Looking Back to Move Forward: Understanding the Underlying Authorities to Help FQHCs Survive the COVID-19 Crisis

By | Published On: June 3, 2020

This post originally appeared on NACHC’s blog on May 29, 2020.

Federally Qualified Health Centers (FQHCs) have experienced rapid declines in patient encounters and revenues since the onset of the pandemic, being forced to lay off employees or suspend services to keep their doors open. Nonetheless, FQHCs are pivoting to meet the immediate needs caused by the pandemic.

Where have we been?

Over the past few months, Congress,[1] the Department of Health and Human Services (HHS),[2] and State Medicaid agencies have taken a variety of actions, including improvements in telehealth payment and authorizing and implementing emergency grant and loan programs. Unfortunately, those measures do not fully address FQHCs’ financial challenges, especially for Medicaid beneficiaries. During public health emergencies, federal law gives states unique flexibility to take action to ensure access to care and continuity of operations.[3] The Families First Coronavirus Response Act (FFCRA) also provided a temporary 6.2 percent increase in states’ standard federal medical assistance percentage (FMAP) rate.[4]

In late April, CMS approved the first Section 1115 waiver specifically intended to combat the impacts of COVID-19 in Washington state. Although the Centers for Medicare and Medicaid Services (CMS) denied their request to create a temporary eligibility group for individuals at or below 200% FPL, the state is permitted to make “retainer payments” for certain providers. CMS is still reviewing the state’s request to create a disaster relief fund to address uncompensated care, provider payments, and homelessness assistance, among others. Additional states have continued to pursue 1115 waiver requests for approval of emergency measures.

How do we move forward?

In a fact sheet linked here, we describe many of the tools states are using to respond and protect Medicaid beneficiaries:

  • Section 1135 waivers
  • Emergency state plan amendments
  • Section 1115 demonstrations
  • Managed care contract amendments
  • State regulatory changes

The fact sheet also provides concepts on how states can further enhance payment. Most can be continued after the emergency ends, but states would be required to obtain authority through the SPA and 1115 waiver demonstration approval process to continue any provision that is effective only for the duration of the COVID emergency.

The case for moving forward is clear. In addition to weighing in on federal support issues, state primary care associations (PCAs) should urge State Medicaid agencies to take measures necessary to address FQHC capacity issues, working collaboratively on proposals that maximize the many policy tools at their disposal. This work is critical to ensuring that FQHCs are able to keep their doors open and serve their communities.

Questions about the information shared in this blog post and the accompanying fact sheet can be sent to NACHC State Affairs at state@nachc.org.

This blog was supported in part by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) under cooperative agreement number U30CS16089, Technical Assistance to Community and Migrant Health Centers and Homeless for $6,375,000.00 with 0% of the total NCA project financed with non-federal sources. This information or content and conclusions are those of the author and should not be construed as the official position or policy of, nor should any endorsements be inferred by HRSA, HHS or the U.S. Government.

[1] Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, P.L. 116-123 (Mar. 6, 2020), Div. B; Families First Coronavirus Response Act, P.L. 116-127 (Mar. 18, 2020); Coronavirus Aid, Relief and Economic Security Act (CARES Act), P.L. No. 116-136 (Mar. 27, 2020).

[2] HHS issued wide-ranging waivers of Medicare requirements under the authority of Section 1135 of the Act on March 13, 2020, and has progressively extended the waivers. Available here.

[3] The Secretary of HHS declared a public health emergency under Section 319 of the Public Health Service Act relating to COVID-19, effective January 27, 2020, on January 31, 2020. On March 13, 2020, President Trump declared a national emergency under the National Emergencies Act and made an emergency determination under the Stafford Act relating to COVID-19, effective March 1, 2020.

[4] Families First Coronavirus Response Act, P.L. 116-127, Div. F, § 6008. Under the provision, in order to benefit from the enhanced FMAP (which applies only to expenditures at the standard FMAP rate), maintenance of effort requirements apply. A state may not implement more restrictive eligibility standards or higher premiums or cost-sharing than it had in place on January 2, 2020, and must cover COVID-19 testing and treatment without any beneficiary cost-sharing. Efforts are underway to seek even greater increases to the FMAP.

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