Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
CHIPs Impact On Changing Service 
Delivery Of Federal Health Centers 
Six Case Studies 
JUNE GIBBS BROWN 
Inspector General 
OCTOBER 1999 
OEI-06-98-00320  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 
95-452, is to protect the integrity of the Department of Health and Human 
Services programs as well as the health and welfare of beneficiaries served by 
them.  This statutory mission is carried out through a nationwide program of 
audits, investigations, inspections, sanctions, and fraud alerts.  The Inspector 
General informs the Secretary of program and management problems and 
recommends legislative, regulatory, and operational approaches to correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the 
Office of Inspector General.  It conducts short-term management and program 
evaluations (called inspections) that focus on issues of concern to the Department, 
the Congress, and the public.  The inspection reports provide findings and 
recommendations on the efficiency, vulnerability, and effectiveness of 
departmental programs. 
OEI's Dallas office  prepared this report under the direction of Chester Slaughter, 
Regional Inspector General and Judith V. Tyler, Deputy Regional Inspector General. 
Principal OEI staff included: 
REGION  HEADQUARTERS 
Kristine Lykens, Project Leader  Wynethea Walker, Program Specialist

Nancy Juhn  Barbara Tedesco

Scott Whitaker

Lisa White

To obtain copies of this report, please call the Dallas Regional Office at 1-800-848-8960. 
Reports are also available on the World Wide Web at our home page address: 
http://www.dhhs.gov/progorg/oei  O V E R V I E W

PURPOSE 
To examine the experience of six Federally funded health centers during their States early 
implementation of the Childrens Health Insurance Program (CHIP) and/or concurrent Medicaid 
expansions within the context of the changing health care environment. 
RESULTS IN BRIEF 
With their tradition of serving low income children, Federally funded health centers have 
considerable potential for supporting the goals of CHIP.  These centers possess great aptitude 
for outreach and enrollment due to the level of trust and service they have established in their 
communities.  Recognizing the need to adapt to managed care environments, most centers 
have assertively joined managed care organizations or undertaken special developmental 
efforts,  ranging  from  infrastructure  enhancements  to  creation  of  entire  managed  care 
organizations. Not surprisingly, transition from cost-based reimbursement continues to be a 
challenge  for  centers  as  they  seek  to  better  manage  costs  and  devise  appropriate 
reimbursement formulae within their health plan contracting. 
BACKGROUND 
Legislation: Enacted as part of the Balanced Budget Act of 1997, CHIP was a response to 
increasing numbers of children lacking health coverage.  The legislation gives States flexibility 
to institute a separate health insurance program, expand Medicaid eligibility or combine these 
approaches.  A higher Federal match rate under CHIP than for primary Medicaid provides an 
incentive for States to implement the legislation.  Children applying for insurance through 
these programs must first be screened for Medicaid eligibility. 
Federally funded health centers: Generally located in communities with low to moderate family 
incomes, Federally funded health centers have been  major safety-net providers for low 
income children since the 1960s. Such centers were often, and continue to be, the primary 
health care source for growing numbers of children without health insurance when the CHIP 
was passed. Centers are funded by Section 330 of the Public Health Service Act, with some 
receiving State and local funds as well. In addition to primary health care services, these 
clinics also provide enabling services such as translation, health education, and transportation 
which are important to serving the CHIP population.  Besides CHIP implementation, Federally 
funded health centers have experienced other substantial and related changes in the health 
care system, particularly due to increased use of managed care by State Medicaid programs 
in the 1990s. 
Federally Funded Health Centers and CHIP  1  OEI-06-98-00320  Methodology: This qualitative case study report describes the experiences of six health 
centers involvement in CHIP implementation. We conducted site visits in August and 
September, 1998, during the very early implementation of the program.  Using  structured 
protocols,  we interviewed executive and clinical directors, financial officers, and other staff 
members. Staff from State Medicaid programs, CHIP agencies, managed care organizations 
and Primary Care Associations (PCAs)1 who interacted with the health centers were also 
interviewed. Using qualitative data analysis software, we analyzed each center as an 
individual case. In a second phase of this study, we will apply issues and insights from these 
case studies to gather additional information from a sample of Federally funded health centers 
concerning their involvement in CHIP implementation.  Knowledgeable staff from the  Health 
Resources and Services Administration (HRSA), the Health Care Financing Administration 
(HCFA), and the Office of the Assistant Secretary for Planning and Evaluation (ASPE), as well 
as persons interviewed in during our site visits, reviewed and commented on the draft of this 
document. Their suggestions and technical corrections are reflected in this final report. 
The States selected represent the variety of possible CHIP model choices and geographic 
regions.  Within each of these States we selected for study a center regarded as effective in 
implementing CHIP, by its State administrative agencies and area PCAs. The chart below 
identifies the State where the center is located, the CHIP model implemented by the State, 
program characteristics, and the actual center studied. 
State CHIP Program Models and Center Sites 
State  Model  Program Characteristics  Center Visited/City 
New Mexico  Medicaid  closely followed earlier State-initiated expansion, except  Health Centers of Northern New Mexico 
Expansion  for a cost-sharing element for higher income families  Espaoola, NM 
South  Medicaid  voluntary managed care with choice of HMO or one of  Family Health Centers 
Expansion  two rural managed care alternatives  Orangeburg, SC 
Carolina 
Colorado  Freestanding  preferring a private sector approach, even administrative  Plan de Salud de Valle 
CHIP Plan  functions often privatized  Fort Lupton, CO 
Connecticut  Combination  plans share same name, application form, and  Fair Haven Health Center 
Model  administrative agency  New Haven, CT 
California  Combination  administered independently, both programs encourage  La Clinica de la Raza 
Model  inclusion of safety-net providers  Oakland, CA 
Michigan  Combination  incentives to include safety-net providers in managed  Cherry Street Health Services 
Model  care via contract bidding preferences  Grand Rapids, MI 
Benefits covered in States we visited generally were comprehensive, and based either upon standard Medicaid services 
(including EPSDT) or large employer group benefits. All States, except Colorado, covered dental services at the time of 
our visit. 
Federally Funded Health Centers and CHIP  2  OEI-06-98-00320  CROSS-CUTTING ISSUES 
The following information identifies the most salient features and issues regarding the role of 
Federal health centers under CHIP.  These specific issues are discussed at length in the 
individual case studies which follow. 
Health Center Services: 
<<	 Except in Colorado, all centers visited operate school-based health clinics, and consider 
them  a  key  element  of  CHIP  health  service  delivery.  Centers  we  visited  offer 
comprehensive primary and preventative services, with some offering additional service 
enhancements such as mental health care, asthma and diabetes management, vision and 
dental services. 
<	 Dental care was identified as a critical service for children, with some centers giving 
children priority for appointments, since client demand often exceeds capacity. Yet, low 
Medicaid and dental insurance reimbursements are causing some centers to reconsider 
offering this service. 
<	 Capacity to serve uninsured families was identified as a problem by the large urban health 
center we visited in California.  Over 600 families were on a waiting list for center services 
at the time of our site visit, even though the center was expanding. 
Outreach and Enrollment: Health centers visited pursued a variety of enrollment activities. 
<	 For existing patients, activities ranged from recruitment from families already seeking 
services to direct telephone contact of potentially eligible families.  School-based clinics 
operated by the centers provided another avenue for outreach and enrollment. 
<	 These centers also reached out to surrounding communities to identify and enroll CHIP and 
Medicaid  eligible  children.  Of  the  centers  visited,  Fair  Haven  in  Connecticut  best 
demonstrated such grass-roots community outreach through  a Sign-up for CHIP Day, 
and door-to-door canvassing in a nearby housing project.  Several centers were targeting 
schools, where they operated clinics, to provide information and application assistance to 
families of children attending there. 
<	 Outreach/enrollment efforts have not been without challenges for the health centers. 
Policy ambiguity raised concern that CHIP benefits would be deemed a public charge for 
immigrant families, increasing their fear of government, and hindering enrollment of their 
eligible children, particularly in California. Although this issue was recently resolved legally, 
respondents believed significant effort would be required to overcome this fear. However, 
health centers feel they are in a strong position to work with these families due to the trust 
established in caring for them as patients.  Translation services available at most of the 
centers we visited would also facilitate reaching these populations. 
Federally Funded Health Centers and CHIP  3  OEI-06-98-00320  <	 Desiring to engage in more outreach efforts, center and PCA directors we interviewed 
expressed frustration at being hampered by a lack of resources for outreach workers. 
Connecticut health centers had applied for outreach contracts with the State and the 
Michigan center planned to apply for similar monies as well. The health center and PCA 
staff in California expressed concern over the inadequacy of the $25 for application 
assistance reimbursement due to the amount of personnel time it requires. 
Planning and Implementation: The extent of direct health center involvement in the planning 
and implementation of the CHIP plans in their States varied widely. 
<<	 Some centers testified at input forums and legislative hearings, while others participated 
exclusively through their PCA. Despite direct representation on planning committees, Plan 
de Salud in Colorado did not believe it heavily influenced the outcome. Advocacy for 
including a dental benefit did not secure its inclusion in the final plan. 
<	 Most centers visited noted that their primary role in CHIP planning and implementation was 
through their PCAs. In New Mexico, the PCA director is a member of the Medicaid Advisory 
Committee. The PCA director in California presented issues to the CHIP governing board 
and reported success in the managed care contracting system, which favors contracts that 
include  safety-net  providers,  such  as  health  centers.  The  Michigan  PCA  aided  its 
legislatures decision to include Medicaid expansions in their plan. 
<	 All health center directors we spoke to expressed a preference for Medicaid expansions to 
implement CHIP in their States.  Their reasons focused on Medicaids comprehensive child 
health benefits plus its pre-existing infrastructure.  New Mexico and South Carolina 
selected a Medicaid expansion model only. Center directors from most other States stated 
that preferences for privatization influenced their States decision to adopt a combination 
model or a free-standing program. 
<<	 Three States we visited, California, Michigan and New Mexico, had provisions either 
requiring managed care organizations to contract with health centers or providing incentives 
to include them in their contract bidding process. 
Adapting to a Changing Healthcare Environment: Of the centers visited, all but one operate 
in States which employ mandatory managed care for their health delivery system. Valuable 
strategies pursued by these centers to adapt to an environment in flux included use of 
managed care organizations, consolidation, networking and shared services. 
<	 Formation of or participation in health center-based managed care organizations - Usually 
with assistance of Integrated Service Network funds from HRSA, these efforts are teaching 
health centers the managed care business and allowing participation in decision-making 
which affects them. The exception is the center in New Mexico, which contracts with the 
Medicaid managed care plans in its service area. 
Federally Funded Health Centers and CHIP  4  OEI-06-98-00320  <	 Consolidation, networking and shared services - The health center in New Mexico grew 
from the consolidation of free-standing clinics from a seven-county service area. To 
enhance productivity, PCAs in Connecticut and South Carolina and the county-based health 
center network in California are coordinating such shared services as an auto-dial telephone 
contact  system,  payroll,  pharmacy  purchasing,  auditing,  laboratory  contracting,  and 
consulting services. 
<	 Infrastructure adjustments - Pervasive among health centers we saw, adjustments include 
upgrades to Management Information Systems, either made or planned, and addition of 
staff positions for financial management, managed care coordination and assistance to 
clinicians. Redesign or consultant projects to enhance productivity are also underway in 
centers visited in Connecticut, California and South Carolina. 
Medicaid reimbursement structures remain a major challenge for most health centers: 
<	 Most  health  center  directors  expressed  concern  over  the  phase-out  of  cost-based 
reimbursement by 2003, as stipulated by the Balanced Budget Act of 1997, particularly 
regarding the funding of enabling services they provide. Centers in South Carolina and 
Connecticut have undergone periods with and without caps on cost-based reimbursement 
rates which resulted in financial difficulties, requiring loans or financial recovery plans. 
Health centers in Michigan had agreed to a methodology to allow a phase-in to risk 
assumption, although HCFA approval was pending when we visited. 
<	 The health centers visited in California and Connecticut were assuming some risk for health 
services costs for managed care patients. The South Carolina center was starting a pilot 
project with the Medicaid program to capitate primary care services.  Other centers were 
also considering assuming some risk as part of their strategy for transitioning from cost-
based reimbursement. 
CASE STUDIES 
The Health Resources and Services Administration and the Office of the Assistant Secretary 
for Planning and Evaluation expressed strong interest in this study of health centers early 
involvement in CHIP implementation. To meet their needs, we prepared the following resource 
document consisting of case studies of health centers we visited in six different States. In it, 
the issues described above are outlined in greater depth as they relate to specific centers. 
Federally Funded Health Centers and CHIP  5  OEI-06-98-00320  T A B L E   O F   C O N T E N T S

PAGE 
OVERVIEW  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

HEALTH CENTER CASE STUDIES

Fair Haven Health Center, New Haven, Connecticut  . . . . . . . . . . . . . . . . . . . . 12

La Clinica de la Raza, Oakland, California . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Cherry Street Health Services, Grand Rapids, Michigan  . . . . . . . . . . . . . . . . . .  27

Plan de Salud del Valle, Fort Lupton, Colorado  . . . . . . . . . . . . . . . . . . . . . . . . 34

Family Health Centers, Orangeburg, South Carolina . . . . . . . . . . . . . . . . . . . . . 41

Health Centers of Northern New Mexico, Espanola, New Mexico  . . . . . . . . . . .  48

ENDNOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55

BIBLIOGRAPHY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60

APPENDIX A: Documents Reviewed  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  A-1

Federally Funded Health Centers and CHIP  6  OEI-06-98-00320  I N T R O D U C T I O N

PURPOSE 
To examine the experience of six Federally funded health centers during their States 
early  implementation  of  the  Childrens  Health  Insurance  Program  (CHIP)  and/or 
concurrent Medicaid expansions within the context of the changing health care 
environment. 
BACKGROUND 
For the past three decades, Federally funded health centers have been a critical part 
of the health care safety-net for low income families.  These centers have struggled 
in the 1990s to continue to fulfill this mission as States have moved to managed care 
for their Medicaid programs.  Adaptation is also needed as States adopt a variety of 
approaches to implementing CHIP.  Since services for children are a large component 
of their programs,  these health centers hold considerable promise in helping realize the 
goals of the CHIP legislation.  Thus, the Health Resources and Services Administration 
(HRSA) and the Office of the Assistant Secretary for Planning and Evaluation (ASPE) 
have expressed strong interest in looking at the involvement of centers in the early 
implementation of CHIP. 
Childrens Health Insurance Program 
As of 1999, an estimated ten million children in the United States were uninsured.2 
The Balanced Budget Act of 1997, in a new Title XXI of the Social Security Act, 
created  CHIP.  Authorized for ten years, and funded at $20.3 billion from 1998-
2002,3  the CHIP program targets children in low-income families (generally under 
200% of the Federal poverty level) with the intent of providing them with the same 
quality health care enjoyed by most privately insured children. 
The legislation gives States flexibility in designing their programs.  They may simply 
expand Medicaid eligibility for children, institute a separate health insurance program 
or use a combination of these approaches.  If Medicaid expansions are used, the same 
benefits and administrative rules used by the existing Medicaid program apply.  States 
which previously expanded Medicaid for children, or created State-specific programs, 
are allowed to expand eligibility beyond 200 percent of the Federal poverty level to 50 
percentage points higher than their existing eligibility limits.4  If a State creates a new 
health insurance program for children, they may establish different benefits within 
Federally  legislated  minimum  standards.  For  example,  preventative  services  are 
required, but dental services are optional. These new programs may also establish a 
separate agency to administer the program. The Health Care Financing Administration 
(HCFA) is responsible for administering CHIP, with joint oversight by HRSA. 
Federally Funded Health Centers and CHIP  7  OEI-06-98-00320  Because the CHIP legislation provides higher rates of Federal matching funds than the 
existing Medicaid program, the Medicaid benefits package frequently is richer than 
most private insurance. In addition, since Medicaid is an entitlement, screening children 
for Medicaid eligibility first is required. Studies have shown that the percentage of 
eligible children enrolled in the Medicaid  program has been low (about 70% nationally 
5) and is even lower in some States and among minority children.  Consequently, policy 
makers and analysts anticipate large numbers of children applying for CHIP will actually 
enroll  in existing Medicaid programs. 
Federally Funded Health Centers and CHIP 
Health Centers and Provider Networks 
Federally funded health centers are an integral part of the safety net of health 
providers for uninsured children and adults. These health centers, under the Public 
Health  Services  Act,  Section  330,  are  generally  located  in  neighborhoods  or 
communities near low and moderate income families. They have long been the 
traditional health service provider for many of the children now eligible for CHIP.  These 
clinics  also provide enabling services such as translation, transportation, health 
education, case management and other social services important to meeting the needs 
of this population. 
Medicaid program contracting with managed care organizations has been developing 
since  the  early  1990s.  Currently,  the  majority  of  States  require  managed  care 
enrollment for at least some of their child and young adult populations.  The CHIP 
legislation is expected to accelerate these changes in both Medicaid service delivery 
and reimbursement structures. However, some policy makers and analysts have 
expressed concern regarding the extent to which Federally funded health centers are 
incorporated into the provider networks for Medicaid managed care organizations.6  An 
analysis of Medicaid managed care contracts found substantial variance in whether 
States require or encourage managed care organizations to incorporate safety-net 
providers into their networks.7 
Adapting to Managed Care 
Assisting centers in the adaptation  to health care systems changes is the focus of the 
HRSAs Center for Managed Care. Created in 1996, it provides technical assistance 
and training opportunities for the health centers. HRSA commissioned a study of the 
impact of managed care on the health centers. The study described numerous 
adjustments and emerging issues for the centers in adapting to these changes, 
including strategic decision-making regarding managed care, formation of safety-net 
provider  owned  and  operated  managed  care  organizations,  financing  and 
reimbursement, contracting, staffing, patient care management and relationships with 
State governments.8 
The financial viability of safety net providers, including the health centers, has been 
of considerable concern to policy analysts beyond HRSA.  Studies in several States 
Federally Funded Health Centers and CHIP  8  OEI-06-98-00320  have shown centers to be under considerable pressure to compete with private 
providers for inclusion in managed care provider networks, and to gain or retain 
patients, and from cost competition.9,10  In order to meet contract requirements and 
operate effectively in managed care organizations, health centers need to make 
infrastructure and operational changes in areas such as management information, 
financial  management,  staffing,  patient  management,  and  quality  assurance 
reporting.11,12 
Reimbursement is a major issue in health center viability due to managed care 
organizations preference for capitation of primary care providers. Since health centers 
often  provide  enabling  services,  typically  not  provided  by  private  primary  care 
providers, these services are not generally built into reimbursement methodologies, and 
recovery of the associated costs becomes a concern.  The risk assumption implicit in 
capitation  is  very  new  to  most  health  centers  who  may  lack  the  necessary 
management information and financial management infrastructure to manage risk.  Risk 
assumption also concerns centers, many of whom operate with small cash reserves. 
Cost-based reimbursement to health centers, currently required of Medicaid programs, 
is being phased-out by 2003.  Furthermore, State CHIP Programs are not bound by this 
requirement and may not always provide cost-based reimbursement to the centers.13 
METHODOLOGY AND SCOPE 
This study provides a description of the early experiences of Federally funded health 
centers in the implementation of State CHIP and/or Medicaid expansions.  We 
conducted the study in two phases.  The first phase, reported here, involved case 
studies of six selected Community Health Centers and their interaction with State 
programs and their Primary Care Associations (PCAs).  From this Phase I report we are 
designing a follow-up study to obtain representative, national information on centers 
experiences and issues regarding their participation in the implementation of CHIP and 
Medicaid childrens expansions. 
Site Selection 
We purposively selected six case study States: California, Colorado, Connecticut, 
Michigan, New Mexico, and South Carolina. The following criteria were used, resulting 
in the sample characteristics described below. 
<  Type of Grantee:	 A combination of health centers which included funding for 
Community Health Centers and Migrant Health Centers.14 
<  State Program Type:	 The  States  selected  are  using  a  combination  of  a  CHIP 
program and Medicaid expansions, a CHIP program only, or 
Medicaid expansions only. 
Federally Funded Health Centers and CHIP  9  OEI-06-98-00320  <  Service Delivery:	 Although  most  States  are  primarily  using  managed  care 
delivery systems (also true in our sample), one State used a 
fee-for-service delivery system for a small voluntary managed 
care component. 
<  Geography:	 States represented include the east and west coast, the 
midwest,  the  inter-mountain  west,  the  southwest  and 
southeast regions of the country.  The health centers are 
located in large and small cites, as well as rural areas. 
After selecting sample States, we contacted State officials and PCA directors in these 
areas for recommendations of health centers they considered to be successfully 
involved in the early implementation of CHIP and Medicaid expansions.  One health 
center per State was chosen as the focus of Phase I of our study.  The following 
health centers were selected: Fair Haven Health Center, New Haven, Connecticut; La 
Clinica de La Raza, Oakland, California; Cherry Street Health Services, Grand Rapids, 
Michigan; Plan De Salud Del Valle, Inc., Fort Lupton, Colorado, Health Centers of 
Northern  New  Mexico,  Espanola,  New  Mexico;  Family  Health  Centers,  Inc., 
Orangeburg, South Carolina. 
Data Collection and Analysis 
We  used three methods of obtaining data for our study.  First, we conducted 
structured, in-person interviews at the Federally funded health center, the PCA, the 
State Medicaid and/or CHIP agency and, if applicable, a managed care organization 
which had a CHIP and/or Medicaid contract with the health center.15  We also analyzed 
data from the Uniform Data System of the Bureau of Primary Health Care for each of 
the health centers we visited.  These interviews were conducted in August and 
September, 1998, during the very early in the implementation of CHIP. Finally, we 
reviewed documents requested from the interviewees concerning the implementation 
of CHIP and Medicaid expansions in their States. 
Structured interview protocols were developed to collect qualitative data from the 
health centers and the other actors.  For the health center interviews, separate 
protocols were developed for the Executive Director, the Chief Financial Officer, and 
the Medical Director or senior pediatric medical staff member.  In a few health centers 
we were fortunate to be able to interview an outreach worker or migrant health 
worker.  We pretested our protocols in a site visit to Connecticut, with excellent 
results, and were thus able to fully use this site visit in our study.16  Site visits were 
then conducted in the remaining five States.  All interviews were audio-taped with the 
permission of the persons interviewed. 
In addition to the interviews, we asked each health center to provide selected tables 
from their most recent Uniform Data System annual report for background information 
regarding patient demographics, revenue sources, services provided and staffing. 
Furthermore, we asked each entity we visited to provide documents which would help 
Federally Funded Health Centers and CHIP  10  OEI-06-98-00320  us understand the CHIP and/or Medicaid program in their States, their role in the 
implementation of the program, and significant issues regarding the program.  As a 
result,  a considerable range of documents was collected and reviewed in the analysis 
of each case in this study.  Examples of documents collected included general health 
center  and  CHIP  outreach  materials,  application  forms,  State  legislation  and 
regulations, managed care contract templates, managed care provider and member 
manuals, and State guidance memoranda.  A complete listing of these materials is 
found in Appendix A. 
To analyze the information obtained in our interviews, each tape was transcribed.17 
We then used a qualitative data analysis software package18 to code each transcript 
using descriptive and analytic categories developed by the study team.  Reports were 
generated for each category, linking the responses of all interviewees in each State. 
Thus, we are able to summarize, compare and contrast a number of perspectives on 
each category or issue we identified.  This report consists of a case description for 
each of the health centers within the context of their respective States. 
Since health system changes for childrens health care are expected to accelerate as 
a result of CHIP, we refer to necessary adjustments of health centers as CHIP 
Readiness.  This report addresses these readiness issues, as well as health center 
involvement in CHIP implementation, outreach activities, and provision of childrens 
health care services.  It also includes our assessment of the key factors underlying the 
health centers  successful involvement in CHIP and/or Medicaid expansions. 
HRSA, HCFA, ASPE, and those we interviewed at the sites reviewed and commented 
on the material in this report.  Their suggestions and technical corrections are reflected 
in this final report.  None voiced any substantive objection to the material.  A request 
was made for additional information on enrollment numbers at the time of our visits. 
Although these numbers were not always available, they were incorporated in the 
report where we had the information. 
A second phase of this study applies issues and insights from these case studies to 
developing  a  national  survey  of  Federally  funded  health  centers  and  CHIP 
implementation.  In early 2000, we plan to release a report based on this survey and 
the insights gathered through the case studies.  Due to comments regarding the draft 
of this report, we plan to explicitly ask for information on outstationing of Medicaid 
eligibility workers. 
We conducted our study in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency. 
Federally Funded Health Centers and CHIP  11  OEI-06-98-00320  FAIR HAVEN HEALTH CENTER 
New Haven, Connecticut 
State Model: Combines Medicaid expansions with a free-standing program.  Programs share name,

