Community clinics in California that have been waiting for more than a year to be reimbursed for COVID-19 vaccinations may soon be flooding state officials with tens of millions of dollars in bills.
The clinics, which serve California’s poorest and most vulnerable residents, may be owed as much as $408 million for the 6.1 million vaccinations they have administered to patients.
Now, many clinics say they’re teetering on the edge of a financial cliff and desperately need the money from the state Department of Health Care Services. Some say they already have been forced to cut back patient services by reducing their hours or postponing doctor’s visits.
Without funds from the state, CEO Jim Mangia said St. John’s Well Child and Family Center in South Los Angeles will have to shut down vaccination efforts by April 1.
The largest community health clinic in Los Angeles, St. John’s has administered more than 441,000 COVID-19 shots, mostly to people of color with lower incomes. The clinic is awaiting state payment for at least a third of them, costing $7 million; the rest have been reimbursed under private insurance.
“It’s frustrating because the state says they’re committed to vaccine equity, but they’re not paying the vaccine equity providers,” Mangia said.
California’s 1,300 community health centers are mandated to provide free or reduced-cost care to people with no or inadequate insurance. They’ve been integral to the state’s efforts to reduce vaccination inequities. About 80% of vaccines provided at California’s community clinics have gone to people of color, according to federal data.
The clinics were told not to submit claims to the state until now — a year after they spent millions ramping up to vaccinate patients — because the state and federal government had to figure out how to pay for vaccinations.
Last month, the federal government agreed to pay California $67 for each COVID-19 vaccination.
The Biden administration announced Tuesday that it had run out of money to pay for free COVID-19 vaccinations, tests and treatment. State officials said this will not affect reimbursement for vaccines already administered.
Health department officials said in a statement to CalMatters that they have no idea how much money they owe the clinics. The agency has yet to issue guidance on how exactly to submit their claims, and clinics don’t know how long it will take to get paid after sending the state their bills.
“It’s so painful that it’s been delayed,” said Andie Martinez Patterson, senior vice president of the California Primary Care Association, which represents community clinics. “Health centers have been holding millions of dollars of claims for over a year. We are desperate that it comes as soon as possible.”
Several clinics told CalMatters that services to their patients are suffering because of the payment delays, since they’ve been forced to use their federal emergency funds to cover the cost of vaccines instead of salaries and other primary care services.
Patterson said she hasn’t heard of any clinics closing, but many have cut back. That means fewer providers and longer wait times for patients who need medical care.
Where is the money?
Before the pandemic, there was no system in place to pay community clinics for a single service like a vaccine. Typically, shots or scans are billed as part of a provider visit, but that requires being seen by a doctor, which doesn’t happen at walk-up clinics or mass vaccine drives.
Instead, state officials told community clinics to hold onto their receipts while the Department of Health Care Services and federal government worked out the payment system.
The health department blames the federal government for the delay in payments. California’s initial request for alternative payment was submitted to the federal government in March 2021, but it wasn’t approved until the end of February, nearly a year later.
“The request for reimbursement for these ‘vaccine only’ visits required additional guidance from [the Centers for Medicare and Medicaid Services] and modifications to the original proposal,” a spokesperson said in a statement. Also, the state agency said it “needed to work collaboratively with clinics to obtain data to support the modified proposal of $67 per administration.”
Community clinics say they felt a responsibility to administer vaccinations to their patients rapidly, even if payment wasn’t guaranteed.
“I don’t think there is anyone who lives in South LA who hasn’t lost a loved one, lost a job, lost a home because of COVID,” Mangia said. “In the midst of that incredible suffering, we decided to mobilize.”
St. John’s had considerable expenses, reaching into the millions of dollars: It purchased freezers to store 80,000 vaccines, opened 26 vaccination sites in Los Angeles and hired nearly 600 people to run the clinics six days a week.
The clinic received nearly $20 million in federal funds from the American Rescue Plan Act, which was supposed to subsidize primary care efforts. But Mangia said most of those funds were used to pay for vaccination efforts. The $7 million the state owes St. John’s is a drop in the bucket compared to its total costs, but it would still help, Mangia said.
Now, just as St. John’s is focusing its efforts on vaccinating children under 5, it will have to close its vaccination sites within two weeks without the funds.
“It’s not like we have the capacity to float that kind of money for an extended amount of time,” Mangia said.
In Orange County, the Families Together health center has consistently been among the top 10 vaccine providers, administering 56,000 shots in the past year. Between COVID-19 tests and vaccines, about 28,000 patient visits have not been reimbursed, CEO Alexander Rossel said, adding that the clinic is owed at least $1 million for those services.