Clinics for the Poor Say New York State|Cheats Them of ‘Millions of Dollars a Day’

MANHATTAN (CN) - Representing dozens of clinics for poor people and the uninsured, the Community Health Care Association of New York State claims New York has cheated them of "millions of dollars a day" by refusing to reimburse them for the cost of their services. The state does this though the clinics charge far less than other providers charge for the same Medicaid services, according to the federal complaint.

"Federal funds awarded under Section 330 of the PHS [Public Health Service] Act are to be used for poor patients who lack health insurance and who therefore cannot obtain care from private sector physicians or clinics," the complaint states.

The 24 plaintiff health centers from across the states serve homeless and poor patients who have no health insurance but qualify for Medicaid benefits, including medical and dental care, psychotherapy, home health services and rehabilitation. "The State of New York is required to pay the plaintiff centers their respective per-visit rate each time a patient has a 'visit,'" the complaint states.

"The special payments to which plaintiff centers are entitled for the ... services they perform began with the 1989 Omnibus Reconciliation Act. It provided a payment requirement that invariably would be higher than the fees Medicaid programs paid to other providers for the same services."

But the clinics say New York refuses "to pay the statutorily required special FQHC [federally qualified health center] rates to a significant number of services plaintiff centers provide to Medicaid beneficiaries and for which payment of the FQHC per visit rate is required by federal law."

New York created "ceilings on operating costs" to "reduce the 'allowable costs' New York will pay FQHCs," though neither the ceilings nor the reductions exist under Medicare regulations, and the state did no "study or analysis" before it created them, which is illegal, according to the complaint.

The complaint adds: "Health center care may cost slightly more, but such care reduces the need of its patients for other, far more expensive, services. Including the extra costs for their services, health care centers produce savings of 20-30 percent of what Medicaid program services ordinarily cost. Despite such savings ... State Medicaid programs had been paying centers less than 70 percent of the centers' cost of services.

"The consequence was the double whammy of health center services to the uninsured poor and Medicaid being reduced. Medicaid cost savings more center services could have achieved were blunted by the penny wise, pound foolishness of state Medicaid agencies' refusal to fully reimburse the health centers their costs. That foolishness continues to this day. In implementing the special FQHC payment requirement, the State of New York's Medicaid program has failed, among other things, to pay plaintiff centers millions of dollars to which they are entitled under that special payment provision."

The clinics demand declaratory and injunctive relief for violation of the Medicaid statute, and an order requiring the New York Health Department to make interim emergency payments "reasonably approximate to what they would have received under a lawful FQHC payment system."

They are represented by David Koenigsberg with Menz, Bonner and Komar.

Follow @MariaDinzeo

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