application form, and administrative agency for easy client transition/welfare stigma reduction.

Center Highlights:

<  Prior experience with managed care; developer and member of a managed care organization of

Federally funded health centers; 
<  Added managed care coordinator to staff, and plans future MIS upgrades; 
<  Aggressive and creative outreach activities, largely self-funded with grant applications pending; 
Challenge: The center faces reduced reimbursement rates due to the capitation level for primary care versus 
the higher, fee-for-service rate received from another managed care plan. This disparity possibly threatens 
funds which subsidize enabling services and care for the uninsured. 
Connecticut CHIP Model 
Several  of  those  interviewed  stated  that  various  legislative  and  administrative 
components have been very supportive of health insurance for children in recent years. 
In fact, prior to the national Childrens Health Insurance Program (CHIP) legislation, 
Connecticut had instituted a set of optional Medicaid childrens expansions.  This 
program, entitled Healthy Start (not a HRSA Healthy Start program), expanded 
Medicaid for pregnant women and children, through age 11, to 185 percent of the 
Federal poverty level (FPL). 
To implement the CHIP legislation, Connecticut utilizes a combination model of 
Medicaid childrens expansions, and a separate Childrens Health Insurance Program. 
Both parts of the model use continuous eligibility for 12 months before re-application 
is necessary, and are administered by the Department of Social Services. The Medicaid 
portion, called HUSKY A, expands Medicaid eligibility to children in families with 
incomes up to 200 percent of the FPL. Benefits for HUSKY A children match those of 
traditional Medicaid recipients. HUSKY B, the separate CHIP portion, is for children in 
families at incomes between 200 percent and 300 percent of the FPL and is State-
specific. Families at incomes greater than 300 percent of the FPL may purchase 
HUSKY B for their children for an unsubsidized premium. 
The HUSKY B benefits are based upon those of three State employee options. 
Benefits include required services, as well as mental health and substance abuse, 
prescription drugs, durable medical equipment and dental services.19  Service delivery 
is provided by contracting with managed care organizations, as has been the case for 
the majority of Connecticut Medicaid recipients since 1995. 
Federally Funded Health Centers and CHIP  12  OEI-06-98-00320  Health Center Background 
Fair Haven Health Center is a medium sized center, which served about 10,000 
patients in 1997, and has been in operation for over 25 years. The health center 
consists of one main clinic, three school health clinics, and a site at a housing project 
for the elderly.  The main clinic is located in a largely Hispanic area of New Haven. 
Since nearly 60 percent of the centers patients are Hispanic, about half of the centers 
patients  are  estimated  to  need  bilingual  services  or  translation.  Children  and 
adolescents comprise a substantial portion of the patient population (about 50%).20 
As described later, a full range of preventative and primary care services, as well as 
some specialty services, are provided to children. Our visit was conducted in August 
1998, during the early implementation of the Connecticut program. 
Planning and Implementation 
Fair Haven and its Primary Care Association (PCA) reported that they had little 
influence on the final model chosen in Connecticut.  However, all parties acknowledged 
that the required opportunities for input through legislative testimony were provided. 
The Connecticut Primary Care Association (CPCA) was in the process of hiring a new 
Executive Director during the period of CHIP deliberations and this may have decreased 
their level of influence.  Both the health center and the PCA indicated that their 
preference was to use a Medicaid expansion for all children.  Their rationale was that 
the administrative infrastructure was already in place, and Medicaid benefits are the 
most comprehensive.  However, much of the States consultation regarding the 
development of the plan was with the legislatively funded Childrens Health Council, 
of which the CPCA is a member. 
Collaboration between the HUSKY Program and the Federally funded health centers 
appears  to  be  growing.  The  CPCA  annual  meeting  in  June  1998  focused  on 
collaboration generally, and Planning for HUSKY was the focus of one of the meeting 
sessions.  The Deputy Commissioner of the Department of Social Services addressed 
the health centers regarding implementation and outreach for the program and provided 
applications and outreach materials for center use at that session.  The CPCA has also 
submitted a grant proposal for HUSKY outreach, as discussed in the next section. 
Outreach for CHIP 
Utilizing its existing resources, Fair Haven Health Center initiated HUSKY outreach 
activities from the very beginning of the program. These activities were good examples 
of  local,  grass-roots  outreach  in  action.  The  health  center  outreach  worker 
blanketed the business area of the Fair Haven neighborhood with a bilingual flier, 
specifically aimed at their potential patient population,21  and alerted them to the 
HUSKY insurance program and services offered by the health center.  At a local 
housing project, door-to-door canvassing was also conducted to disseminate HUSKY 
program information and to take some on-the-spot applications, which an outreach 
worker would mail in.  Area businesses were involved at the request of the health 
center, with a local branch bank co-sponsoring a Sign-Up for HUSKY Day in the bank 
Federally Funded Health Centers and CHIP  13  OEI-06-98-00320  lobby on the busiest day of the month.  The health center noted plans to conduct 
outreach and applications for the HUSKY program at their school sites, when the 
school year started.  Although numerous applications were being submitted, only about 
50 children had been added to the Community Health Network, the plan formed by the 
health centers, at the time of our site visit when outreach activities were in an initial 
stage. 
State resources for HUSKY outreach include an allocation for community grants of 
$450,000.22  Shortly before our site visit, responses were due to a Request for 
Applications for outreach grants ranging from $20,000 to $100,000.  Fair Haven is 
part of a local coalition in New Haven which is applying for a $20,000 grant to do local 
advertising and outreach activities to augment its activities described above.  The 
CPCA also submitted a proposal to do a Statewide media campaign for HUSKY, that 
would target adolescents and young parents, a very hard to reach group.  The CPCA 
also plans to utilize their auto-dialer phone system, a PCA shared service for the 
health centers, to tailor customized telephone messages to the existing clientele of 
the health centers.  The Connecticut Childrens Health Council had also applied for 
$500,000 from the Robert Wood Johnson Foundation, Covering Kids Initiative. 
The Department of Social Services has contracted with Benova, an enrollment broker, 
to provide outreach and enrollment services.  This is the same enrollment broker 
Connecticut uses for its regular Medicaid managed care program.  Outreach materials 
and applications were printed and distributed Statewide.  The health center indicated 
an early problem in obtaining application forms in Spanish from the enrollment broker. 
However, this was resolved by the direct distribution by DSS to the PCA.  The 
enrollment broker accepts telephone applications via a 1 - 800 number as well. 
Some problems with outreach and enrollment were identified by the health center 
personnel.  One was the interface between HUSKY A (Medicaid) and HUSKY B (the 
separate CHIP program) enrollment processes. Applications for HUSKY B are screened 
for Medicaid eligibility by the enrollment broker.  If Medicaid eligibility is deemed likely, 
the application is referred to DSS for processing.  This often requires additional 
documentation for the application, which is forwarded to the family for response. 
Concern was expressed that this procedure made it easier for families to get lost in the 
process. 
A second critical concern was expressed regarding children of immigrants and migrant 
workers engaged in seasonal farmwork.  Some families may have children born in the 
U.S., and thus eligible for Medicaid or CHIP, whereas older children and parents are 
undocumented.  The HUSKY application form does request citizenship status, but for 
the children only.  However, some felt the concept that children of undocumented 
parents might be eligible for such benefits is hard to convey to the immigrant 
population.  This issue was identified for additional training of outreach workers and 
application assistants. 
Federally Funded Health Centers and CHIP  14  OEI-06-98-00320  Health Center Services for Children 
Primary/Preventive Services 
Fair Haven Health Center offers a comprehensive range of primary and preventative 
services  to  the  children  they  serve.  These  services  include  well-child  care, 
immunizations, pre-natal and delivery care by certified nurse midwives, pre-natal and 
other health education, family planning, and primary care for illnesses.  This care is 
delivered at the main clinic and three school health clinics operated by the health 
center. The operation of the local Women, Infants and Children (WIC) program by the 
health center at their main clinic allows families to centralize most of their health care 
needs. Food vouchers and nutritional education are also provided by the WIC program. 
The  health  center  operates  three  school-based  health  clinics,  which  are  a  key 
component of their delivery of health care to children.  Connecticut strongly supports 
school-based health care. In this case, school-based clinics are funded through a State 
program under which the City of New Haven contracts with the health center.  The 
main clinics child care is staffed by pediatricians and nurse practitioners, since their 
affiliated hospital does not grant  admitting privileges to family practitioners.  The 
school-based clinics, located in an elementary, middle,  and high school, also provide 
preventative care and health education, as well as some episodic care for illness, such 
as nebulizer treatments for asthma.  These clinics are staffed by nurse practitioners. 
Enabling and Specialty Services 
Several enabling services are also available to the families of children served by Fair 
Haven. The health center has a strong social service department which provides case 
management and outreach services.  A particularly strong outreach program for well-
child care has contributed to the 98 percent immunization rate by this center for 
children under age two.  This successful outreach effort also includes transportation, 
when necessary, by the outreach worker.  Bilingual medical staff and translators at the 
clinic are also an important enabling service of the center, which serves a largely 
Hispanic population.  This combination of  bilingual staff and translation was reported 
to work well, with occasional difficulty encountered during after-hours telephone 
contacts where client family members or neighbors needed to assist. 
Fair Haven is able to provide some specialty services to children at the main clinic in 
addition to its central preventative and primary care services.  With a board certified 
developmental pediatrician on staff, comprehensive developmental assessments can 
be conducted at the clinic which, otherwise, would require referral to a child guidance 
center, often with considerable waits.  Mental health services are not provided by 
health center staff; however, child guidance center staff conduct evaluations at the 
clinic weekly.  Obstetrical and gynecological services, including family planning and 
pre-natal education, are also provided by certified nurse midwives at the clinic.  Dental 
services are not offered, although the other Federally funded health center in New 
Haven does offer them.  Dental care was noted as a problem for children served by the 
center, since very few local dentists accept Medicaid patients.  As a result, dental 
Federally Funded Health Centers and CHIP  15  OEI-06-98-00320  service capacity was viewed as inadequate for the needs of poor children.  The health 
center staff indicated that referral networks for childrens specialties are quite good, 
since most of these services are provided by the Yale faculty, who are members of 
local managed care organizations. 
Fair Haven staff were confident that many of the children already served by the health 
center would obtain HUSKY.  The significance of this coverage, beyond additional 
revenue, was an improvement in the treatment options available for these children. 
For example, the medical staff indicated that concerns about prescribing some costly 
medications would be alleviated, as would delays in non-emergency specialty care due 
to waiting times to obtain subsidized care.  However, availability of prosthetics, 
orthotics and durable medical equipment for disabled children was still perceived to be 
problematic. 
CHIP Readiness 
Managed care participation is a critical component of the Federal health centers 
readiness for CHIP and prior events in the Medicaid program had well-prepared Fair 
Haven.  The State implemented a mandatory Medicaid managed care waiver for 
younger adults and children in 1995.  In the words of the health center director, ...I 
think CHIP will all flow from this.  So, I think that in some ways Medicaid managed 
care has prepared us for CHIP.23  Connecticut Federally funded health centers 
responded to the introduction of Medicaid managed care through a strategy of  forming 
their own managed care organizations.  The Community Health Network (CHN) is the 
plan formed by the health centers and includes the New Haven area.  This strategy 
was developed largely through a HRSA Integrated Service Network project coordinated 
by the PCA.  Each of the original health centers contributed financially to the start-up 
costs as well.  The PCA director at that time became the director of CHN.  The health 
center and the PCA rationale for creating their own plan was to assure continuity and 
quality of care for their patients, as well as a desire for the care to be managed by the 
centers and their clinicians, rather than an insurance company.  This health center also 
participates in a local managed care plan operated by Yale University. 
Although Fair Haven was already providing after-hours coverage and emergency room 
triage, they cited several adjustments necessary for managed care.  The foremost of 
these was to augment staffing associated with referral management, a function of 
medical  assistants  in  this  center.  Fair  Haven  is  one  of  several  health  centers 
participating in a patient visit re-design project on the East coast.  This project has 
identified a significant need for the center to augment their ancillary medical staff to 
achieve  greater  efficiency  of  clinician  time.  This  center  is  also  pursuing  Joint 
Commission accreditation to strengthen its market position.  In addition, substantial 
administrative adjustments are being made, as described below. 
Business infrastructure improvements in this health center  largely focus on a new 
management information system (MIS). Fair Haven has issued a Request for Proposals 
to replace its current system, which is over 12 years old, although some upgrades 
have been made over the years.  A key feature of the new MIS will be integration of 
Federally Funded Health Centers and CHIP  16  OEI-06-98-00320  software modules and databases, many of which are now separate.  An appointment 
component, billing, patient information and report writing capabilities are integral to the 
new system.  Although a clinical information component will not be initially included 
in the system, it may be added in the future. 
Administrative staffing adjustments were necessitated, largely in the billing area. For 
example, considerable time of the billing coordinator is now allocated to coordination 
with the managed care organizations.  Additionally, the center has added a managed 
care coordinator, who also has considerable interaction with the managed care 
organizations, particularly in credentialing activities. 
Reimbursement for health care services was the most critical concern identified by 
both Fair Haven and the PCA.  When the Connecticut Medicaid program implemented 
managed care in 1995, they initially stopped payment of cost-based reimbursement 
for health centers in their contracts with managed care organizations.  The health 
center and the PCA emphasized that this policy drastically reduced their Medicaid 
revenues, causing Fair Haven to deplete all its cash reserves, and take out a line of 
credit to cover operating expenses while this policy was disputed by the centers and 
the PCA. 
The HCFA and HRSA intervened to resolve this problem, resulting in the State 
Medicaid program negotiating a settlement for these disputed reimbursements in April, 
1998.  The payments were made retroactive to April, 1996 when the centers first 
asserted their right to cost-based reimbursement under Medicaid managed care.  The 
negotiated payment amounts to approximately 64 percent of the disputed payments.24 
The wrap-around payments for cost-based reimbursement, supplemental to capitation 
or fee-for-service payments, were initially paid to the managed care organization for 
pass-through distribution to the health centers.  However, effective September 1998 
the Medicaid program began distributing these payments directly to the health centers, 
based upon submitted encounter data. 
Community Health Network is currently paying their health centers a capitated rate for 
primary care services, and fee-for-service for specialty care.  Fair Havens other 
managed care plan reimburses all services on a fee-for-service basis.  The health center 
emphasized that these wrap-around payments  primarily support the enabling services 
offered by health centers, and subsidize their care for the uninsured. 
The reliance of the health centers on cost-based reimbursement, which is being phased 
out as a Federal requirement as of 2003, is a continuing issue for the Medicaid portion 
of the HUSKY plan.  HUSKY B (the separate CHIP program) does not require cost-
based reimbursement to these centers. 
Key Factors for Success 
Fair Haven was identified to our study team as a health center which is successful in 
its early implementation of the CHIP program in Connecticut.  Several reasons for its 
success are identified in the case study described here.  Foremost of these elements 
Federally Funded Health Centers and CHIP  17  OEI-06-98-00320  of  success  is  the  strong  primary  care  program  they  offer  for  children  in  their 
community,  since this positions them well to serve client needs under CHIP.  Outreach 
to children, a vital factor, has been integral to their health care delivery model.  This 
outreach includes three school-based clinics,  well-child and immunization services, and 
recent, enthusiastic grass-roots efforts to enroll children in the HUSKY program. 
Another significant success factor for Fair Haven has been its commitment to making 
a broad range of adjustments to accommodate the changing health care environment 
in which it operates.  These adjustments include active participation in a health center 
operated managed care organization, initiated when Connecticut made the transition 
to Medicaid managed care in 1995.  Staffing realignments, participation in a patient 
visit re-design project, and upgrades to the management information system have also 
been essential adjustments. 
Challenges to continued success for the health center remain.  The most pressing of 
these centers on reimbursement issues.  When cost-based reimbursement for Medicaid 
patients was temporarily ended, a financial crisis arose which depleted the health 
centers cash reserves and required a line of credit to maintain existing operating 
levels.  Since cost-based reimbursement for Medicaid is being phased out and 
reimbursement for HUSKY B children will not be cost-based, the question remains 
whether this, and other health centers, can make the necessary adjustments to their 
revenues and costs.  Lack of reimbursement for enabling services, such as outreach, 
health education, and translation have yet to be addressed. 
Federally Funded Health Centers and CHIP  18  OEI-06-98-00320  LA CLINICA DE LA RAZA 
Oakland, California 
State Model: Combines Medicaid expansions with a freestanding CHIP program. Administered by separate

agencies; both include mechanisms to encourage inclusion of safety-net providers. 

