Hospitals Divert Primary Care Patients to Health Center ‘Look-Alikes’ to Boost Finances

by | Sep 9, 2022 | Health

A growing number of hospitals are outsourcing often-unprofitable outpatient services for their poorest patients by setting up independent, nonprofit organizations to provide primary care.

Medicare and Medicaid pay these clinics, known as federally qualified health center look-alikes, significantly more than they would if the sites were owned by hospitals.

Like the nearly 1,400 federally qualified health centers — which get those additional dollars as well — a clinic designated by the government as a “look-alike” is also eligible for federal programs that could help reduce costs and recruit providers. They allow the clinics to obtain prescription drugs at deep discounts and attract doctors by making them eligible for a government program that helps them pay off their student debt if they work in an area with a shortage of medical providers.

But unlike the community health centers, the look-alikes do not get an annual federal grant to cover operational costs. Nor do the look-alikes get the financial benefit in which the federal government covers their malpractice risks.

Even though they are not part of a hospital system, many of the hospital-formed look-alikes have clinics on hospital campuses or within a short distance. As a result, the clinics can help divert patients without urgent needs from expensive emergency rooms.

That helps reduce losses, especially from uninsured patients who might have been using the ER for primary care. Converting clinics to l …

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