Legacy Community Health Services v Smith: Examining the Legal and Practical Implications for Community Health Centers and Their Patients

WASHINGTON, DC and NEW YORK, NY (August 7, 2018) – In Legacy Community Health Services v Smith, the United States Court of Appeals for the Fifth Circuit upheld a decision by the Texas Medicaid program to withhold payment to a community health center for care furnished to Medicaid beneficiaries on an out-of-network basis. The dispute over unpaid claims arose following a decision by a managed care organization (MCO) to exclude Legacy Community Health Services from its provider network after Texas ordered the MCO to dramatically increase its payments to cover amounts the state owed to Legacy. Patients continued to seek covered services from Legacy, and the state refused to pay.

In light of the broader legal and financial impact of the Fifth Circuit decision, the Dean and scholars at the Milken Institute School of Public Health (Milken Institute SPH) at the George Washington University (GW) on August 6 filed an amicus brief in support of Legacy’s pending petition for certiorari (Supreme Court review).  The amicus brief is accompanied by an analysis prepared by Leighton Ku, PhD, MPH, a Professor of Health Policy and Management at Milken Institute SPH, and colleagues -- part of the issue brief series prepared by the Geiger Gibson/RCHN Community Health Foundation Research Collaborative -- that estimates the national implications of the appellate court’s decision for community health centers and their patients.

“This case raises significant questions of federal law regarding longstanding federal Medicaid policies governing payment for covered services furnished by federally qualified health centers,” said Sara Rosenbaum, JD, the Harold and Jane Hirsh Professor of Health Law and Policy at Milken Institute SPH, one of the scholars represented on the amicus brief.

Ku, Rosenbaum and other authors of the issue brief estimate that the impact of the Texas payment policy, if adopted by other states using comprehensive Medicaid managed care arrangements and applied broadly to all non-emergency care furnished by health centers excluded from MCO networks, could reduce total community health center revenue for affected health centers nationwide by 4.3 percent to 8.6 percent annually. Such reductions would have a measurable impact on patient care and staffing. 

“An ample body of research shows that community health centers provide high-quality, cost effective care to underserved communities across America,” said Feygele Jacobs, DrPH, President and CEO of the RCHN Community Health Foundation, whose ongoing gift supports the Geiger Gibson Program. “The potential for loss of access to care for residents of medically underserved communities provides cause for concern.”

The Milken Institute SPH Dean and Scholars were represented by Thomas Barker, Ross Margulies, Andrew London, and Rachel Hutchinson of Foley Hoag LLP in filing the amicus brief. The amicus brief can be accessed here.

The issue brief, “Legacy Community Health Services v. Smith: What are the National Implications for Community Health Centers and Their Communities?” can be accessed here.

The Legacy Community Health Services petition for certiorari can be accessed here.

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The Geiger Gibson Program in Community Health Policy, established in 2003 and named after human rights and health center pioneers Drs. H. Jack Geiger and Count Gibson, is part of the Milken Institute School of Public Health at The George Washington University.

The RCHN Community Health Foundation is the only foundation in the U.S. dedicated solely to community health centers. The Foundation’s gift to the Geiger Gibson program supports health center research and scholarship.

The Milken Institute School of Public Health at the George Washington University is the only school of public health in the nation’s capital.