Center Highlights:

<  Use of extensive personal contact for CHIP outreach, to potentially eligible client families;

<  Affiliation with a local organization of health centers yielded shared resources, including payroll,

hardware and software systems, and a patient database. Consolidation of MIS functions is a future 
consideration. 
Challenge: Difficulties have emerged in the recruitment of eligible children of undocumented parents, with 
prior ambiguous INS policies creating a fear factor within this community. 
California CHIP Model 
To implement CHIP, California utilizes a combination model of Medicaid childrens 
expansions, and a separate CHIP program which is called Healthy Families. The 
Medicaid childrens expansion, administered by the Department of Health Services, is 
only a small portion of the State CHIP Plan in California. Medicaid eligibility was 
increased to 100 percent of FPL for all children up to age 19, 200 percent FPL for 
children up to age one, and 133  FPL for children up to age six, and benefits match 
those of traditional Medicaid recipients. 
Eligible children, whose family income is between 100 and  200 percent of the FPL, 
will be enrolled in the separate Healthy Families Program which is administered by a 
free-standing  State  Agency  called  the  Managed  Risk  Medical  Insurance  Board 
(MRMIB).  The Board also administers a small business and other health  insurance 
programs for California.  Benefits for children in the Healthy Families Program are 
modeled after private employer health plans and include required services, as well as 
mental health and substance abuse services, prescription drugs, dental, vision, home 
health care services, and durable medical equipment.  Co-payments are required for 
some services, but are limited to $5.  Families pay a monthly premium of $4 to $9 per 
child with a maximum of $27 per family.25 
Prior to the CHIP legislation a small private program called Cal Kids was available for 
uninsured children.  This program, has a limited benefits package, yet continues to be 
available for undocumented immigrant children since no public funds are used. 
Of particular interest to this study is that both the Medicaid and Healthy Families 
Programs employ managed care for service delivery in all major population areas.  The 
Medicaid Program has a two plan requirement currently operating in 12 of the 26 
counties where managed care is available.  The two plans required in each service area 
Federally Funded Health Centers and CHIP  19  OEI-06-98-00320  are a commercial plan and a local initiative plan which must include traditional and 
safety-net providers such as health centers, county hospitals and county clinics.  The 
Healthy Families Program uses a market-oriented approach which reduces the monthly 
premium to $4 for the local initiative  plan in each service area, thus encouraging 
enrollment in those plans. A comprehensive methodology is used to weight  providers 
based upon their actual experience in delivering services to low income children. 
Health Center Background 
La Clinica de la Raza in Oakland (Alameda County) California is a medium sized health 
center, which served about 13,000 patients in 1997, and has been in operation over 
27 years.  The health center consists of three clinic sites and two school-based health 
programs.  The main clinic is located in a largely Latino area of Oakland.  Another clinic 
site is located in an ethnically diverse area of Oakland and serves Latinos, African-
Americans, Asians, and Africans.  The third site is a teen clinic.  Although the center 
is expanding its programs, over 600 families were on a waiting list for center services 
at the time of our visit, due to the large numbers of uninsured individuals in the area. 
Since 84 percent of the centers patients are Latino or other ethnic groups, the health 
center employs many bilingual or multi-lingual staff.  Children and adolescents comprise 
a significant portion of the patient population (about 54%).26  As described later, a full 
range of preventative and primary care services, as well as several specialty services, 
are provided to these children.  We conducted our site visit in California early in the 
implementation of CHIP in September 1998. 
Planning and Implementation 
La Clinica and the California Primary Care Association (CPCA) were actively involved 
in the planning and implementation of the Healthy Families Program.  The Chief 
Executive Officer of La Clinica is currently Chairman of the CPCA.  Largely through this 
affiliation, she and other health center directors testified in support of the program 
during the legislative process and later oversight hearings.  The position of the CPCA 
was to support an expansion of Medi-Cal, the States Medicaid program, since the 
infrastructure was in place and the health centers were major providers for the Medi-
Cal Program.  However, those interviewed acknowledged that implementing CHIP 
solely by a Medicaid expansion was unlikely in California at the time the enabling 
legislation was passed due to the States preference for market-oriented programs. 
Since  the  formation  of  the  Healthy  Families  Program,  the  CPCA  has  actively 
collaborated with the MRMIB on program planning and implementation.  A health 
center director is on the MRMIB advisory panel and the CPCA frequently presents 
issues to the Board.  One primary  health center concern has been the inclusion of 
health centers in the provider networks of managed care plans which contract with the 
Healthy Families Program.  In addition to the local initiative plans, the CPCA arranged 
for all health centers to be offered managed care contracts with Blue Cross, HealthNet 
and Omni where available.  Another success for the health centers was obtaining a 
waiver from Vision Services Plan (VSP), the Statewide vision plan for Healthy Families. 
The waiver allows health centers to contract with VSP, when historically, it has 
Federally Funded Health Centers and CHIP  20  OEI-06-98-00320  contracted with provider-owned practices only. 
Remaining implementation concerns of the health centers include capitation rates for 
dental providers, cultural and linguistic competency requirements for health plans, and 
implementation of the Special Populations Project and outreach.  Although a fee-for-
service dental plan is available Statewide, several health centers have noted that they 
have been unable to obtain a fee-for-service dental contract and that the capitation 
rates offered by the managed dental plans are too low for health centers to participate. 
The CPCA has been working with the California Dental Association on this issue. 
Medicaid cultural and linguisitic competency requirements for managed care plans in 
California are considered to be good, and efforts are being made to strengthen 
requirements in the Healthy Families Program in line with the Medicaid requirements. 
The CPCA also expressed concern regarding the implementation of a State-funded 
Special Population Project, under Healthy Families, which they hope will include 
migrant farm worker clinics, although they have currently been omitted. State outreach 
resources are discussed in the following section. 
Outreach for CHIP 
La Clinica de la Raza is actively engaged in outreach for  Healthy Families and the 
Medicaid program. The health center has sponsored and participated in health fairs 
where information and applications for these programs were distributed.  However, the 
major outreach activity of this health center is personal contact, via telephone, with 
families who are on the waiting list for health center services.  The waiting list is due 
to the extensive need for services among the uninsured, although La Clinica continues 
to expand its capacity and clinic hours.  Health center staff are working evening hours 
to telephone these families and notify them of the Medicaid expansions and Healthy 
Families  Program,  and  to  offer  them  assistance  in  completing  applications. 
Unfortunately, due to the mobility of this population, many of the families no longer 
have the same telephone number.  Nevertheless, contacting those recently placed on 
the waiting list  has yielded a better response rate.  Since our visit was early in the 
program, La Clinica knew of only three children served by their clinics who were 
enrolled in Healthy Families, although numerous applications were pending. 
The Community Health Center Network (CHCN), a local organization of health centers, 
is very active in outreach for the Medicaid and Healthy Families Programs.  They have 
assisted the health centers in developing a patient database for use with letters, phone 
calls,  and  health  center  specific  fliers  explaining  the  new  childrens  programs. 
Community Health Network staff have also provided training to health center staff on 
the application process.  Other local outreach activities, noted by CPCA, include 
distributing fliers in schools, malls, shopping centers, and daycare centers, and public 
service announcements and media releases. 
The most significant problem identified regarding outreach and enrollment is the  fear 
among immigrant families with eligible children about whether receiving CHIP benefits 
will  be considered a public charge.  Public charge refers to Immigration and 
Naturalization  Service  policies  regarding  receiving  legal  immigration  status  and 
Federally Funded Health Centers and CHIP  21  OEI-06-98-00320  sponsorship of family member immigration. Such sponsorship may be precluded if 
someone is deemed a public charge due to receipt of public benefits.27  Additionally, 
in California, a State program which monitored ports of entry for immigrants returning 
to California has previously requested repayment of benefits, including Medicaid, for 
re-entry.  This practice has been stopped, monies were returned by the Medicaid 
program, and the program was ended in April 1999.28,29  However, immigration 
attorneys throughout the State have advised immigrants not to sign up for any public 
benefits. Fortunately, on May 25, 1999, the INS issued a policy statement explicitly 
stating that receipt of Medicaid and CHIP benefits will not lead to a public charge 
designation, except for certain Medicaid nursing facility services.30  However, due to 
the lengthy period of policy ambiguity and the hesitancy of the Latino community to 
trust such pronouncements, it will take time to  overcome this former barrier. 
Because of these issues, all California respondents said the fear factor among 
immigrant families is the primary barrier to outreach and enrollment of their eligible 
children.  Enrollment numbers were lower than anticipated, at the time of our visit, 
particularly among Latino children.31  The application for Medicaid and Healthy Families 
only requests information regarding the childs immigration status and assures that 
information provided is confidential.  However, income verification requirements for the 
parents continue to raise concerns among these families.  La Clinica and CHCN staff 
verified the reality of this fear among their patient populations, and were very 
concerned about the lack of a clear INS policy regarding Healthy Families and public 
charge when assisting families with applications.  Even with a clear policy, they felt 
the fear factor would remain a problem until immigrant families start to trust the 
programs  after observing families enroll their children without repercussions. 
Allocation of State resources and procedures for Medicaid and Healthy Families 
outreach has been controversial in California.  The Medicaid program is responsible for 
outreach for both programs.  Although the health centers strongly supported allocation 
of grants for outreach, the States approach is to pay $25 per completed application 
to those  providing certified application assistance to families. Certification is obtained 
by completing a one day training on application assistance.  This policy is intended to 
diversify the sources of outreach and application assistance.  Some outreach money 
will also be allocated to counties and health centers which may be able to sub-contract 
for these resources. 
La Clinica and the CPCA felt that $25 was inadequate payment for application 
assistance due to the length and complexity of the joint application.  The application 
booklet  is  28  pages;  however,  this  includes  detailed  program  information,  and 
worksheets for pre-screening for program eligibility.  The application is available in 10 
languages.  The CHCN director emphasized the increasing need for an eligibility 
assistance function at each health center; yet some centers lack the resources to do 
this.  Another concern expressed by the health center and CHCN was the requirement 
that the first months premium be paid at the time of application by cashier check or 
money order, an inconvenience to many of the families applying for the program. 
After our site visit, the Medicaid program provided  updated information regarding 
Federally Funded Health Centers and CHIP  22  OEI-06-98-00320  outreach resources.  The application assistance reimbursement has been increased to 
$50. In fiscal year 1998/99 the State provided $1 million in mini-contracts to 
organizations and in fiscal year 1999/2000 the State recently released a Request for 
Proposals for $6 million in funds for outreach.  Additionally, the State changed its 
policy that required the first months premium to be paid by cashier check or money 
order to also allow personal checks.  In April 1999, a revised application was released 
which is only four pages long and which is available in 11 languages. 
Health Center Services for Children 
Primary/Preventive Services 
La Clinica de la Raza offers a comprehensive range of primary and preventive services 
to children.  Adolescent patients are also served at the health centers Teen Clinic. 
Provided services include well-child care, immunizations, primary care for illness, pre-
natal care and delivery, and a strong health education program which uses health 
promotion volunteers and community health workers.  In addition to the two major 
clinic sites and the teen clinic, the health center operates two school-based clinics, one 
in an elementary school and the other at a high school.  A major focus of the school-
based clinics is prevention.  At the high school, reproductive health education, 
parenting skills, dealing with peer pressure, and involving parents in health education 
programs are components of the prevention activity. 
Enabling and Specialty Services 
Preventive and community health workers  conduct outreach, as well as health 
education, through a strong community health education program. In addition to health 
education, translation services are key enabling services provided by La Clinica de la 
Raza.  The San Antonio clinic site is referred to as the International Clinic by health 
center staff.  Languages spoken by patients of the health center include Spanish, 
Ethiopian, Chinese, and Korean, plus others.  Most translation is provided through bi
lingual staff with occasional contractual assistance from a language center in Oakland, 
which also provides signing services for the hearing impaired. 
La Clinica also provides a sizeable range of specialty services to children.  The health 
center has a mental health clinic which serves its patients, as well as referrals from 
other providers.  Psychiatrists and psychologists are on staff and their mental health 
clinic has a contract to provide these specialty services for  health plans.  Staff noted 
that their clinic is the largest Spanish/English bi-lingual mental health provider in the 
area. Full vision services, including  opthalmology, optometry and eye glasses, are also 
available at the health center. Individual providers from the health center have 
contracted with the Vision Services Plan as  Healthy Families providers and the health 
center is expecting to secure a clinic contract as a result of the recent VSP policy 
change explained above. 
Dental services are provided by La Clinica at the main clinic site.  A long waiting list 
for dental services has resulted in the health center giving children and pregnant 
Federally Funded Health Centers and CHIP  23  OEI-06-98-00320  women priority for services.  The health center also partners with the Colgate 
toothpaste company three times a year to provide mass dental triage screenings for 
children.  They have found that about one third of the children just need preventive 
services, another third require priority services, and the remaining third are in need of 
specialty intervention.  The health center currently has five dental chairs, serving 800 
to 900, cases a month, and they plan to add five more chairs soon.  The health center 
has a periodontist on staff and hosts an orthodontal clinic staffed by dental residents 
bi-weekly. 
CHIP Readiness 
La Clinica de la Raza, and the local Community Health Network, have been in the 
forefront of California health centers ready for CHIP by virtue of their their proactive 
engagement in managed care.  The Alameda Alliance Health Plan is the local initiative 
plan in Alameda County.  It was formed under the two-plan model when the California 
Medicaid Program introduced managed care contracting.  They were the first local 
initiative plan in the State, becoming operational in January, 1996.  Community Health 
Center Network (CHCN) was formed as a Management Service Organization (MSO) by 
a 25 year old local association of clinics, whose member centers are key provider of 
primary care for the Alameda Alliance Health Plan. CHCN is the contracting entity for 
the  health  centers  with  this  plan.  When  the  Healthy  Families  Program  was 
implemented, the Alameda Alliance was able to obtain reduced premium status based 
on having the most traditional and safety-net providers in their network.32  CHCN 
passes on primary care capitation to health centers which participate in CHCN and 
pays for specialist services from the  remaining capitation funds. 
La Clinica management staff described several adjustments made by the health center 
in response to managed care.  They are undergoing a re-design process, examining 
their administrative processes, health center procedures, staffing and management 
information system.  Staff training has been an important component in adjusting to 
managed care.  The health center is attempting to institutionalize training through 
regular staff meetings, video training tapes, and cross-training of front desk and billing 
personnel.  Using a shared hand-held device purchased by CHCN, the health center has 
conducted waiting room surveys of their patient population to monitor satisfaction and 
reactions to changes in their operations. 
Clinic management has exerted considerable effort to involve clinical staff in decisions 
required by managed care.  Changes implemented with clinician input include moving 
health education and psycho-social  responsibilities from physicians and mid-level 
providers to nurses, health educators and social workers.  Nursing staff, in particular, 
have been added.  Additionally, the health centers chief pharmacist has aggressively 
pursued pharmacy managed care contracts and drug price discounts. 
Business  infrastructure  improvements  have  also  been  made  by  La  Clinica  and 
Community Health Network. Included are extensive revisions of their management 
information system.  Since 1996 numerous software programming changes have been 
made to accommodate billing requirements, referral management and staff access to 
Federally Funded Health Centers and CHIP  24  OEI-06-98-00320  multiple  databases.  Discussions  are  also  underway  regarding  consolidation  of 
management information functions through CHCN to include joint purchase of new 
hardware and software.  Shared services, also through CHCN, currently include payroll, 
auditing, laboratory and pharmacy contracts. The health center has hired additional 
administrative staff, including a patient omsbudsman, a managed care coordinator for 
credentialing and patient record audits, and more front desk staff. A managed care 
committee, consisting of health center staff, has been formed to address issues 
regarding the managed care contracts. 
Our interviews identified some reimbursement issues which pose challenges for health 
centers. The California Medicaid program sets interim rates for the health centers 
based upon their most recent cost reports and will continue to provide retroactive cost 
settlements  until  cost-based  reimbursement  is  phased  out  according  to  Federal 
legislation. The Healthy Families Program does not use cost-based reimbursement, 
which leaves reimbursement rate negotiations up to health plans and their contracting 
health centers. In preparation for the phase-out of cost-based reimbursement, La 
Clinica has accepted full risk professional services capitation, excluding hospital 
services, to gain experience in managing finances for primary and specialty care for 
commercial patients. As mentioned earlier, inadequate dental reimbursement from 
managed dental care plans is also an issue raised by La Clinica and the CPCA for the 
Healthy Families Program.  Because of the low rates, La Clinica has decided to only 
contract with the fee-for-service dental plan.  CPCA is working with the California 
Dental Association to address this issue on a Statewide basis. 
Key Factors for Success 
La Clinica de la Raza was identified to our study team as a health center which has 
been successful in early implementation of the CHIP program in California. Our 
interviews confirmed that the Community Health Center Network and the Alameda 
Alliance Health Plan are also in the forefront of traditional and safety-net managed care 
plans. In fact, they were the first to become operational in the State.  Several reasons 
for this joint success are identified in this case study.  Foremost of these elements of 
success is their proactive approach to entering the managed care market environment 
in California.  A significant part of their approach has been partnering with the 
Community Health Center Network, negotiating provider contracts as a group instead 
of as individual health centers, accepting risk for specialty services as a group, and 
sharing services provided through CHCN.  The Executive Director of La Clinica, when 
describing what makes an individual health center successful stated, Networking.  I 
dont know ... how they could possibly survive outside of a network right now.33 
Another aspect of La Clinicas proactive approach to managed care is working 
extensively  with  their  administrative  and  clinical  staff  to  identify  operational 
adjustments necessary for managed care work in their health center and involving the 
staff in the implementation of these adjustments.  Examples of this include formation 
of an internal managed care committee, a commitment to staff training, and engaging 
in a re-design project.  Expanding clinic hours and services, adding specialized staff 
with managed care responsibilities and realigning clinical staff responsibilities are also 
Federally Funded Health Centers and CHIP  25  OEI-06-98-00320  important adjustments which La Clinica has made. 
The largest challenge to successful participation in the California CHIP program for La 
Clinica and other health centers is overcoming the significant barriers to outreach and 
enrollment described earlier.  Even after clarification of the public charge policy the 
fear factor for Californias immigrant population will be difficult to overcome. 
However, having close ties with their community and the trust of their respective 
patient populations positions the health centers as key allies for alleviating fears and 
reaching these children and their families. 
Federally Funded Health Centers and CHIP  26  OEI-06-98-00320  C H E R R Y  S T R E E T  H E A L T H  S E R V I C E S  
Grand Rapids, Michigan 
State Model: Combines Medicaid expansions with a free-standing program. Inclusion of safety-net providers 
in managed care not required, but default assignments of patients provide incentives to do so. 
Center Highlights: 
<  Hired an outreach coordinator instead of an eligibility worker to conduct off-site recruitment and 
application assistance and tracking; 
<  Designated a managed care coordinator to oversee development of MIS system improvements; 
Challenge: HCFAs rejection of original reimbursement methodology forced return to cost-based settlements. 
Original plan included payment for recent program expansions, so a cost-based approach puts such 
programming at risk. 
Michigan CHIP Model 
Soon after the enactment of the CHIP legislation, Statewide forums were held, starting 
in October, 1997, to gather input on a CHIP proposal. With strong administrative 
support for privatization of governmental services, a totally free-standing program was 
proposed, and a plan using this model submitted to HCFA in December 1997.  When 
the State legislature convened in January 1998, the House held hearings on this plan, 
and discussions ensued regarding a combined approach of Medicaid expansions along 
with a free-standing program.  As a result, legislation was passed in March 1998 for 
a combination Medicaid expansion/private model.  HCFA approved the revised State 
plan in April 1998.  Implementation of the program began in May, and Statewide 
implementation was completed by September 1, 1998. 
Income eligibility levels for the Medicaid expansion are set at 185 percent of the 
Federal Poverty Level (FPL) for infants up to one year of age.  The remaining children 
up through age 18 are eligible for Medicaid if family income is less than 150 percent 
FPL.  The free-standing program, called MIChild, covers children in families at and 
below 200 percent FPL who are not Medicaid eligible.34  Both the Medicaid expansions 
for children and the MIChild program permit continuous eligibility for 12 months. 
Community health centers are among a group of providers who are allowed to deem 
presumptive eligibility for children. 
The Medicaid program and MIChild use an enrollment broker, Maximus, to process 
applications and choice of managed care plans.  For families who do not select a plan 
for their children, Maximus makes default assignments for Medicaid.  Although 
Medicaid health plans are not required to include health centers in their provider 
networks, the bidding procedure grants points to plans who contract with these 
centers in the allocation of default assignments.  The plan pays fee-for-service if there 
is no contract with an Federally Qualified Health Center in the county.  The three plans 
Federally Funded Health Centers and CHIP  27  OEI-06-98-00320  with the highest points in each county receive default  assignments.  Other health 
plans in the county which are not among the top three in enrollments receive no 
default assignments.  MIChild accepts any licensed HMO or PPO provider. 
Benefits for the Medicaid expansions are the same as the pre-existing Medicaid 
program.  MIChild benefits were designed based upon the State employee benefit 
package and are fairly comprehensive, by including prescription drugs, vision, dental, 
and home health services, as well as durable medical equipment, but with limitations 
on some therapy services.35  Mental health and substance abuse services are provided 
separately through a carve-out from the health plans whereby the MIChild program 
contracts directly with community mental health programs. 
Health Center Background 
Cherry Street Health Services, based in Grand Rapids, is a medium-sized health center 
which served over 17,000 patients in 1997.  The health center operates six clinic 
sites, including school-based health clinics, in Grand Rapids and Kent County. The 
patients seeking care at Cherry Street clinics are ethnically diverse and include African 
Americans (30%), Caucasians (30%), Hispanics (15%) and 25 percent in other 
categories .  About 10 percent of the patient population are estimated to need bilingual 
or translation services.  The majority (54%) of patients seen at the health center are 
children.  Although Cherry Street does not receive Migrant Health Center grant funds, 
they do see some children from migrant farmworker families at various sites during the 
three month crop picking season. As described later, the center provides a full range 
of preventive and primary care services, as well as several  specialty services to these 
children. We visited Michigan in September 1998, very soon after CHIP implementation 
was completed Statewide. 
Planning and Implementation 
Cherry Street Health Services was involved in the planning and implementation of 
MIChild and Medicaid expansions primarily through their Primary Care Association.  The 
PCA members had extensive discussions within the Association regarding their support 
of Medicaid expansions over a free-standing CHIP program. Many assumed that the 
free-standing model was a given, but the PCA decided to support a Medicaid expansion 
because  it  had  more  comprehensive  benefits  and  a  pre-existing  administrative 
structure. Since the Medicaid program had implemented managed care over a year 
before the passage of the CHIP legislation, provider networks and contracts were in 
place to serve a low income population through managed care plans, including one 
formed by the Federal health centers. When members of the legislature expressed 
interest  to include a Medicaid expansion as part of the CHIP plan, the PCA worked 
with legislators and other advocates to realize its inclusion. 
Additionally, the health centers were represented at three or four State input forums 
regarding the original, free-standing plan submitted by the State. The PCA was also 
involved in meetings of a group of child health related agencies in Grand Rapids that 
commented on the State plan. When the combination plan for Medicaid expansions and 
Federally Funded Health Centers and CHIP  28  OEI-06-98-00320  the MIChild program was ultimately developed, the PCA informed member clinics  of 
implementation activities.  In addition, it provided outreach information that assisted 
the health centers in enrolling their children in the appropriate CHIP program. 
Outreach for CHIP 
Cherry  Street  Health  Services  has  actively  engaged  in  outreach  following  the 
establishment of Medicaid expansions and MIChild.  They have an outreach coordinator 
whose primary responsibility is to enroll children.  Parents of its 2,400 self-pay children 
served by the health center were mailed a brochure explaining the program, eligibility 
requirements and how to apply.  The centers medical director has asked its providers 
to monitor child encounter forms for an indication of self-pay status so they can then 
inform parents about the programs and refer them to the outreach coordinator for 
application assistance.  The outreach coordinator also tracks applications for families 
she has assisted with the process to ascertain eligibility status and/or need for 
additional documentation. At the beginning of the school year, the coordinator gave 
presentations during registration activities and distributed information and applications. 
The outreach coordinator also distributes information and applications at neighborhood 
picnics, church-sponsored health fairs, job fairs and other local activities.  However, 
with six sites to cover, the center director noted that three or four outreach workers 
are needed, but that more staff resources arent available. This is, in part, due to the 
uncertainty regarding the amount of cost-based reimbursement which they would 
receive and the lack of supplemental CHIP funds being allocated to them. 
The Medicaid and MIChild programs have also conducted outreach activities on a 
Statewide basis.  Although these programs accepted applications  in July 1998 the 
kick-off press conference was held in late August after changes to the original 
application forms were made.  Radio and television advertisements were being aired 
by September when we visited, and plans were announced to send applications to all 
schools. Additionally, regional contracts for outreach activities were initially granted 
only to multi-group collaborative bodies, which are county-based groups largely 
composed of governmental agencies. Some health centers are involved in these 
groups, but many are not. The health center and PCA expressed concern about 
restricting outreach contracts to these groups, since Federal health centers are not 
members of these groups in some areas. Shortly before our visit, the State program, 
in an effort to increase enrollments, issued a request for proposals for 30 more 
outreach  contracts,  for  which  health  centers  would  independently  be  eligible. 
Applications for the MIChild program were accepted throughout the remainder of the 
year after April 1998 and in 1999.  However, beginning in 1999, re-enrollment after 
failure to pay premiums will only be accepted during three open enrollment periods. 
Although health centers are allowed out-stationed Medicaid eligibility workers to deem 
presumptive eligibility, Cherry Street had not yet implemented this option. Since the 
health center would need to pay half of the eligibility workers expense they decided 
to employ an outreach coordinator as a member of their staff. The PCA director said 
health centers were wary of presumptive eligibility.  They would receive capitated 
payments for the presumptive period, regardless of the final eligibility determination of 
Federally Funded Health Centers and CHIP  29  OEI-06-98-00320  the child. However, if a child was initially sick and needed significant care, their costs 
would exceed capitated revenues if the child was subsequently deemed ineligible and 
these  costs  would  be  assumed  through  the  HRSA  grant  resources,  as  though 
uninsured. 
The  health  center  and  PCA  directors  also  expressed  concerns  regarding  some 
administrative problems with the enrollment broker for both Medicaid expansions and 
MIChild.  One problem cited by the health centers managed care plan was that, at the 
time of our September site visit, the enrollment broker has been unable to transfer 
enrollment information to the health plans electronically.  Updated information, after 
our site visit, indicated that electronic transfer of MIChild eligibility verification became 
available in October 1998 and an electronic bulletin board became operational in 
February 1999.  Prior to October 1998, the health center indicated they expended 
considerable time on confirming program eligibility.  Finally, although a short, four 
page, application form is being used, it has been revised three times since its inception, 
which has caused some confusion and delays. 
Health Center Services for Children 
Primary/Preventive Services 
Cherry Street Health Services offers a comprehensive range of childrens primary and 
preventive services, including well-child care, acute care, immunizations, prenatal care, 
family planning, and pharmacy services.  The health center also has a Women, Infants, 
and Children nutrition program on-site.  Services are provided at the six clinic sites, a 
school-based health clinic, and through a traveling school health program  serving 16 
schools.  The traveling program offers medical and dental screening to students.  The 
health center has one part-time pediatrician on staff.  Most providers are either nurse 
practitioners or family practitioners.36 
Enabling and Specialty Services 
Health education is a significant enabling service provided by the health center.  For 
pregnant women they provide a State-funded program of maternal support services 
which focuses on health education, coupled with case management and home visits. 
Bilingual providers and translation services are available to non-English speaking 
families by two physicians and a number of medical assistants, all of whom  speak 
Spanish. Other enabling services provided by the health center include eligibility 
assistance,  case  management,  housing  assistance,  outreach  and  some 
transportation.37 
The health center also provides several specialty services  to their patients. The center 
has a sizeable dental program consisting of five dentists, three hygienists, and ten 
assistants, aides and technicians.  Mental health services are also provided at the clinic 
sites and mental health referrals for Medicaid and MIChild are available through 
