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2/25/2019CHC/FQHC & Hospital:Opportunities for StrategicRelationships & SynergiesPresented byFebruary 27, 2019To Receive CPE Credit› Individuals Participate in entire webinar Answer polls when they are provided› Groups Group leader is the person who registered & logged on to the webinar Answer polls when they are provided Complete group attendance form Group leader sign bottom of form Submit group attendance form to training@bkd.com within 24 hours of webinar› If all eligibility requirements are met, each participant will be emailed theirCPE certificate within 15 business days of webinar1

2/25/2019YourPanelistsJeff AllenPartnerjeallen@bkd.comDavid TaylorPartnerdtaylor@bkd.comJeff ’s Topics1Recognize collaborative opportunities between hospitals & CHCs thatcan create financial & quality strengths2Identify the grant reporting requirements specific to CHCs & recognize theireffect on any agreement with a hospital3Analyze the opportunities & challenges associated with both organizationsinvolved in the change of clinic ownership4Apply knowledge regarding other arrangements between CHCs/FQHCs &hospitals, including referral agreements, arrangements with hospitals forspecialist services on a session or similar basis & resident rotationagreements2

2/25/2019SuccessfulCollaborationsHospitals & CHC/FQHCs› Any collaboration needs to be a “win/win”to be successful long term› Financial due diligence is a must to helpensure that any additions or majorchanges do not put the overallorganization at financial risk› There is pressure to grow, but growwisely3

2/25/2019Collaboration ExamplesHospital transfersexisting outpatientclinic to an establishedFQHC/CHCHospital works withexternal communitygroup/organization toestablish a new FQHCor FQHC look-alike intheir communityHospital establishesan emergency roomdiversion programwith the local FQHCHospital enters intoother arrangementwith local FQHC(staffing, leasingarrangement, sharingresources, other)Relationship Opportunities withHospitals/Health Systems› Transferring hospital clinic to existing CHC/FQHC› Specialist arrangements› Resident rotation arrangements› Referral arrangements› Other hospital relationships4

2/25/2019Transferring Hospital Clinic to CHC/FQHC› Many hospitals operate outpatient clinics› Hospitals often operate these clinics to satisfy their charitable mission› Hospital clinics may not be operated as efficiently & cost effectively asCHC/FQHC sites› CHCs/FQHCs have a strong track record of offering quality, efficient care;through the right arrangement, can improve care to the community› CHCs/FQHCs should consider approaching hospitals to discusspossibility of the hospital transferring its outpatientclinics to the CHC/FQHCTransferring Hospital Clinic to CHC/FQHC› Potential benefits to CHC/FQHC New site Expanded operations Increase number of patients Less competition from hospital Can potentially lead to change of Medicaidrate (state-specific) Hospital can provide grant to CHC/FQHC to help offset losses5

2/25/2019Transferring Hospital Clinic to CHC/FQHC› Potential benefits to hospital Ability to limit its losses resulting from operating an outpatient clinic Can help ensure that its patients will still receive high-quality care Especially attractive for high-risk activities such as obstetrics› Hospital can provide grant to CHC/FQHC to help offset losses &help with hospital’s obligation to provide charity careTransferring Hospital Clinic to CHC/FQHC› Related considerations Need for state licensure/certificateof need approvals as applicable Space leasing considerations Construction considerations Timing› NAP application (if available)› HRSA change of scope6

2/25/2019Transferring Hospital Clinic to CHC/FQHC› Related considerations Staffing› Hiring new personnel› Hiring former hospital personnel› Temporary personnel leasing arrangement with hospital Credentialing providers Potential for specialist arrangements Potential for residency arrangementsTransferring Hospital Clinic to CHC/FQHC› Related considerations Notification to patients New Medicare number Notification to payors Determination of which services will be transferred & which will becovered by hospital Improved coordination with hospital for referred services &hospital/referral tracking7

2/25/2019Specialist ArrangementsDoes yourCHC/FQHC have ahard time findingspecialists?Explore an arrangement with ahospital to provide specialistservices on a session or similarbasisExplore an arrangement with aprivate practiceSpecialist Arrangements› Benefit to CHC/FQHC Patients can receive services that they would otherwise beunable to easily receive Furthers CHC/FQHC mission of providing care for totality ofpatient Ability to bill for E&M type visits at CHC/FQHC rates Can potentially lead to change of Medicaid rate (statespecific)8

2/25/2019Specialist Arrangements› Benefit to hospital Hospital avoids having patients who can be seen at CHC/FQHC showup at hospital on unscheduled basis, e.g., emergency room Helps hospital avoid unnecessary/avoidable hospital visits that aremuch more costly to the hospital & the patient While E&M visits at the CHC/FQHC take place at CHC/FQHC, testing& more intensive services continue to be performed at the hospital Specialists that typically do not see Medicaid patients in their privateoffices could consider seeing Medicaid patients at the CHC/FQHCSpecialist Arrangements› Related considerations Need for state licensure/certificate of needapprovals as applicable HRSA change of scope Pricing for these arrangements can be flexible› Session basis› Patient basis These relationships can fit in FQHC safe harbor9

