Fifteen Virginia health centers are suing the state government,alleging violations of state and federal law due to underpayments on Medicaid reimbursements.
The medical providers are Federally Qualified Health Centers (FQHCs),nonprofit clinics federally funded to provide primary care services irrespective of a patient’s ability to pay,with fees offered on a sliding scale.
FQHCs serve as a key healthcare source for Medicaid recipients and are reimbursed through the state-federal joint program for certain expenditures.
filed in federal court, the suit alleges that the virginia Department of Medical Assistance Services (DMAS) has under-reimbursed the centers for 25 years, paying less than the average cost per visit for Medicaid patients. This shortfall, the suit claims, has impacted the FQHCs’ other funding sources.
Brian Harris, CEO of the Greater Prince William Community Health Centre, stated the coalition spent four years attempting to resolve the issue with state policymakers before filing suit. The Northern Virginia FQHC is one of 15 centers statewide involved in the legal action.
“We’ve weary every other option before coming to this point,” he said.”Legal action is now necessary to protect the long-term viability of FQHCs in virginia and the patients who rely on us.”
The plaintiffs argue that DMAS has set arbitrary payments when calculating the prospective payment system (PPS), where Medicaid pays providers a predetermined amount for services rather than itemizing costs.
The suit claims DMAS has “systematically understated the statutorily mandated PPS rate.”
Virginia’s FQHCs aren’t alone in this fight – Connecticut health centers filed a similar suit earlier this year, and a Florida court sided with FQHCs in a Medicaid rate dispute in 2023.