community-based mental health providers. Limited vision services are also offered by 
the center. 
Federally Funded Health Centers and CHIP  30  OEI-06-98-00320  Although still early in program implementation, the health center has begun to see 
MIChild eligible children assigned to their clinics.  At the time of our site visit, 53 
children from the health center had been enrolled in MICHILD, and 123 had become 
newly eligible for Medicaid. However, the director is concerned about Cherry Streets 
ability to maintain its current range of services, largely due to decreases in the numbers 
of  families  assigned  to  them  with  Medicaid  coverage.  This  is,  in  part,  due  to 
competition for Medicaid patients as managed care was implemented in Michigan. 
However, the total Medicaid caseload Statewide has declined due to the effects of 
welfare reform.  The center director noted that the total number of patients seen by 
the health center is not decreasing but that more families are now served under the 
self-pay, sliding fee category which is dependent on grant funds. 
CHIP Readiness 
When the Medicaid program began implementing mandatory managed care, Cherry 
Street Health Services joined a health center-owned and directed managed care plan. 
This plan, Community Choice of Michigan (CCM), was formed through efforts initiated 
in 1995, when a group of health centers obtained a HRSA  Integrated Service Network 
Initiative grant. With the Medicaid program moving towards managed care, these 
health centers decided that creating their own health plan would best serve their 
patients interests. To assure involvement in plan decisions, particularly those regarding 
adequate reimbursement and maintenance of clinic enabling services, health centers 
invested $22,000 each and obtained a seat on the Board of Directors. Since Michigan 
phased-in its managed care program by counties, Cherry Street was not initially in 
CCM when the plan became operational in 1996. However, they joined the plan as 
Medicaid managed care was implemented in the Grand Rapids area. 
With the advent of Medicaid managed care, the health centers and CCM needed to 
address the issue of how cost-based reimbursement was going to be handled by the 
State. Initially, the Medicaid program thought managed care plans would place 
capitation bids which incorporated the higher reimbursement for the health centers, 
and then reflect this in the fees paid to the centers.  However, the plans did not 
include  these  higher  fees  in  their  bids,  and  health  centers  feared  this  created 
disincentives for plans to work with them. The health centers, then, as a group, 
negotiated a memorandum of agreement with the Medicaid Program whereby the 
managed care plans would reimburse health centers at market rates, and the Medicaid 
program would supplement these payments38.  The supplemental payments were 
based upon the 1996 cost reports, with an inflation factor of 15 percent for 1998 and 
1999.  The agreement also allowed health centers to be paid for service expansions 
planned prior to the 1997 date of the agreement. Also, health centers could assume 
risk in their managed care contracts. Thus, they could realize gains from savings, and 
lose revenue for excess costs. 
However,  the  HCFA  informed  the  Medicaid  program  that  this  reimbursement 
methodology was not acceptable under the Balanced Budget Act of 1997 (BBA), and 
they would need to return to cost-based settlements. Returning strictly to cost 
Federally Funded Health Centers and CHIP  31  OEI-06-98-00320  settlements would negate any gains or losses from accepting risk.  Additionally, under 
cost settlements, Cherry Street Health Services would not receive  payments for their 
expansions already made. The health centers, their PCA and Michigan Medicaid have 
protested HCFAs ruling, and a final determination on this issue was pending at the 
time of our visit. The outcome of this reimbursement  issue was expected to have 
significant impact on the health centers ability to adjust to managed care risk 
assumption, once cost-based reimbursement is phased out as required by the BBA, 
because they would have no Medicaid experience with capitated reimbursement. 
Cherry Street also anticipates a need to retreat from service expansions already 
underway if the Memorandum of Agreement is ultimately nullified by HCFA. 
Cherry Street and CCM noted several adjustments being made by health centers to 
facilitate their viability in a managed care environment. The director of Cherry Street 
stated that, as their participation in managed care evolved, they had become more 
thirsty for Medicaid encounter data.  CCM provides them with their financial reports 
with costs, broken out by services and providers, as well as considerable education 
during their board meetings on how to use this information. CCM indicated that two 
of the most financially successful health centers in their plan had each hired a staff 
person with managed care experience to monitor financial aspects of managed care 
contracts.  Cherry Street had designated one staff member as a managed care 
coordinator who was being educated to oversee this component of the centers 
operation. The center also was considering adding a referral coordinator, if resources 
allowed. 
Another significant area of needed adjustment was in management information. 
Although Cherry Street had not yet invested in new hardware or software, the director 
indicated he was assessing their technical needs in this area.  The PCA noted that 14 
of their  health centers now contract with a common software company and that this 
vendor had recently dedicated a staff person to support the Michigan health centers. 
The Medicaid staff we interviewed reiterated that good information systems and 
business managers were critical to health center viability in the new managed care 
environment. 
Key Factors for Success 
Cherry Street Health Services has made a concerted effort to enroll children in 
Medicaid expansions and MIChild.  Although the director indicated that they would like 
to do even more outreach if resources were available, this health center has clearly 
made CHIP/Medicaid outreach a priority.  They demonstrated this by dedicating staff 
to this effort, informing their providers about the program,  involving them in referring 
families to the outreach coordinator for application assistance, and by conducting a 
major mail outreach to their self-pay families with children. The health center is also 
making an effort to track the processing and outcome of these applications to ensure 
that applications needing follow-up dont fall between the cracks. Due to welfare 
reform, their loss of patients previously covered by Medicaid is presenting financial 
challenges for the health center.  This reinforces their need to enroll  many of these 
children who then become eligible for Medicaid expansions or MIChild coverage.  The 
Federally Funded Health Centers and CHIP  32  OEI-06-98-00320  school health program operated by the health center reaches over 16 schools and 
provides an opportunity to achieve this goal.  The State programs have shown intent 
to partner with the health centers in this effort by issuing a request for proposals for 
outreach contracts with them. 
Cherry Street has also partnered with several other health centers in the State in joint 
ownership and development of a managed care plan.  This has required considerable 
effort to learn the business of managed care, as well as a willingness to accept 
financial risk for primary care patients.  They have designated a staff member as a 
managed care coordinator and indicated desire to add a referral coordinator as well. 
As part of their managed care strategy for Medicaid, these centers negotiated an 
agreement for a modified version of cost-based reimbursement with the State, which 
incorporates some risk assumption, to facilitate the transition from cost-based to 
capitated reimbursement for services, although the agreement has not yet been signed. 
Several people we interviewed said that making the transition to capitation would be 
a major challenge if they were not allowed this intermediate step. 
Federally Funded Health Centers and CHIP  33  OEI-06-98-00320  PLAN DE SALUD DEL VALLE 
Fort Lupton,Colorado 
State Model: Opted for a freestanding CHIP program only, in keeping with preference for privatization. 
Center Highlights: 
<  Developed managed care experience prior to CHIP, through formation of an MCO, with 8 other 
centers and a safety-net hospital; 
<  State hopes investment in the design/implementation of an on-line enrollment/eligibility determination 
system will compensate for the initial lack of direct funding for center outreach; 
<  Capacity issues may arise since State funding levels will only cover half of the children estimated to 
be CHIP eligible; 
Challenge: Existence of a prior indigent care program, which also serves children and charges lower 
copayments and no premiums for many of the same services offered through CHIP. Families tend to stay 
in the old program until catastrophic illness requires CHIP benefits. A much lower reimbursement schedule 
for services under this older plan, adversely impacts center revenues. 
Colorado CHIP Model 
Early to recognize unmet healthcare needs of their citizens, Colorado had already 
instituted, prior to CHIP legislation, a State-only health insurance program. A specific 
childrens coverage program, named the Child Health Plan (CHP) was also formed.  The 
State was planning an expansion of this CHP program  prior to passage of CHIP. With 
design  teams far into the development phase of the program, the State made 
alterations to comply with CHIP requirements, thus allowing Colorado to submit a plan 
to HCFA quickly.  When we conducted our site visit in September 1998, the program 
had been operational for several months. 
As allowed under the Federal law, Colorado developed a freestanding program, called 
Child Health Plan Plus (CHP+), which is administered by the Office of Program 
Development. Operated by a separate office, the Medicaid program shares the same 
oversight agency as CHP+, the Colorado Department of Health Care Policy and 
Financing. Most interviewees describe Colorado as a fiscally conservative State, which 
operates under taxing and spending limits imposed by voters. They related the 
apprehension of legislators about expanding entitlements, preferring instead to design 
a program which closely mirrors private sector health insurance. Consistent with the 
States philosophy, the enabling legislation requires that many CHP+ functions be 
privatized. The oversight agency is required to issue contracts for outreach and 
eligibility enrollment. This does not preclude the use of contractors already doing 
similar work for Medicaid, but activities must be coordinated as a separate office. 
The Medicaid childrens program, titled Baby Care Kids Care, covers children in families 
with income up to 133 percent of the Federal poverty level (FPL) through age 5. For 
ages 6 through 15, the eligibility drops to 100 percent FPL.39 The separate CHP+ 
Federally Funded Health Centers and CHIP  34  OEI-06-98-00320  program covers children, up to age 18, in families with income up to 185 percent FPL 
who are not Medicaid eligible. Premium payments are waived for children with family 
incomes under 100 percent FPL, while those with families above 100 percent FPL are 
on a graduated premium schedule.40  Some income levels are also assessed co
payments for office visits. The omission of dental coverage and limits on mental health, 
and all therapies (physical, speech, vocational) distinguish it from Medicaids full 
benefit package. 
Health Center Background 
Plan de Salud del Valle health center in Fort Lupton, Colorado is a large center with 
nine  service  delivery  sites.  Salud  served  nearly  33,000  individuals  in  1997. 
Surprisingly, although over 60 percent of their clients are Hispanic, the center reports 
only 14 percent of its patients require bilingual services or language interpretation. 
Nearly half (46%) of the centers patient population are children and adolescents. The 
center has been an owner/provider within the Colorado Access health network, a non-
profit HMO providing a comprehensive medical plan for low-income individuals, since 
Colorado Access was formed in 1995. Salud health center provides a full range of 
preventative and primary care services as well as a wide array of enabling and 
specialty services. These will be discussed in greater depth later. 
Planning and Implementation 
During the design phase, Plan de Salud de Valle health center had both direct 
representation on planning committees, and was also represented by their PCA on all 
committees. Salud and its PCA had favored a Medicaid expansion from the beginning, 
but felt that the State political climate prevented that option from being fully explored. 
Although the PCA director felt that 50 percent of the resultant program was due to 
PCA involvement, the Salud center viewed its impact on the final CHP+ product as 
minimal. For example, although the centers dental director sat on the benefits 
committee, he was disappointed when dental care was not made a part of the CHP+ 
benefits package, except in emergencies. Currently, the State is exploring whether it 
can afford to add a dental benefit. 
Although they utilize their PCA for advocacy, Salud has also joined with other health 
centers, using non-federal dollars, to hire a representative for the PCA to present their 
interests before the State Legislature. Believing that representatives were unaware of 
the extent to which their constituents were served by health centers like Salud, they 
perceived  additional  representation  as  necessary  for  survival  in  the  current 
environment. 
Implementation of CHP+ has led to interface issues with the Colorado Indigent Care 
Program (CICP), since the onset of CHP+ did not mark the end of this pre-existing 
program. Covering both children and adults, the earlier CICP plan was intended to 
become more of an adult program as eligible children enrolled in CHP+. In the CHP+ 
program, beneficiaries are likely to be faced with higher premiums and co-payments 
than their co-payment for services under the CICP. For example, under CHP+, a family 
Federally Funded Health Centers and CHIP  35  OEI-06-98-00320  of four at the maximum eligibility (185% FPL) would pay $30 a month in premiums and 
a $5 co-payment per office visit.41 In contrast, under the CICP plan, they would only 
be responsible for co-payments. 
The health center predicts many families will elect the CICP for childrens services 
during periods of good health, and enroll in CHP+ only when significant health 
problems emerge. At that point, most serious illnesses are likely to be referred out, so 
that specialists will benefit from CHP+ reimbursements, not the health center. The 
financial impact of this scenario on a center like Salud could be great as CICP costs are 
largely assumed by the clinic.42 The double effect is to reduce the Federal funds the 
center would receive under CHP+, as well as the pool of funds available to their adult 
population under the CICP. Additionally, Salud fears that the State will try to reduce 
funds to the CICP, proportional to eligible CHP+ children, in order to fund some of its 
financial commitment to CHP+. The end result would be an overall reduction in total 
dollars spent on health care for the underserved in Colorado. There was no indication 
that the State planned any redesign of the child segment of CICP or CHP+ to prevent 
these conflicts. 
As CHP+ enrollment increases, capacity issues may arise since the program was not 
funded to the level which qualifies for the maximum Federal dollars available. The PCA 
estimates that approximately 50,000 of the children they serve will qualify for CHP+, 
while the State currently has appropriated money to cover only 25,000. If such 
numbers were to enroll, any additional children above the 25,000 threshold would have 
to be placed on a waiting list until space or additional funding became available. 
Outreach for CHIP 
Salud health center receives no money from the State for outreach activities. As a 
result, they have no formal outreach program, but do attempt to enroll children when 
they access services in their clinics. The center views the CHIP expenditure limit of 10 
percent for administration and outreach as inadequate for financing additional outreach 
activities. The State has allocated some resources to the development of brochures 
and literature promoting the program. In addition, Colorado heavily invested in an online 
eligibility/enrollment process which, at the time of our visit, was not yet operational. 
A pilot project of approximately 40 sites, not all health centers, was scheduled to 
come online shortly. Once operational, a site would receive a negotiated fee, from the 
contractor developing the system, for each Internet enrollment application completed. 
Realizing that getting every health center online may require some capital investment, 
Colorado has instituted the Essential Community Provider Grants program. The program 
will allocate grant funds to those essential providers in need of software, networking 
capability, infrastructure improvement, or direct services. 
While only a few health centers currently are permitted to determine eligibility and 
receive compensation for it, all centers assist clients in completing and submitting 
enrollment applications to the State. Although Colorado prefers enrollees to fill out the 
applications themselves without center assistance, Salud observed that the low 
literacy  level  of  many  applicants  prevents  them  from  completing  applications 
Federally Funded Health Centers and CHIP  36  OEI-06-98-00320  independently. The original State plan classified all health centers as high-level 
eligibility determination sites which would receive training and be paid for application 
assistance based on a fee schedule negotiated by the contracted vendor and the 
center. Unfortunately, continuous mistakes by one health center resulted in the State 
not designating all centers as eligibility determination sites. Rather, Colorado has issued 
a Request for Proposals under which centers may apply to become an eligibility site. 
If chosen, a center would receive training at only one site, regardless of how many 
service locations they may have. Salud health center is a member of the PCA along 
with 14 other health centers for a total of 85 sites. At the time of our interview, 
between 3 and 5 of those 85 sites (none from Salud) had been trained to do high-level 
eligibility determination and were the only sites receiving reimbursement for enrollment 
activities. The PCA viewed this limitation on eligibility determination and lack of 
compensation as a serious problem in need of correction.  Since our site visit, the PCA 
provided new information that they and the State program are conducting training 
sessions around the State to assist health centers in becoming CHP+ eligibility sites. 
Issues of eligibility determination are compounded by the lack of presumptive eligibility. 
Neither CHP+ nor the Medicaid program currently has this feature.  However, planners 
are currently trying to expand presumptive eligibility for the Medicaid plan which 
currently extends only to pregnant women. Both programs allow continuous eligibility 
for 12 months before requalification is necessary. 
With health centers as the most common point of contact with potential CHP+ or 
Medicaid enrollees, clinics can complete an application with the client for the program 
for which they appear to be eligible. Yet, unless the clinic is one of the few high level 
eligibility determination sites, they must wait for the State to determine eligibility. At 
the time of our visit, this process was taking between seven and eight weeks. 
Updated information indicates that the processing time has been reduced to about one 
week. In the meantime, confusion occurs over whether and how to bill for those 
services which the client uses. Since CHP+ and Medicaid reimbursements are 
different, and the CICP program is based solely on co-payments, whether or not to 
charge fees at the time of service, and where to bill services while the clients 
eligibility is being determined for a specific program become issues. 
Concern was also expressed regarding the impact of CHP+ on the children of migrant 
workers engaged in seasonal farmwork. While the Federal statute doesnt require a 
Social Security number from a CHIP applicant, Colorados addition of this requirement 
on the joint CHP+/ Medicaid application is viewed as a barrier to the enrollment of 
migrant children. Most parents can obtain the necessary documentation, but either 
they dont carry it with them, or they have little motivation to produce it. Even when 
an application is completed, the slow eligibility determination often insures that by the 
time they are approved, clients will most likely no longer reside within the State. 
Whether these families are aggressively seeking to enroll in CHP+ is unclear. However, 
in Saluds view, every eligible, but unenrolled, child they treat forces them to divert 
scarce resources away from other uninsured persons. 
Federally Funded Health Centers and CHIP  37  OEI-06-98-00320  Health Center Services for Children 
Primary/Preventive Services 
Salud health center provides a full range of primary and preventative care to the 
children they serve. Considering themselves primarily as a maternal and child health 
clinic, the center provides comprehensive care from pregnancy diagnosis through well-
child and ill-child care. Salud maintains the goal of providing a majority of their care to 
patients under the age of 21. Currently, with 53 percent of patients age 21 and under, 
they seem to be reaching their goal. The center is, however, also a full-service family 
clinic. Fearing compartmentalization of care, Salud employs just two pediatricians, and 
prefers that most of their physicians be family practitioners. Other primary and 
preventive services include Women, Infant and Children (WIC) nutrition services, full 
prenatal and delivery services, and family planning. Migrant worker clinics are also 
operated by the health center on a seasonal basis. 
Enabling and Specialty Services 
Salud is able to provide enabling and specialty services in addition to their primary care 
offerings. Although they lack funding for translation services, the center tries to hire 
bilingual staff, when possible, to better serve their majority Hispanic population. 
Colorado Access, the managed care network of which Salud is a part, also has 
providers who speak Russian and Vietnamese. Regular transportation is not provided 
by Saluds managed care organization, and they admit this is an issue, especially in 
rural areas. However, limited reimbursement forces them to offer transportation only 
on an emergency basis. Additional enabling services provided by the health center 
include eligibility assistance for public programs, case management, health education, 
and outreach. 
Plan de Salud de Valle continues to offer limited mental health care, as well as on-site 
dental services. An agreement with a  county behavioral health provider provides a 
psychologist  at  one  site.  Although  a  similar  agreement  in  another  county  was 
discontinued, the psychologist has decided to continue working on a pro bono basis. 
Thus, two sites are able to offer mental health services. Dental services are provided 
at the clinic sites and at schools, Head Start programs, and migrant centers. Children 
are given priority for dental appointments, since the need for these services at the 
health center exceeds current capacity. 
CHIP Readiness 
Having already participated in the formation of a managed care organization, Plan de 
Salud de Valle was well-positioned to deal with the implementation challenges of 
CHP+. Predicting that Colorado would move to Medicaid managed care, nine Federally 
qualified health centers, including Salud, joined to create the Colorado Community 
Managed Care Network (CCMCN). CCMCN then organized in conjunction with 3 
hospitals and a physicians group to form Colorado Access. A private, non-profit HMO, 
Colorado Access began operations in December 1995 with 17,000 enrollees on the 
Federally Funded Health Centers and CHIP  38  OEI-06-98-00320  first day. Their goals included retaining the Medicaid population, using any surpluses 
to serve the medically indigent, and ensuring that safety net providers remained viable. 
Since its formation, Colorado Access has spread from 12 to 28 counties within the 
State and continues to look for areas of expansion. Salud operates as a provider 
contracted to the Colorado Access HMO. 
Having taken a proactive approach to managed care early on, Salud did not find it 
necessary  to  make  significant  operational  changes  to  accommodate  the  CHP+ 
program. Determining their business infrastructure system to be adequate, the center 
only cites the need of an MIS manager to maximize their information capabilities. Since 
the new Community Health Center grant adds the MIS manager as part of the staff, 
Salud will be able to add this position. In addition, they are participating in a pilot 
project sponsored by the Federal government to test the Physician Service Practice 
Analysis software. Developed by a managed group medical association, it is a cost 
accounting software for health services which is heavily used in the private sector. The 
project is assessing its conversion for use in community health centers. 
With five other managed care organizations approved under the CHP+ plan, Colorado 
Access is not the sole managed care provider. However, their ability to garner 1,000 
of the 1,300 total CHP+ enrollees, at the time of our visit, attests to the effectiveness 
of the network they already had in place. A significant entity within Colorado Access, 
Salud estimates that between 400 and 500 of the networks CHP+ enrollees are 
patients of its own clinic system, while they speculate that several thousand more are 
eligible. The center expressed concern regarding the possibility that with more provider 
networks available, enrollees might seek out private physicians due to perceptions that 
private care is better, and if their insurance status changes, return to Salud. The net 
effect is a rise in the number of uninsured patients at the centers. Under such 
circumstances, the center will lose capitated funds for patients while they are insured, 
yet become liable for the cost of treating them when, and if, their coverage status 
changes. Although this has not occurred on a widespread basis, Salud has observed 
this shift in one county where it has provider sites. 
Under CHP+ managed care, Plan de Salud de Valle health center has not experienced 
the  reimbursement  problems  it  did  under  the  old  Child  Health  Plan  (CHP). 
Reimbursement was provided on a capitated basis, with some services carved out 
on a fee-for-service schedule. Due to delayed eligibility determinations and a slow 
payment system, the center would often go three to four months without receiving 
checks from CHP. The CHP+ plan is also capitated, but with the managed care 
organization rather than the center. Each managed care organization then, contracts 
with their providers independently. In the case of Salud, Colorado Access is giving 
them the same cost-based, fee-for-service they would receive under Medicaid. In 
addition, as an incentive to keep costs low, Colorado Access receives a designated 
premium from the State with the agreement that funds left over will be equally divided 
between themselves and Salud. 
The  choice  to  operate  a  freestanding  commercial  program  has  presented  an 
unexpected issue in regard to vaccines. Health centers receive highly reduced prices 
Federally Funded Health Centers and CHIP  39  OEI-06-98-00320  for vaccines from pharmaceutical companies for Medicaid and the uninsured, but 
cannot use those under the freestanding CHIP program per Federal regulation. The 
States original capitation rate did not include these vaccines, so now they are trying 
to incorporate them into a new capitation rate. In the meantime, health centers are 
unclear about the reimbursement of cost for vaccines under CHP+. 43 
Key Factors for Success 
Plan de Salud de Valles previous affiliations with managed care appear to have been 
of great benefit as they made the transition to CHP+. Having already worked with 
other member providers for years, the CHP+ program was more like an add-on than 
a new enterprise, which allowed their managed care network, Colorado Access, to sign 
up more CHP+ members than the other five networks combined. Salud has been 
particularly successful, since nearly a third (between 400 and 500) of the initial CHP+ 
enrollees Statewide reside within the Salud clinic system. With its emphasis on safety 
net viability, Colorado Access continues to work to insure its market share, and look 
for areas in which to expand. 
Prior to CHP+, the health center had proactively upgraded its business infrastructure. 
Approval of a MIS director position will further enhance their capability to manage the 
complex information needs associated with managed care. The progress they have 
made in this area is evidenced by their participation in the test pilot for service analysis 
software being sponsored by HRSA. 
The simultaneous operation of the CICP program along with CHP+ remains a challenge 
for Salud and its financial future. They predict the  CHP+ premiums and co-payments 
to be significant barriers to new members who have been accessing services under the 
co-payment only CICP plan. Like other insurance programs, the success of Colorado 
Access under CHP+ depends upon a sizeable pool of members paying premiums over 
time so that adequate funds will exist to cover care costs. If Saluds clients opt to 
utilize the CICP for general care, the center will be responsible internally for the 
majority  of  costs  incurred  under  the  CICP  plan  and  forgo  potential  CHP+ 
reimbursements for the same care. Yet, even if the centers are able to overcome the 
resistance of clients to convert to the CHP+ plan, the current financing limits to 
25,000 CHP+ enrollees, set by State appropriations levels, are likely to present a new 
barrier to success. 
Federally Funded Health Centers and CHIP  40  OEI-06-98-00320  F A M I L Y  H E A L T H  C E N T E R S  
Orangeburg, South Carolina 
State Model: Medicaid expansion with a voluntary managed care element. Providers may participate in an 
HMO or one of two managed care alternatives tailored for the States rural areas. 
Center Highlights: 
<  Enrollment barriers avoided with a one-page, mail-in application, and adherence to a maximum 5-day 
processing period; 
<  Established and funded, with other centers, a Managed care corporate structure, should managed 
care become mandatory; 
<  Effective mode of outreach through expansion of school-based health programs; 
Challenge: Previous periods of capped reimbursement rates resulted in significant funding reductions to the 
center. While temporary, these periods raised concern over the approaching permanent phase-out of cost-
based reimbursement. 
South Carolina CHIP Model 
Prior to the Federal enactment of the CHIP legislation, the Governor of South Carolina, 
in February 1997, announced an initiative called Partners for Healthy Children, which 
aspired to provide health insurance to 50,000 additional children.  With support from 
the legislature and private businesses, planning for a Medicaid expansion for children 
occurred  as  Congress  deliberated  the  Federal  legislation.  The  South  Carolina 
Childrens  Hospital  Collaborative  provided  $3  million  in  matching  funds  for  the 
expansion which, together with an appropriation by the General Assembly, allowed 
South Carolina to start accepting applications under the expanded eligibility rules on 
August 1, 1997.  Because of its early start, South Carolina became the second State 
to have a CHIP plan approved, with Colorado being approved earlier on the same day.44 
With the enhanced Federal matching rate provided by CHIP, the estimated number of 
newly eligible children expanded to 75,000.  We conducted our site visit to South 
Carolina in September 1998 when their CHIP Medicaid expansion had been in operation 
several months. 
South Carolina selected  a Medicaid expansion model only for children whose family 
income is up to 150 percent of the Federal poverty level (FPL).  These children receive 
all  standard Medicaid benefits including Early Periodic Screening, Diagnosis and 
Treatment (EPSDT). Instead of instituting mandatory managed care, the State Medicaid 
program, in addition to its health maintenance organization option, developed two more 
voluntary managed care options tailored to the rural nature of the State.  The first of 
these,  called  Physicians  Enhanced  Program  (PEP),  is  a  primary  care  capitation 
arrangement whereby physicians and health centers can contract for a bundle of 
primary care services, paid  for by a monthly capitated fee.  In this option, the primary 
care provider serves as a primary care case manager and must arrange referral services 
Federally Funded Health Centers and CHIP  41  OEI-06-98-00320  for  patients. The other option, called Healthy Options Program (HOP), is a model 
where the primary care provider agrees to serve as a medical home for the patient. 
For an enhanced office visit payment rate, the provider is available on-call to his/her 
patients and coordinates their care.  However, this model does not include capitation 
or  mandatory  referrals  for  specialty  care45.  South  Carolina  has  implemented 
continuous eligibility for 12 months, which should assist the process of establishing 
medical homes for children46. 
Health Center Background 
Family Health Centers in Orangeburg,  a large center located in a rural area of the 
State, served about 36,000 patients in 1997.  The health center consists of one main 
clinic, six satellite offices, and school-based clinics which operate at four locations. 
The health center director noted that expansion of their school-based program has been 
a priority in recent years.  Due to this emphasis on school-based health care, over 43 
percent of the centers patients are children and adolescents. This is the highest 
percentage of children served among all the Federal health centers in South Carolina. 
Overall, the health center population is 82 percent African-American.47  The main clinic 
provides a comprehensive range of preventive and primary care, as well as pharmacy 
and dental services.  Additionally, for three months during the peak harvest season, the 
health center conducts outreach to migrant workers and provides services through use 
of a mobile clinic owned by the Medical University of South Carolina. 
Planning and Implementation 
Family Health Centers and the South Carolina Primary Care Association (PCA) reported 
some minor involvement in the planning and implementation of the Medicaid expansion 
for  children.  Legislative hearings were held in locations across the State, and 
testimony was provided by health centers in support of the expansion.  The health 
centers were in agreement with the decision to implement CHIP by expanding the 
Medicaid  program,  since  this  provided  the  fastest  and  administratively  easiest 
approach.  The PCA member health centers considered pushing to expand income 
eligibility to 200 percent of the FPL. However, when the health centers examined their 
patient demographics, only small numbers of children came from families in the 150 
percent to 200 percent income range. Therefore, the Association did not press this 
issue.  PCA staff indicated that implementation of the expansions had proceeded fairly 
smoothly with no major issues emerging. 
Outreach for CHIP 
South Carolina has enrolled over 50,000 of the projected 75,000 children newly 
eligible for Medicaid in the first year.48  This exceeded the States initial goal of 37,500 
for the first year of the program. To facilitate enrollment, the Medicaid program 
developed  a  one-page  (two-sided)  mail-in  application  form.  Rather  than  using 
presumptive eligibility, they committed to processing eligibility applications within  five 
days of receipt.  Health centers have been a part of the State outreach effort. 