2/25/2019Specialist Arrangements› Related considerations If the hospital credentials the specialists, the CHC/FQHC may not needto credential them Can give priority for these services to CHC/FQHC primary care patients Notification to payors “Value-based” potentialResident Rotation Arrangements› Benefit to CHC/FQHC Residents can be a good source of “free” labor Good recruiting tool› CHC/FQHC can recruit residents to work at CHC/FQHC followingcompletion of residency based on experience at CHC/FQHC› National Health Services Corps loan forgiveness programs› Visa candidates10

2/25/2019Resident Rotation Arrangements› Benefit to CHC/FQHC Primary care exception – allows one physician to supervise up to fourresidents at a time so four patients can be seen simultaneously undersupervision of one physician Hospital can provide its preceptors to supervise residents atCHC/FQHC under “leased employee” or similar model with potential forflexible pricing Potential for grant from hospitalResident Rotation Arrangements› Benefit to hospital Hospital can have its residents receive hands-on experience at primary caresite CHCs/FQHCs focus on totality of patient care which is important for residents Primary care exception – allows one physician to supervise up to fourresidents at a time so four patients can be seen simultaneously undersupervision of one physician Hospital can continue to have its preceptors oversee the residents to helpensure compliance with GME requirements under “leased employee” orsimilar model with potential for flexible pricing Hospital continues to receive GME funding for time residents spend atCHC/FQHC11

2/25/2019Resident Rotation Arrangements› Related considerations CHC/FQHC needs to determine time frame for residency programs, e.g., only certaindays or sessions CHC/FQHC needs to determine specialties it will allow for residents CHC/FQHC needs to determine limit on number of residents CHC/FQHC needs to determine if it will have its clinicians supervise the residents orhave the hospital preceptors supervise the residents Consider effect on Medicaid productivity rates (state-specific) Need residency rotation agreement Need agreement relating to supervision of the residents Right for CHC/FQHC to remove residents if potential for patient harmCHC/FQHC Requirements: HRSA Form 5A› CHCs/FQHCs must provide either directly or through contract or referral arrangement All required primary & preventive services Additional (supplemental) health services that are appropriate to meet the health needs of thepopulation served by the health center› These services include (among others) General primary medical care Diagnostic laboratory Diagnostic radiology Obstetrical care (prenatal, intrapartum, postpartum) Behavioral health services12

2/25/2019Hospital Referral Agreements› Why does the CHC/FQHC need these agreements? The CHC/FQHC may not have the capability to provide the required servicesdirectly May arrange with another entity, including a hospital, to provide the requiredservices Note: while the CHC/FQHCs do not need to refer these services to hospitals, it’shelpful to have arrangements with hospitals because private practices generally donot want to agree to offer sliding fee discounts to the CHC’s/FQHC’s patients These arrangements can also address the CHC’s/FQHC’s obligations relating toreferral tracking & coverage by the hospital’s physicians of CHC/FQHC patients inthe hospitalHospital Referral Agreements› The CHC/FQHC agrees to refer patients to hospital› The hospital bills & collects from patients & third-party payorsfor the services it provides› Agreement must specify the services which the CHC/FQHC willbe referring to the hospital13

2/25/2019Hospital Obligations› The hospital must agree to Apply the CHC’s/FQHC’s sliding fee discount or apply the hospital’s charity carepolicies to the CHC’s/FQHC’s patients provided that the hospital’s charity care policiesoffer a sliding fee discount to patients at or below 200% of the federal poverty level &offer either a full discount or a nominal fee to patients at or below 100% of the federalpoverty level Report to the CHC/FQHC regarding the condition, care & treatment of the patient,including any applicable lab & diagnostic test results Refer patients back to the CHC/FQHC for follow-up care The agreement should preferably contain a representation by the hospital that itsproviders are appropriately licensed & qualified to perform the servicesPopulation Health: Value-Based Payment› Potential for CHCs/FQHCs & hospitals to work together Value-based arrangements Clinically integrated networks (CIN) ACOs IPAs14

2/25/2019Population Health: Value-Based Payment› Value-based payment arrangements Health care delivery reform Different types of providers expected to work together Enables buyers to hold providers of health care accountable for bothcost & quality of care Incentives to reduce unnecessary care Shifting care from more expensive to less expensive settings Shifting cost-cutting burden to providersPopulation Health: ClinicallyIntegrated Networks› Clinically integrated networks Central governance Continuum of health care providers Mechanisms to monitor utilization, control costs & help assure quality of care Use of common IT to help ensure exchange of all relevant patient data Development & adoption of clinical protocols Care review based on adherence to implemented protocols Enforcement of adherence to protocols – selectivity of participants Significant investment of monetary & human capital15