery modes such as telehealth, further driving down the
ability of rates to meet contemporary cost pressures. The outdated
reimbursement methodology for CHCs does not account for the current
model of comprehensive primary care including behavioral health
services, oral health services, reproductive health services, and
services addressing social needs. CHCs are also experiencing
unprecedented workforce attrition and workforce shortages that are
affecting operations. CHCs' insufficient reimbursement rates undermine
their ability to engage in long-term sustainability and expansion plan-
ning, limiting access to care.
This legislation would ensure that the DOH evaluates and implements
updated payment rates to sufficiently account for increases in operation
costs and the new, expanded model of health and social care that is the
hallmark of CHCs.
 
PRIOR LEGISLATIVE HISTORY:
2023-2024: S6959-A/A7560 Paulin
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S4589: 2807 public health law, 2807(8) public health law