Federally Funded Health Centers and CHIP  42  OEI-06-98-00320  Family Health Centers is serving as a site for an outreach demonstration project with 
the Medicaid program for targeted outreach activities. The center provided a list of all 
their uninsured children to the Medicaid office. Letters notifying the family of the 
expansions, with a mail-in application enclosed, were then sent by the Medicaid 
program. Of over 2,000 applications mailed only about 130 were returned.  The health 
center director felt that a letter directly from the health center might have been more 
effective because of its relationship with the families and their ability to assist families 
in completing the applications.  Beyond this project, Family Health Centers has an 
outstationed Medicaid intake worker at their main clinic to assist fee-for-service 
families with newly eligible children in completing applications for the Medicaid 
program.  The centers community health workers at the school-based clinics are also 
engaged in outreach activities. 
Schools were also the focus of Statewide outreach efforts.  When the expansions 
were implemented in August 1997, the Medicaid program sent applications to all 
districts at the beginning of that school year.  The number of submitted applications 
tripled to over 300 per week shortly after this mail-out.  In addition to the health 
centers  and  schools,  the  State  distributed  applications  to  physicians  offices, 
pharmacies, hospitals and child care centers throughout the State.  Partnerships were 
also formed with the Baptist Convention, the African Methodist Episcopal Church and 
numerous other community groups to distribute applications through their networks. 
Even with the efforts described above, health center and PCA staff felt more outreach 
was necessary. The health center director felt without supplemental resources, centers 
should view these activities as short term investments with long-term payoffs. In 
particular, she emphasized the value of working with schools, since the health centers 
have established relationships there.  The PCA director emphasized that families trust 
for their health providers is a significant factor in successful outreach, making health 
centers ideal focal points. She noted that the rural culture of South Carolina is more 
responsive to information provided by local people and organizations than Statewide 
initiatives. The ability of health centers to discuss the program with families and assist 
them with applications is critical in her view. 
However, resources for health center outreach activities are limited.  No grants or 
application assistance payments are available.  The PCA director stated that she would 
like to be able to assign staff to the health centers for two to three month periods. 
There they could devote full-time to explaining the program to childrens families or 
assisting them with applications while awaiting clinic appointments.  This staff person 
could also call families and schedule appointments solely for outreach and enrollment 
purposes. 
Children in migrant and seasonal farm worker families were identified as needing 
intensified outreach activities.  Because of South Carolinas agricultural  economy in 
rural areas, we also interviewed the coordinator of the State Migrant Health Program. 
The migrant worker population is very mobile, and follow-up regarding applications can 
be difficult.  Currently, South Carolina does not have arrangements for portability or 
transferability49 of eligibility with surrounding States, and the migrant health staff we 
Federally Funded Health Centers and CHIP  43  OEI-06-98-00320  met with would like to see this issue addressed. 
Some outreach regarding the Medicaid eligibility expansion has started in Migrant Head 
Start programs, and respondents felt that these activities should be increased.  Family 
Health  Centers  and  Carolina  Health  Centers,50  whose  director  we  interviewed 
separately by telephone, were working with the Migrant Head Start programs on such 
efforts. Services to this population are often delivered by mobile clinic vans or in 
temporary clinics located at the migrant camps.  Families in this population are now 
settling in the State to work in poultry processing plants, and more of their children are 
coming to the main clinic sites.  There, language barriers need to be addressed, along 
with establishment of trust, since many citizen children have parents who may not be 
documented. 
Health Center Services for Children 
Primary/Preventive Services 
Family Health Centers offers children a comprehensive range of primary and preventive 
services.  The services provided include prenatal care and delivery, immunizations, 
well-child care and primary care for illnesses.  With a full pharmacy, the health center 
also participates in a pharmaceutical companys cost-sharing program to assist low 
income, uninsured patients in receiving needed treatments. 
The health center has made a concerted effort in recent years to develop and expand 
its program of school-based clinics. It currently has four school clinics, staffed by nurse 
practitioners, and two additional schools have requested clinic services.  The school 
clinics were implemented through Rural Demonstration Project funding through fiscal 
year 2000.  The health center director is exploring sources of seed money to expand 
to these additional schools. Community health workers are also located at these 
school-based clinics to provide health education and outreach services. 
Enabling and Specialty Services 
Enabling services of case management, transportation and translation are also available 
to children served by the health center. Case management was emphasized as an 
important element in providing care.  In particular, scheduling and follow-up on missed 
appointments for preventive care was felt to be significant.  Although the Medicaid 
program had previously reimbursed the health centers directly for case management 
services, these functions are now provided under contract with the Health Department. 
However, the need for case management of services other than immunizations and 
well-child visits sites remains.  Located in a very rural area, many of the health centers 
patients have a significant need for transportation. Most specialty care for Medicaid 
and uninsured patients is provided by the University of South Carolina, located in 
Columbia, almost an hours drive away. However, only limited transportation is 
provided by the center.  Of particular concern for pregnant women is the ambulance 
service based out of Columbia.  In cases of pre-term labor, the hour long wait for an 
ambulance to transfer them to the University hospital represents a significant delay in 
Federally Funded Health Centers and CHIP  44  OEI-06-98-00320  receiving needed specialty care.  Although the majority of the health centers patients 
are African American, bi-lingual staff and translation services are important to the 
provision of seasonal care to migrant worker families. Two physicians and one nurse 
speak Spanish.  For translation needs in other families, and further outreach to the 
migrant population, the health center has an arrangement with South Carolina State 
University to provide additional translation services. 
Health education is another key component of Family Health Centers program.  For 
children, much of this is provided at the school-based clinic sites.  The medical director 
indicated a desire to include substance abuse prevention education in their middle 
school sites. For young children, the health center staff is developing a parents 
education book on basic baby care and child health needs.  Family Health Centers is 
one of several Federal health centers participating in a diabetes management, quality 
improvement project recently initiated by the Bureau of Primary Health Care.  Children 
and adults with diabetes will be part of this initiative. 
The health center also provides a full dental program comprised of two dentists and 
four dental assistants.  As we found in other health centers visited, the need for dental 
care by the centers population strains their current capacity.  Consequently, priority 
for dental appointments is given to children. 
CHIP Readiness 
Prior activities have prepared Family Health Centers for implementation of Medicaid 
managed care in South Carolina. The previous governor had submitted an 1115 Waiver 
to implement Medicaid managed care.  As the waiver application was being developed, 
Family Health Centers, in conjunction with other Federally funded health centers in 
South Carolina and the PCA, obtained an Integrated Services Network grant from the 
Bureau of Primary Health Care to develop a managed care strategy.  A for-profit 
corporation, Community Network, Inc., was formed with the director of Family Health 
Centers as president.  Each health center made an investment of $25,000 and 
negotiations were conducted to partner with an existing managed care company in 
order to obtain additional capital and administrative expertise. When the waiver 
application was put on hold under a new State administration, Community Network 
decided not to enter into any Medicaid managed care contracts at that time. The 
corporate structure remains in place and provides the mechanism for the health centers 
to enter the managed care environment should Medicaid managed care expand beyond 
its currently limited voluntary program. 
Instead of instituting mandatory managed care, the State Medicaid program, in addition 
to its health maintenance organization option, developed two more voluntary managed 
care options tailored to the rural nature of the State. These programs, the  Physicians 
Enhanced Program (PEP) and the Healthy Options Program (HOP) are types of primary 
care case management, as described in the State CHIP Model section.  Family Health 
Centers is one of three Federal centers in South Carolina which, together with the 
PCA, is developing a demonstration project to experiment with PEP contracts in the 
Medicaid program.  The Medicaid program and these health centers were, at the time 
Federally Funded Health Centers and CHIP  45  OEI-06-98-00320  of  our  visit,  negotiating  the  details  of  which  health  center  services,  such  as 
transportation, outreach and social services, should be excluded from the capitation 
payment and billed separately to Medicaid. 
Family  Health  Centers  and  the  PCA  have  made  some  business  infra-structure 
enhancements, and would like to implement others, to adjust to these managed care 
options. They have automated their patient accounting function, including encounter 
data, accounts payable, Medicaid and Medicare billing, general ledger and pharmacy. 
Although they are not yet billing Medicaid on-line, the electronic claims are downloaded 
onto  diskettes  and  sent  to  the  carriers.  The  financial  officer  noted  further 
enhancements being considered are converting from a UNIX system to a PC system, 
and adding an in-house MIS manager, a financial management staff person, another 
billing staff person, and a medical coder. 
The South Carolina PCA is also assisting the health centers in adjusting to the new 
health care environment through infra-structure assessments.  They have arranged for 
a business consultant to assess each health center by looking for ways to decrease 
costs and enhance staff productivity.  Each health center will be provided with a report 
of its assessment.  The director of Carolina Health Centers whom we  interviewed, 
also emphasized the importance of centers becoming more business-minded.  He 
stated that more technical assistance to health centers on business operations is 
needed, and suggested that HRSA contract with private trainers specializing in medical 
practice and financial management. 
Although the health centers in South Carolina are currently receiving cost-based 
reimbursement, some issues were identified.  During the 1990's, South Carolina has 
had two periods in which all Medicaid reimbursements, including those to health 
centers, were capped.  Although the cap has recently been lifted, the Director of 
Family Health Centers noted that the center had lost about $14 per patient visit when 
the cap was in place.  This caused the health center to enter a financial recovery plan 
to reduce costs when the cap was in effect.  Dental reimbursements, at $38 per visit, 
were stated to be too low to cover the cost of providing these services.  Currently, 
dental costs can be captured in the cost settlements.  However, as cost-based 
reimbursement  is  phased  out  according  to  Federal  requirements,  further  cost 
efficiencies will be needed. 
Key Factors for Success 
Family Health Centers is actively pursuing strategies to adjust to the Medicaid 
childrens expansion and the changing health care environment in South Carolina. 
They have made services to children a priority for the health center in recent years 
through expanding their school-based clinic program and looking forward to expansion 
in additional schools.  Their dental program makes appointments for children a priority. 
Health education and outreach activities to children are also part of this strategy. 
Although mandatory Medicaid managed care has not yet come to this State, a 
corporate structure has been created to enable the health centers to enter such 
contracts in the future.  Family Health Centers has been in the forefront of this effort. 
Federally Funded Health Centers and CHIP  46  OEI-06-98-00320  This health center is also working with the PCA and the Medicaid program to launch 
a demonstration project involving health centers  in the partially capitated  Physician 
Enhanced Program for primary care 
Although most interviewees in South Carolina stated a need for increased outreach 
activities, the State has been one of the more successful in enrolling newly eligible 
children.  By enrolling over 50,000 children in the first year of the expansion, South 
Carolina exceeded its program goal. Most respondents felt this success was due to 
simplified application processes, reaching children through the schools, and in-person 
contacts when families seek care for their children.  Family Health Centers has 
engaged in these activities, as well as contacting fee-for-service families among their 
clientele to provide information about the expansions, encourage enrollment, and offer 
assistance with applications. However, the director felt that more activities, particularly 
in-person contacts, are needed. 
Two challenges to the success of the South Carolina childrens Medicaid expansions 
remain.  One of them is to enroll children in migrant farm worker families and provide 
for their health care needs.  Pursuing portability or transferability of eligibility was 
noted as one option to address this problem, but this policy change has not yet been 
developed. Additional bi-lingual outreach workers would also enhance the efforts to 
enroll this population. Family Health Centers has an opportunity to provide such 
outreach during the months when they operate the mobile clinic in migrant camps. 
Another challenge identified is to make the adjustments required by the phase-out of 
cost-based  reimbursement  for  health  center  services,  especially  considering  the 
enabling services the health center provides. Family Health Centers encountered 
serious financial difficulties when the Medicaid cap was in place in South Carolina and 
is quite concerned about this transition. The PCA and health centers are now studying 
ways to improve their cost efficiency in preparation for the revenue reductions which 
will result from this change. 
Federally Funded Health Centers and CHIP  47  OEI-06-98-00320  H E A L T H  C E N T E R S  O F  N O R T H E R N  N . M .  
Espanola, New Mexico 
State Model: Medicaid expansion only which closely followed an earlier State-initiated expansion, except 
for a cost-sharing element for families with higher incomes. 
Center Highlights: 
<  Center development through the merger of small, independent clinics resulted in its continued 
existence and viability; 
<  Provides specialty services targeting client needs, such as their Diabetes Control Program and an 
asthma clinic; 
<  Demonstrates effective managed care in a rural setting; 
Challenge: Reimbursement issues remain, since center provides specialty services not included in current 
health plan contracts. Additionally, low and selective dental reimbursement rates are causing the center to 
consider discontinuing dental services altogether. 
New Mexico CHIP Model 
New Mexico had already experienced Medicaid expansion in a managed care setting 
when it came time to implement CHIP. In 1995, the State began expanding Medicaid 
eligibility for children in families with incomes up to 185 percent of the Federal poverty 
level (FPL), resulting in over 38,000 additional Medicaid children.51 Somewhat later, 
but still before CHIP, the State legislature decided that Medicaid in New Mexico would 
convert to a Statewide, managed care model. For a predominantly rural State, this was 
an ambitious plan. All Medicaid recipients are now under managed care except for 
Medicare-Medicaid eligibles and people in institutional care. 
As part of the Medicaid transition to managed care prior to CHIP, three managed care 
organizations succeeded in winning contracts with the Human Services Department. 
They are Presbyterian Salud, Lovelace Salud, and Cimmaron Salud, all Statewide 
organizations. Presbyterian and Lovelace are both Federally qualified health plans, while 
Cimmaron is not.52 Operating under the optional Medicaid expansions passed by the 
State, these organizations are poised to implement the additional expansion outlined 
in the States CHIP plan. 
At the time of our visit, in September 1998, the States CHIP proposal had been 
submitted to HCFA, but was still awaiting approval. Later, the plan was approved, 
basically as submitted, on January 11, 1999.53 Classified only as a Medicaid expansion 
State under CHIP, New Mexicos approach is more creative than a standard expansion. 
The State proposed additional increases in Medicaid eligibility for families with incomes 
up to 235 percent FPL. Open to the Medicaid expansion concept, but uncomfortable 
with free entitlements to families above 185 percent FPL, the Governor and legislature 
compromised on a cost-sharing approach for families between 185 percent and 235 
Federally Funded Health Centers and CHIP  48  OEI-06-98-00320  percent FPL. Under the proposal, each family pays a premium of 15 dollars per month 
regardless of household size or income level.54 Co-payments are assessed at the time 
of service delivery. However, once maximum annual limits are reached, families cease 
to have a co-payment requirement. The New Mexico CHIP proposal includes the 
implementation of continuous eligibility for 12 months to insure continuity of care, 
regardless of changes in income. This change should also reduce current administrative 
challenges of verifying eligibility on a monthly basis. 
Additional provisions discourage eligible families with private insurance from dropping 
their childrens coverage and enrolling them in the new program. When the State 
expanded Medicaid eligibility to 185 percent FPL, it found that 16 percent of those 
enrolled had private health insurance at the time of enrollment. Of that group, 25 
percent later dropped their private coverage.55  Thus, the State has proposed that 
children will be ineligible for 12 months from the date on which creditable health 
coverage was dropped. Exceptions are allowed for situations beyond the insureds 
control. 
Health Center Background 
Health Centers of Northern New Mexico (HCNNM), a single health care entity with 
administrative offices in Espanola, is the result of the consolidation of various small, 
rural clinics. With the original Espanola clinic in operation since 1972, the other clinics 
merged with it in the 1980's and 1990's  to ensure their longevity and financial 
stability. Today, HCNNM operates under a volunteer Board of Directors, many of whom 
are directors from the previously independent clinics. 
The center currently consists of 13 primary care clinic sites, one of which is a 
university student health center, and one dental facility. Services are provided in 12 
different towns, over seven counties. Despite their number of service delivery sites, 
HCNNM is a medium-sized health center with approximately 16,000 registered patients 
in 1997. Except for Las Vegas and Espanola, HCNNM sites are the only providers of 
health services in the rural communities. Since the counties served include some of the 
highest State rates of unemployment and families living below the Federal poverty 
level, HCNNM is vital to them. HCNNM also operates school-based clinics in Espanola 
at the middle and high school levels. Seventy-five percent of clients are Hispanic, with 
the center reporting that overall 13 percent of clients require bilingual or translation 
services. Approximately 40 percent of patients who receive services are children. 
Planning and Implementation 
HCNNM respondents felt they definitely had  involvement in the CHIP planning process, 
but that it was almost exclusively through their Primary Care Association. Their PCA 
director sat on the State Medicaid advisory committee and advocated the health 
centers position in that forum. Yet, the process was not without controversy in the 
early design stages. A State officials interpretation of regulations concluded that the 
State was only required to include one Federally Qualified Health Center (FQHC), a 
term which includes Federally funded health centers, in the managed care plan for the 
Federally Funded Health Centers and CHIP  49  OEI-06-98-00320  whole State.56  Fearing that the health centers would have little influence in changing 
this direction, the PCA involved HCFA in the plan development process. Beyond center 
advocacy,  networking through the PCA has also proved useful in the development of 
additional means for centers to compete in the managed care environment. HCNNM 
is involved, through a spin-off of the PCA, in the New Mexico Integrated Services 
Network. This entity was established among the FQHCs to function as the contracting 
entity with the health plans on behalf of the clinics. 
The end result of these involvements was a State requirement that each managed care 
contract with at least one FQHC within each service area. This was specifically defined 
as at least one FQHC per county. As a result, about three-quarters of New Mexicos 
health  centers  would  be  covered  under  this  agreement,  but  the  rest  could  be 
considered duplicates within a county and subject to non-inclusion. However, due to 
the large geographic size of the counties and the States rural nature, respondents felt 
that more than one health center in some of these areas was needed to provide 
effective healthcare coverage. 
Overall, the HCNNM executive director indicated that the health centers developed 
many program suggestions by benchmarking with other States and were able to 
channel  those  recommendations  into  the  CHIP  planning  process  via  their  PCA. 
Examples of their proposals to the State included parameters of reasonable geographic 
and financial access and a specific model for cost-based reimbursement.57 
Outreach for CHIP 
New Mexico had undertaken a comprehensive outreach campaign following the 
implementation of Medicaid managed care. These actions are not considered CHIP 
outreach, since they involved the promotion of New Mexicos Medicaid expansion prior 
to CHIP. However, because the States CHIP plan proposes to build on earlier Medicaid 
expansions, these outreach activities can be indicative of the States capabilities to 
market a new program to their population. A 24-hour phone bank was set up by the 
State to field calls and questions from the public regarding the Medicaid switch to 
managed care. Media campaigns were developed for TV, radio, and billboards to reach 
eligible populations. Six Statewide advocacy groups were also contracted to conduct 
outreach efforts to special needs populations, such as the mentally ill, American 
Indians, and those with HIV/AIDS. Each organization was paid between $15,000 and 
$20,000 to hold enrollment fairs Statewide. Since the State was continuing to mail out 
new paper Medicaid identification cards each month, informational mass mailings 
about Medicaid managed care were included with little additional effort. The Medicaid 
agency acknowledged that monthly identification cards are an out-dated method, 
which they hope to transition out of under CHIP. However, it did provide a regular 
communication link during the implementation of these new managed care programs. 
Federally Funded Health Centers and CHIP  50  OEI-06-98-00320  HCNNM views the lack of both eligibility workers and compensation for enrollment 
activities as a hindrance to the enrollment of all eligible children into Medicaid managed 
care. For a time, the State only utilized about 20 out-stationed eligibility workers in 
hospitals. The PCA contends that placing workers in clinics is more effective for 
enrolling children than placing them in hospitals, since hospitals typically only see those 
who are very sick.  However, at the time of our site visit, there were no eligibility 
workers, since the hospital workers had been withdrawn due to a breakdown in 
contract re-negotiations.58 Rather than replace these individuals, the State hoped that 
the institution of presumptive eligibility, along with an aggressive training/certification 
program, would allow all the significant partners a role in the outreach/enrollment 
process. At the time of our visit, 600 individuals, against a goal of 2,000, had already 
been  trained in the outreach and enrollment process for placement in schools, 
hospitals, and community centers. 
The clinic director felt that HCNNM was effective in its ability to enroll the eligible 
children of undocumented families in managed care plans. Typically, these families first 
enter the system through provision of prenatal care or delivery services, and the health 
center  is  usually  able  to  retain  the  child  in  the  Medicaid  program  thereafter. 
Acknowledging parents  fears, due to their status and the INS, the States policy of 
not asking for Social Security numbers from parents aids them in placing the children 
into the Medicaid program. 
HCNNM would like to play a significant role in outreach under the current Medicaid 
expansion, as well as CHIP, but is unsure if it will have the resources to do so. 
Currently, unable to add social workers to every clinic site,  they are trying to target 
enrollment through their school-based clinics. The fact that school-based clinics only 
exist in Espanola at this time underscores the obvious limitations to this approach. Yet, 
the social workers who are on staff do serve other clinic sites on a rotating basis. 
Since every clinic is not always staffed with a social worker, the director admits that 
some hit and miss of contacting potential enrollees must be occurring. However, he 
thought that the bulk of eligible children who visited their clinics were being signed up. 
Clinic staff also noted that simplifying and shortening the application materials and 
form would improve the process. 
Health Center Services for Children 
Primary/Preventive Services 
HCNNM provides a full range of primary and preventative care to their children. 
HCNNM emphasizes family-oriented, comprehensive medical and dental health care 
with a focus on disease prevention and health promotion.59 Services include well-
baby/well-child care, immunizations, prenatal and OB/GYN care. The center is staffed 
with family practice physicians, physician assistants, family nurse practitioners, nurses, 
health educators, clinical social workers, dentists, dental hygienists, and dental 
assistants.  Other  primary  and  preventive  services  include  nutrition  counseling, 
communicable disease prevention, family planning, diet and weight management, and 
smoking cessation. 
Federally Funded Health Centers and CHIP  51  OEI-06-98-00320  The health center operates school-based clinics at both the middle and high school in 
Espanola, and provides support for EPSDT screenings and immunizations for the 
elementary schools. These clinic sites operate with no Federal funding and rely instead 
upon the ability to bill some services to the State-supported Healthier Kids Fund. 
Clerical and administrative functions are funded by a small grant from the Department 
Of Health. Additional costs are covered by the HCNNM clinic system. 
HCNNM has a strong commitment to maintaining in-school delivery sites, despite the 
challenges of incorporating them into managed care. In general, health plans do not 
contract with the school-based clinics, although children do have the option of naming 
a school-based clinic as their primary care provider. Refusing to adopt a policy of only 
seeing select children in its school clinics, the center uses their Federal grant funds to 
subsidize costs incurred while treating children who do not select the school site as 
their primary care provider. HCNNM is trying to negotiate a role for the school-based 
clinics in the current managed care plans. One option is to allow reimbursement for 
services administered in the schools. These services could be limited to a list of the 
most frequently used CPT codes mutually identified by the center and health plan.60 
Enabling and Specialty Services 
HCNNM offers some enabling services in addition to their primary care offerings. 
Formal translation services are not provided per se, but a good share of the clinical 
staff, including nurses and front office personnel, are bilingual. With such a large, rural 
area to cover, transportation barriers are a constant challenge. The health center is 
able to offer transportation services through the managed care organizations, who 
contract with independent providers of travel services. In cases requiring extensive 
travel, food and travel benefits may also be covered. 
The center has shown a commitment to providing selective, but needed, specialty 
services for its patients. For example, their Diabetes Control Program has become an 
integral part of the HCNNM services. The center director contends that diabetes is the 
major medical problem, other than drugs and alcohol, among the Hispanic population. 
In addition, theyre seeing Type II diabetes at increasingly younger ages. With two 
certified diabetic educators on staff, the program utilizes lay health advisors, who are 
diabetics themselves, to educate and train patients about life-style changes important 
to controlling the disease. Other innovative programs include the development of an 
asthma clinic for children. Although the center currently subsidizes the programs, 
which are not reimbursed under managed care, they are working with plans to include 
them as billable services. With adequate funding, they feel that these programs could 
be expanded. Yet, since managed care plans are often slow to recognize the benefits 
of services which fall outside of standard practice, HCNNM must try to sell the idea 
that such enterprises actually contain or reduce costs and improve the health status 
of susceptible clients. 
Preventive and restorative dentistry is available from HCNNM through the dental clinic 
site. The only dental provider, other than the single HCNNM location, is roughly 50 
miles away. Although adult dental needs in the area are great, limited capacity has 
Federally Funded Health Centers and CHIP  52  OEI-06-98-00320  forced HCNNM to only accept children at this time. Dental conditions observed among 
these children are comparable to those of the general U.S. population in the 1950's.61 
Some frustration has resulted because only selective benefits are covered under the 
current dental plan. As an example, expensive restorative measures, such as crowns, 
are covered, while preventive procedures, like pulp caps, are not.62 On another issue, 
the dental director believes that heavy metal amalgams should not be used for 
childrens fillings, yet the current plan wont pay for composite fillings. Despite the 
obvious need, the current low dental reimbursement rates are causing HCNNM to 
consider discontinuance of its dental services altogether. 
CHIP Readiness 
To insure its viability, HCNNM had completed progressive restructuring before the 
introduction of managed care and CHIP. Through consolidation of free-standing clinics 
over the past two decades, the center now provides services from 13 sites in 12 
towns. As a result, it is almost guaranteed inclusion in any significant health network 
in Northern New Mexico due to the large territory it serves and, in many cases, its 
being the only health care provider in those areas. Having already experienced a 
Statewide conversion of Medicaid to managed care, the centers mode of operation 
should not be impacted by expansions under CHIP. 
HCNNM has been aggressive in its provision of specialty services to its clients. The 
asthma clinic and Diabetes Control Program are being utilized, and may even warrant 
expansion, before reimbursement agreements have been secured with the managed 
care organizations. Although the health center is committed to these programs, 
securing adequate reimbursement is needed to guarantee funding for the long term. 
HCNNM provides dental services, that are reimbursed through a carve-out contract, 
which  is  administered  by  an  out-of-State  entity.  The  center  considers  dental 
reimbursement rates too low but reported the States intentions to provide additional 
dental funding with forthcoming legislation. It is hoped that raising the reimbursement 
level will entice other providers to offer dental services to Medicaid recipients, which 
will reduce the number of individuals not served due to limited capacity. 
Key Factors for Success 
The early foresight of HCNNM to merge with other small clinics is likely to be a 
significant factor in their continued existence. Well before managed care, they realized 
the increased stability and opportunities such action could bring. Being a larger 
organization, HCNNM is probably able to recruit management personnel of a higher skill 
and experience level than rural, free-standing clinics. This has aided them in their 
mission to serve their communities and maintain a significant service role under State-
instituted managed care and Medicaid expansions. 
HCNNM has maintained its commitment to providing quality health care to the 
underserved and has been aggressive in addressing emerging issues through its 
programming. The development of services targeting those with asthma and diabetes 
is a response to the increase in these diseases among their target populations. HCNNM 
Federally Funded Health Centers and CHIP  53  OEI-06-98-00320  has also realized that, because of transportation barriers and other factors, they could 
reach more children through schools and, therefore, have invested resources in their 
school-based clinics. These ventures make HCNNM highly effective in serving its 
clients. However, since many of these programs have not yet been included in 
contracts with health plans, HCNNM is not currently being reimbursed for them. 
Clearly, the center cannot continue to fund a variety of programs exclusively on its 
own, although it appears willing to do so if necessary. The ability of HCNNM to 
demonstrate, to the managed care plans, the long-term benefits and savings resulting 
from such innovative programming and the extent to which they can be incorporated 
into reimbursement contracts, will greatly impact the long term success of the center 
and the care it provides. 
Despite their own and the States efforts, HCNNM still perceives a deficit in outreach 
activities. Although the HCNNM took issue with both the States placement of 
eligibility workers in the hospitals, as well as the inability to settle the contract 
disputes, whether that loss will be compensated for by the additional 600 trained 
eligibility workers, and the promise of more, remains to be seen. It is likely that the 
training program will significantly improve outreach effectiveness. However, from the 
health centers standpoint, they are still unable to staff every clinic site with a full-time 
outreach worker. They perceive that any State outreach agenda should include aid to 
clinics for adding their own outreach personnel. 
Federally Funded Health Centers and CHIP  54  OEI-06-98-00320  E N D N O T E S

