The latest —and by far the biggest — effort to funnel money to community health centers (CHCs) has grown out of New York’s move as of Jan. 1, to a system that lets the free market set hospital reimbursement rates. To protect the safety net in a system that is no longer government-regulated, New York legislators set up mechanisms to preserve funding for "public goods" such as uncompensated care and graduate medical education. However, the money is not only earmarked for hospital. Lawmakers also decided to vastly expand funding for CHCs. "It’s a big boon for us,"says Ina Labiner, executive director of the Community Health Care Association of New York State. The state’s 60 CHCs previously had received $26 million. Under the new system, another $22 million has been added. The new law reduces the percentage of uninsured patients a center must treat to qualify for funding from the pool, from 15% of its clients to 5%. But, it also requires the centers to help fund the pool for "public goods" by adding an 8.18% surcharge to their bills along with hospitals, other clinics and some labs. More funding in other states also Other states also are making more state funding available for community health centers, which are considered important safety net providers for the uninsured. Three states, Arizona, Indiana and New Mexico, recently set aside general tax funds specifically for community health centers, according to Yvonne Bice, director of health center financing for the National Association of Community Health Centers. Connecticut has been doing so for several years. New Jersey’s 12 community health centers have received $8 million annually since 1992 out of a pool of charity care money created by a tax on hospital revenues. In New York, CHCs also stand to benefit from a $54 million fund for graduate medical education. CHCs that are part of a hospital-based or other health care consortia that train residents and interns in community clinics will now have access to this money. "Our goal is to encourage training in ambulatory care sites," says Judith Arnold, deputy health commissioner for planning, policy and resource development. Ms. Arnold, who was the chief negotiator for Gov. George Pataki during talks with the state Legislature on the new law, says that finding a means to deliver more money to the centers, as well as other providers of primary care to the uninsured, was a priority. But she acknowledged that no one is sure that the amount provided in the reform law will be enough for the centers to withstand the changes in the health care system, such as the move to managed care, cuts in public funding, the cost squeeze on the entire health system and the growth in the number of uninsured. According to state figures, the number of New Yorkers without health insurance jumped from 2.5 million in 1993 to 2.9 million in 1994, the most recent figures available. "There was never an assessment done of their uncompensated care needs," Ms. Arnold says. "We just don’t know." Ms. Labiner, of the state association, points to another wild card: welfare reform. An untold number of legal immigrants in New York may lose their eligibility. The health centers, particularly in New York City, serve thousands of immigrants. At this point, it’s unclear what the state Legislature will do in regard to providing Medicaid coverage for them. "A cloud hanging over us" "That’s a cloud hanging over all of us," Ms. Labiner says. "What will happen to the care of those people?" Consumer advocates worry that in order to survive, the centers will have to raise the sliding fee scales they charge the uninsured and serve ever-decreasing percentages of those unable to pay at all. A major concern for community health centers in New York and elsewhere is what impact Medicaid managed care will have on their patient volume. Under enabling legislation passed in the last session for New York’s Medicaid managed care program (the state is still awaiting federal approval), there is a key patient volume protection for the community health centers. When Medicaid recipients fail to select a managed care plan, at least 25% of automatic assignments must go to CHCs and other qualifying organizations in the first year. That percentage is phased down in subsequent years. "The centers were concerned they would lose business, particularly when managed care networks could pull patients from them and send them to the networks’ doctors," noted Assembly Health Committee Chairman Richard Gottfried, a Manhattan Democrat. The increased funding was "designed to offset the loss they would be suffering. But, nobody knows for sure how the numbers will ultimately balance out." Concerns about managed care Richard Kirsch, executive director of Citizens Action of New York, worries that whatever benefit the centers and other primary care clinics for the poor receive from the increase in charity care pool payments will be more than wiped out by the state’s coming shift to mandatory managed care for Medicaid recipients. "The high Medicaid rates of the old system were meant to subsidize care for the uninsured," Mr. Kirsch says. "Many clinics are going to have to take much lower capitations from managed care providers. Those aren’t going to have a built-in subsidy for the uninsured." The additional $22 million, he added, "is not that much money when Medicaid is being cut and other providers are having money cut, which will be pushing that many more people into the community health centers." "I’m a combination of confident and worried," Assemblyman Gottfried says ,when asked his thoughts on the centers’ future. "We’ve provided them with some important help, but it’ll be a while before we know." —Harvy Lipman Contact Ms. Bice at 202-659-8008, Ms. Labiner at 212-870-2273, Mr. Kirsch at 518-465-4600 x113, Mr. Arnold at 518-474-7354 and Mr. Gottfried at 518-455-4941.