1.	 Primary Care Associations (PCAs) are State-based membership organizations that 
represent safety-net providers in their efforts to increase access to preventative and 
primary care services and to improve the health status of underserved and vulnerable 
populations.  The major sources of funding for PCAs are membership dues and grants 
from the Health Resources and Services Administration (HRSA) Bureau of Primary 
Health Care (BPHC).  In addition, PCAs receive funding from other sources including 
States and private foundations. 
2.	 Sara Rosenbaum, Kay Johnson, Colleen Sonosky, Anne Markus and Chris DeGraw, The 
Childrens Hour: The State Childrens Health Insurance Program, Health Affairs, 
January/February 1998, pp. 75-89. 
3.  Ibid. 
4.	 Neal Halfon, Moira Inkelas, Helen DuPlessis and Paul W. Newacheck, Challenges in 
Securing Access to Care for Children, Health Affairs, March/April 1999, pp. 48-63. 
5.	 The 70 percent enrollment rate refers to Medicaid eligible children who do not have 
private insurance.  Thomas M. Selden, Jessica S. Banthin, and Joel W. Cohen, 
Medicaids Problem Children: Eligible But Not Enrolled, Health Affairs, May/June 
1998, pp. 192 -200.  The authors used the 1996 data from the Medical Expenditure Panel 
Survey which is believed to capture the most comprehensive data available in a national 
survey regarding Medicaid enrollment. 
6.	 Margaret Edmunds and Molly Joel Coyce, eds., Americas Children: Health Insurance 
and Access to Care,  Institute of Medicine, National Research Council, 1998. 
7.	 Sara Rosenbaum, Barbara M. Smith, Peter Shin, Marcie H. Zakheim, Karen Shaw, 
Colleen A. Sonosky and Lee Repasch,  Negotiating The New Health System: A National 
Study of Medicaid Managed Care Contracts, The George Washington University Center 
for Health Policy Research, February 1998. 
8.	 The Lewin Group, Evaluation of the Impact of the Medicaid Waivers on Consumers and 
Services of Federally Qualified Health Centers, November 1997. 
9.	 Stephen A. Norton and Debra J. Lipson, Public Policy, Market Forces, and the Viability 
of Safety Net Providers, The Urban Institute, 1998. 
10.	 Colleen M. Grogan and Michael K. Gusmano, How Are Safety-Net Providers Faring 
Under Medicaid Managed Care? Health Affairs, March/April 1999, pp. 233 - 237. 
Federally Funded Health Centers and CHIP  55  OEI-06-98-00320  11.	 Debra J. Lipson and Naomi Naierman, Effects of Health Systems Changes On Safety-Net 
Providers, Health Affairs, Summer 1996, pp. 33 - 47. 
12.	 Debra J. Lipson, Medicaid Managed Care and Community Providers: New Partnerships, 
Health Affairs, July/August 1997, pp. 91 - 107. 
13.  Ibid. 
14.	 We originally planned to visit a seventh site where the health center also received a grant 
to operate a Health Care for the Homeless program.  However, injury of a study team 
member caused us to cancel this site visit.  We conducted a telephone interview with the 
Executive Director of this center and members of his staff.  Issues and insights from this 
interview are incorporated in the design of the national survey. 
15.	 Due to scheduling difficulties a few interviews were conducted by telephone with managed 
care organizations. 
16.	 We are very appreciative of the time spent and feedback from the Connecticut 
interviewees in honing our data collection tools. 
17.	 Due to taping problems in very few interviews, parts or all of these interviews were 
summarized from interviewer notes. 
18.  QSR NUD*IST 4, 2nd edition. 
19.	 Connecticut State Child Health Plan Under Title XXI of the Social Security Act: The 
HUSKY Plan, John Rowland Governor, State of Connecticut, January 7, 1998. 
20.  Fair Haven Health Center Uniform Data System Annual Report, 1997. 
21.  The flier was targeted roughly at the estimated  4th grade reading level of their clientele. 
22.	 Connecticut Department of Social Services Request for Proposals, Outreach for the 
HUSKY Program, 1998. 
23.	 Interview of Katrina Clark, Executive Director, Fair Haven Community Health Center, 
August 18, 1998. 
24.	 Memorandum of Agreement, Connecticut Department of Social Services and the Federally 
Qualified Health Centers, May 15, 1998. 
25.  Healthy Families Handbook, State of California, July 1998. 
26.  La Clinica de la Raza Uniform Data System Annual Report, 1997. 
27.	 The public charge issue is discussed at more length in a separate OEI report regarding 
CHIP and Medicaid application processes, The Childrens Health Insurance Program: 
Federally Funded Health Centers and CHIP  56  OEI-06-98-00320  State Application and Enrollment Processes: An Early Report from the Front Lines, 
OEI-05-98-00310. 
28.  Immigration Update, California Primary Care Association, 1998. 
29.  Memorandum from Pieternel Barel, July 23, 1999. 
30.	 Public Charge Fact Sheet, Department of Justice, Immigration and Naturalization 
Service, May 25, 1999. 
31.	 Although 60 percent of the Healthy Families target population is estimated to be Latino in 
California, only 22 percent of early enrollees were of Latin American descent. 
Immigration Update, California Primary Care Association, 1998. 
32.	 Healthy Families Program 1988-1999 Community Provider Plan Designation, Managed 
Risk Medical Insurance Board, 1998. 
33.  Interview of Jane Garcia, Executive Director, La Clinica de la Raza, September 3, 1998. 
34.  MIChild Bulletin, MIChild Eligibility 98-01, State of Michigan. 
35.  MIChild Contract between the Michigan Department of Community Health (template). 
36.  Cherry Street Health Services UDS report, February, 1998. 
37.  Ibid. 
38.	 Memorandum of Agreement Between Medical Services Administration and a Federally 
Qualified Health Center (FQHC), July 1, 1997. 
39. 	 Free & Low-Cost Health Insurance: Children You Know are Missing Out, Donna Cohen 
Ross and Wendy Jacobson, Center on Budget and Policy Priorities, 1998. 
40.  From the State of Colorado CHP+/Baby Care Kids Care application. 
41.  From the State of Colorado CHP+/Baby Care Kids Care application. 
42.	 A visit co-payment is usually five dollars. A center then submits a write-off to the State 
which reimburses 27 percent of the centers costs. The remaining percent (roughly 70%) is 
absorbed by the center internally. 
43.	 According to the Primary Care Association director, HCFA made the decision, based on 
Federal law, that the health centers could not use the discounted vaccines under a 
freestanding commercial plan. Health centers would then need to find alternative ways to 
purchase vaccines for children under the CHP+ plan. The director noted that the Primary 
Care Association had plans to try to change the law at the national level so that States 
who chose a non-Medicaid approach could use these vaccines for children. 
Federally Funded Health Centers and CHIP  57  OEI-06-98-00320  44.	 Partners for Healthy Children in South Carolina, Governor David M. Beasley, 
September 1, 1998. 
45.	 Medicaid Managed Care materials provided by South Carolina Medicaid Program, 
September, 1998. 
46.	 Informational materials provided by the South Carolina Medicaid Program, September, 
1998. 
47.  Family Health Center Uniform Data System Annual Report, 1997. 
48.	 Partners for Healthy Children in South Carolina, Governor David M. Beasley, 
September 1, 1998. 
49.	 Portability of coverage refers to the ability of the family to use South Carolina Medicaid 
coverage in another State.  Transferability refers to reciprocal agreements between States 
to accept the eligibility status as determined by the original State. 
50.	 We conducted a telephone interview with the director of Carolina Health Center because 
this center has a Migrant Health Center grant to serve this population. 
51.	 Model Application Template for State Child Health Plan Under Title XXI of the Social 
Security Act State Childrens Health Insurance Program, State of New Mexico. 
52.	 Cimmaron members can switch primary care providers or health plans every 30 days, 
while those under Presbyterian Salud or Lovelace are subject to a 6 month lock-in. 
53.	 A Health and Human Services press release dated January 11, 1999 announced the 
approval of New Mexicos plan for childrens health insurance. 
54.  Ibid. 
55.	 Model Application Template for State Child Health Plan Under Title XXI of the Social 
Security Act State Childrens Health Insurance Program, State of New Mexico. 
56.	 According to the PCA director, a previous Secretary of Human Services Department 
interpreted regulations as only requiring that at least one Federally Qualified Health Center 
(FQHC) be involved in the States managed care plan under CHIP. This official is no 
longer in the position, and HCFA got involved in the process which determined that 
HMOs would have to contract with one FQHC per county. 
57.	 Interviewees referred to this as the Wisconsin model, although we were unable to 
determine the specific characteristics of this model. 
58.	 The PCA director reported that contract negotiations broke down between the State and 
the hospitals. The Human Services Department stated that the contract simply couldnt be 
re-negotiated. However, the hospitals claim that although the Human Services Department 
Federally Funded Health Centers and CHIP  58  OEI-06-98-00320  was receiving 50 percent reimbursement from the Federal government, for the eligibility 
workers, and were responsible for matching the other 50 percent, they attempted to bill 
the hospital for the full amount. 
59.  Health Centers of Northern New Mexico, Caring For You..., Informational Brochure. 
60.	 CPT stands for common procedural terminology. These codes are utilized by health care 
providers in billing insurers. 
61.	 This comparison was drawn by the Senior Dentist of Health Centers of Northern New 
Mexico. 
62.	 A pulp cap covers an area of small exposure due to decay and prevents further damage, 
while a crown covers the entire tooth when too much surface damage has occurred. 
Federally Funded Health Centers and CHIP  59  OEI-06-98-00320  B I B L I O G R A P H Y

Bureau of Primary Health Care, Department of Health and Human Services and National 
Association of Community Health Centers, Inc., Final Report: 1998 Health Center Clinic Hours 
and Services, 1999. 
Cousineau, Michael R. and Eve Wittenberg, Study of the Health Care for the Homeless Program, 
Bureau of Primary Health Care, September 1995. 
Edmunds, Margaret and Molly Joel Coyce, eds., Americas Children: Health Insurance and 
Access to Care, Institute of Medicine, National Research Council, 1998. 
Feld, Peter, Courtney Matlock, and David R. Sandman, Insuring the Children of New York Citys 
Low-Income Families: Focus Group Findings on Barriers to Enrollment in Medicaid and Child 
Health Plus, The Commonwealth Fund, December 1998. 
The George Washington University Center for Health Policy Research, Expansions of Coverage, 
Managed Care Create New Outreach Challenges, Health Policy, Child Health, Vol. 2, No. 1, 
Winter 1995. 
The George Washington University Center for Health Policy Research, Implementing Title XXI: 
States Face Choices, Health Policy, Child Health, Vol. 4, No. 4, Fall 1997. 
Grogan, Colleen M. and Michael K. Gusmano, How Are Safety-Net Providers Faring Under 
Medicaid Managed Care, Health Affairs, March/April 1999, pp. 233-237. 
Halfon, Neal, Moira Inkelas, Helen DuPlessis and Paul W. Newacheck, Challenges in Securing 
Access to Care for Children, Health Affairs, March/April 1999, pp. 48-63. 
Hall, Christopher H., Mary Alice Lee, and Judith Solomon, The Childrens Health Council: A 
Community Foundation/State Government Partnership, Health Affairs, July/August 1999, pp. 
167 - 171. 
Immigration and Naturalization Service, Department of Justice, Public Charge Fact Sheet, May 
25, 1999. 
The Lewin Group, Evaluation of the Impact of the Medicaid Waivers on Consumers and Services 
of Federally Qualified Health Centers, November 1997. 
Federally Funded Health Centers and CHIP  60  OEI-06-98-00320  The Lewin Group, The Impact of Expanding Childrens Health Insurance on the Role of 
Maternal and Child Health Title V Programs, May 20, 1998. 
Lipson, Debra J., Medicaid Managed Care and Community Providers: New Partnerships, Health 
Affairs, July/August 1997, pp.91-107. 
Lipson, Debra J. and Naomi Naierman, Effects of Health Systems Changes on Safety-Net 
Providers, Health Affairs, Summer 1996, pp. 33-47. 
Norton, Stephen A. and Debra Lipson, Public Policy, Market Forces and the Viability of Safety 
Net Providers, The Urban Institute, 1998. 
Office of Inspector General, Department of Health and Human Services, School-Based Health 
Centers and Managed Care, OEI-05-92-00680, December 1993. 
Office of Inspector General, Department of Health and Human Services, The Childrens Health 
Insurance Program: State Application and Enrollment Processes An Early Report from the Front 
Lines, OEI-05-98-00310, 1999. 
Riley, Trish, How Will We Know If CHIP Is Working? Health Affairs, March/April 1999, 
pp.64-66. 
Rosenbaum, Sara, Kay Johnson, Colleen Sonosky, Anne Markus and Chris DeGray, The 
Childrens Hour: The State Childrens Health Insurance Program, Health Affairs, 
January/February 1998, pp. 75-89. 
Rosenbaum, Sara, Barbara M. Smith, Peter Shin, Marcie H. Zakheim, Karen Shaw, Colleen A. 
Sonosky and Lee Repasch, Negotiating The New Health System: A National Study of Medicaid 
Managed Care Contracts, The George Washington University Center for Health Policy Research, 
February 1998. 
Ross, Donna Cohen and Wendy Jacobson, Free and Low-Cost Health Insurance: Children You 
Know are Missing Out, Center on Budget and Policy Priorities, 1998. 
Schauffler, Helen Halpin and Jessica Wolin, Community Health Clinics under Managed 
Competition: Navigating Uncharted Waters, Journal of Health Politics, Policy and Law, Vol. 21, 
No. 3, Fall 1996, pp.461- 488 
Selden, Thomas M., Jessica S. Banthin, and Joel W. Cohen, Medicaids Problem Children: 
Eligible But Not Enrolled, Health Affairs, May/June 1998, pp.192-200. 
Federally Funded Health Centers and CHIP  61  OEI-06-98-00320  A P P E N D I X  A

DOCUMENTS REVIEWED

Title  Author/Agency  Date 
CALIFORNIA 
Expanding Healthy  California Primary Care Association  10/98 
Horizons 
Community Health  CPCA - Carmela Castellano, JD, CEO  07/98 
Centers and Healthy 
Families 
Immigration Update  California Primary Care Association  08/98 
Newsletter - CPCA  California Primary Care Association  08/98 
Strengthens Clinic Role in 
Rural Projects 
Letter to Sidney Trieger - CPCA - Carmela Castellano, Esq., CEO  07/98 
California Compliance 
with Balanced Budget 
Act 
Senate Bill - An act to  Introduced by Senator Rosenthal  02/97 
amend Section 14087- (Principal coauthor: Senator Watson) 
325 of the Welfare and 
Institutions Code, relating 
to public social services. 
Healthy Families Program  Managed Risk Medical Insurance  09/98 
Subscribers Enrolled By  Board Home Page 
Ethnicity 
Letter to Carmela  DHHS/Health Care Financing  09/98 
Castellano, Esq., CEO  Administration 
Affordable Health Care  State of California  07/98 
For Children and Teens 
Handbooks 
Federally Funded Health Centers and CHIP  62  OEI-06-98-00320  Title  Author/Agency  Date 
CALIFORNIA continued 
Social Security Act- Social Security Administration  N/A 
1902(a)(55) 
Welfare and Institutions  State of California  N/A 
Code 
42 CAR 435.904  DHSS/HCFA  N/A 
OBRA 90 - Outstanding  Social Security Administration  N/A 
Mandate 
State Medicaid Manual - DHSS/HCFA  06/91 
Section 2905 
Letter to Hospital/Clinic  DHSS/State of Carolina - Health and  N/A

Administrator  Welfare Agency

Memo to All County  Outstanding Eligibility Worker (EW)  35856

Welfare Directors,  Program Petitions and Reporting

Administrative Officers,  Update

Medi-Cal Program 
Specialist/Liaisons, 
Outstationed Eligibility 
Workers Coordinators 
Medical Service  Community Health Center Network  N/A

Agreement between 
Alameda Alliance for 
Health & Community 
Health Center Network 
Letter to Providers on  Blue Cross of California  35954

Healthy Families Program 
Media Release  Latino Coalition for a Healthy  35977

California

California Kids Enrollment  La Clinica de La Raza  N/A

Form 
Federally Funded Health Centers and CHIP  63  OEI-06-98-00320  Title  Author/Agency  Date 
FQHC Reconciliation  Alameda Alliance for Health  36041 
Statement 
CALIFORNIA continued 
Medical Service  Alameda Alliance for Health  N/A 
Agreement between 
Alameda Alliance for 
Health & Alameda 
County Ambulatory Care 
Amended and Restated  Alameda Alliance for Health  N/A 
Medical Service 
Agreement between 
Alameda Alliance for 
Health & Community 
Health Center Network 
Quality Health Care For  Alameda Alliance for Health 
Your Children Brochure 
Instruction on usage of  Alameda Alliance for Health  N/A 
Co-Pay Card, Guidelines 
for Childrens Checkups, 
Customer Complaint 
Forms, Provider List 
Letter to Providers on  Alameda County Health Care Services  35957 
Healthy Families  Agency 
Combined Evidence of  Alameda Alliance for Health  N/A 
Coverage & Disclosure 
Form 
Article 4. Risk Categories  N/A  N/A 
and Family Contributions 
Health Plan Model  Healthy Families Program  N/A 
Contract 
Federally Funded Health Centers and CHIP  64  OEI-06-98-00320  Title  Author/Agency  Date 
CALIFORNIA continued 
Memorandum to Sandra  Sara Rosenbaum, GWUMC/CHPR  35748 
Shewry, MRMIB - Re:  The George Washington University 
Defining what constitutes  Medical Center 
a community provider 
under the Health Family 
Program 
Letter to Clifford L.  Mark D. Smith, M.D., M.B.A. - 35767 
Allenby, Chair, Managed  California Health Care Foundation 
Risk Medical Insurance 
Board 
HFP Subscribers Enrolled  Healthy Families Program  36028 
in CPP By County 
1998-99 Community  Healthy Families Program  N/A 
Provider Plan Designation 
Hospital Providers By  Healthy Families Program  35823 
County 
Clinic Providers By  Healthy Families Program  N/A 
County 
COLORADO 
Parents Handbook  Child Health Plan Plus (CHP+)  N/A 
Heres How To Make  Child Health Plan Plus (CHP+)  N/A 
Your Monthly 
Payments... 
Benefits Booklet  Child Health Plan Plus (CHP+)  N/A 
Choose An MCO - Child Health Plan Plus (CHP+)  N/A 
(Information Packet) 
Provider Manual  Colorado Access  05/98 
Member Handbook,  Colorado Access  N/A 
Provider Directory, 
Evidence of Coverage, 
Provider Bulletin 
Federally Funded Health Centers and CHIP  65  OEI-06-98-00320  Title  Author/Agency  Date 
. 
COLORADO continued 
Center/Grantee Profile - Plan de Salud del Valle, Inc  35840 
Cover Sheet 
Listing of Community  Colorado Community Health Network  N/A 
Health Centers/Federally 
Qualified Health Centers 
10 Ways To Tell the  Colorado Community Health Network  N/A 
Difference Between A 
Community Health Center 
& A Rural Health Clinic 
Charts on Health Center  Colorado Community Health Network  N/A 
Patients 
Application for Health  Child Health Plan Plus (CHP+)  N/A 
Care for Colorado 
Children 
CONNECTICUT 
MOA between Dept of  Connecticut Department of Social  35928 
Social Services &  Services 
Community Health 
Network of Connecticut, 
Inc. 
Center/Grantee Profile - Fair Haven Community Health Center  35840 
Cover Sheet 
Request For Application - Department of Social Services  N/A 
Outreach for the HUSKY 
Program 
Utilization and Quality  Connecticut Community Health  N/A 
Data, Directory of  Centers 
Members, 
Conference on  Connecticut Primary Care Association  35969 
Collaboration 
Federally Funded Health Centers and CHIP  66  OEI-06-98-00320  Title  Author/Agency  Date 
CONNECTICUT 
continued 
State Child Health Plan  State of Connecticut  35801 
Under Title XXI of the 
Social Security Act 
Purchase of Service  State of Connecticut  N/A 
Contract Between The 
CT Dept of Social 
Services & HealthRight, 
Inc. 
Letter to Joyce Thomas,  DHHS/HCFA  34899 
Commissioner, DSS 
MICHIGAN 
Memorandum of  Robert M. Smedes
 35611 
Agreement Between the  Chief Executive Officer

Medical Services  Medical Services Administration

Administration and  Michigan Department of Community

Federally Qualified Health  Health 
Centers 
Brochure: Cherry Street  Chris Shea
 1998 
Health Services  Executive Director

Introduces a New  Cherry Street Health Services

Opportunity for 
Uninsured Children in 
Michigan 
Testimony to House  Michigan Primary Care Association
 35828 
Appropriations Sub-
Committee Re: MIChild 
Proposed Plan 
Letter to Althia Carr Re:  Katheryn Harstad
 36019 
MIChild Application  Farmworker Legal Services

Federally Funded Health Centers and CHIP  67  OEI-06-98-00320  Title  Author/Agency  Date 
MICHIGAN continued 
Letter to Mr. Richard  Robert M. Smedes  35858 
Fenton Re: Michigans  Chief Executive Officer 
Response to HCFA  Medical Services Administration 
questions regarding  Michigan Department of Community 
SCHIP application  Health 
Substitute for Michigan  Michigan House of Representatives  1998 
House Bill No. 5532 
MiChild appropriations 
MIChild Contract  Michigan Department of Community  35946 
Health 
MIChild Member  Community Choice Michigan  June 1998 
Handbook 
MIChild Application  Michigan Department of Community  1998 
Health 
MIChild Certificate of  Community Choice  Michigan  June 1998 
Coverage 
Primary Care Group  Community Choice Michigan  October 
Aggreement  1997 
Provider Services  Community Choice Michigan  August 
Agreement Risk Sharing  1997 
Addendum 
MIChild Eligibility Manual  Michigan Department of Community  35946 
98-01  Health 
MIChild and Healthy Kids  Michigan Family Independence  35960 
Application  Agency 
NEW MEXICO 
Memo: Amendment to  New Mexico Human Services  36055 
FQHC Agreement. From: 
Charles Milligan, Director 
Member Handbook  Cimarron Salud (Health Plan)  N/A 
(Bilingual) 
Federally Funded Health Centers and CHIP  68  OEI-06-98-00320  Title  Author/Agency  Date 
NEW MEXICO continued 
Member Handbook  Presbyterian Salud (Health Plan)  N/A 
(Bilingual) 
Member Handbook 1998  Lovelace Community Health Plan  36068 
(A Salud Program) 
New Mexico Managed  Health Centers of Northern New  N/A 
Care Program- SALUD to  Mexico 
Your Health: Pamplets, 
Newsletters 
Presumptive Eligibility  Medical Assistance Division  35976 
and Medicaid On Site 
Application Assistance 
Training 
Provider Policies  Health Care Professional Services  34730 
Intake/Admission Criteria  N/A  34221 
Letter: Albuquerque Girls  State of New Mexico - Children,  N/A 
Community Residential  Youth and Families Department -
Facility - Admission  Juvenile Justice Division 
Criteria 
EPSDT Psychosocial  New Mexico Child and Adolescent  05/96 
Rehabilitation Level of  Mental Health Services 
Care Assessment 
Abstract Criteria 
Memo to: Steve Smith,  New Mexico Human Services  N/A 
Executive Account  Department 
Manager - Re: Request 
for Ad hoc (Services) 
Memo to: Salud Managed  New Mexico Human Services  35582 
Care - Re: Guidance  Department 
Memorandum #8 - Native 
American Issues 
Federally Funded Health Centers and CHIP  69  OEI-06-98-00320  Title  Author/Agency  Date 
New Mexico continued 
Memo to: Salud  New Mexico Human Services  35572 
Managed Care - Re:  Department 
Guidance Memorandum 
#7 - Questions 
Memo to: Salud Managed  New Mexico Human Services  35571 
Care - Re: Guidance  Department 
Memorandum #6 - MCO 
Client-specific Requests 
for Current UR Files 
Memo to: Salud Managed  New Mexico Human Services  35565 
Care - Re: Guidance  Department 
Memorandum #5 -
Marketing Guidelines 
Memo to: Salud Managed  New Mexico Human Services  35555 
Care Contractors - Re:  Department 
Guidance Implementation 
Memorandum #4 
Memo to: Salud Managed  New Mexico Human Services  35549 
Care Contractors - Re:  Department 
Guidance Implementation 
Memorandum #3 
HSD Response to Benefit  New Mexico Human Services  N/A 
Questions  Department 
Memo To: Salud  New Mexico Human Services  35535 
Managed Care  Department 
Organization - Re: 
Guidance Implementation 
Memorandum #1 
Salud Managed Care  N/A  35990 
General Program 
Description 
Federally Funded Health Centers and CHIP  70  OEI-06-98-00320  Title  Author/Agency  Date 
NEW MEXICO continued 
SALUD Enrollees By Plan  N/A  36039 
For The September 98 
Capitation 
State Childrens Health  New Mexico Human Services  N/A 
Insurance Program  Department 
(SCHIP) - (Title XIX) 
Medicaid - Proposed 
Regulations 
Evaluation of MCOs  New Mexico Human Services  N/A 
Performance Against NM  Department 
Quality Management 
Standards 
Model Application  N/A  N/A 
Template for State Child 
Health Plan Under Title 
XXI of the Social Security 
Act - State Childrens 
Health Insurance Program 
Medicaid Managed Care  State of New Mexico - New Mexico  N/A 
Services Agreement - Human Services Department 
Presbyterian Health Plan. 
Inc. of Albuquerque, New 
Mexico 
Medicaid Managed Care  State of New Mexico - New Mexico  N/A 
Services Agreement - Human Services Department 
Cimarron Health 
Maintenance 
Organization, of Las 
Cruces 
Medicaid Managed Care  State of New Mexico - New Mexico  N/A 
Service Agreement - Human Services Department 
Lovelace Health Plan of 
Albuquerque, New 
Mexico 
Federally Funded Health Centers and CHIP  71  OEI-06-98-00320  Title  Author/Agency  Date 
SOUTH CAROLINA. 
Medicaid Program  State of South Carolina  35550 
Handbook 
Migrant Health Program  N/A  35838 
Chart 
Managed Care Options  NA  N/A 
A New Choice Booklet  Medicaid Managed Care Health Plans  N/A 
Partners for Healthy  Family Health Centers, Inc.,  N/A 
Children Packet  Orangeburg 
Packet for Applicants  S. Carolina Partners for Healthy  N/A 
whose Counties do not  Children 
have HMOs 
Contract Between South  N/A  N/A 
Carolina DHSS and _____ 
For Purchase and 
Provision of Medical 
Services Under the S. 
Carolina Medicaid HMO 
Program 
Federally Funded Health Centers and CHIP  72  OEI-06-98-00320