Temple Health is converting six primary-care doctors’ offices into federal health centers

Temple University Health System plans to convert six of its primary-care doctors’ offices into a type of federal health center that gets better Medicare and Medicaid rates under a program to increase access to health care in low-income communities and in neighborhoods underserved by doctors, Temple officials said this week.

Temple did not identify which of its primary-care offices will become federally qualified health centers on Jan. 1. In an interview, Temple CEO Mike Young called the change beneficial to both Temple and the community.

For starters, local residents will have more input on what happens there, because the centers must have boards of directors that are one-third patients, he said.

“It’s really good for the community, because now you have community input in the local primary-care office,” Young said. “And it’s good for us, because if we have that primary-care office on the corner we’re subsidizing it, and now we won’t have to subsidize it because it’s paid a little better.”

Most physician groups owned by health systems lose money, but they help with the flow of patients to hospitals, which are more likely to be profitable.

» READ MORE: Temple faced a $26 million operating loss in its most recent quarter. It was better than last year.

Officially, the Temple centers will be designated “FQHC look-alikes” because unlike stand-alone federal clinics, they won’t be completely independent. They will use Temple’s system for electronic health records, for example.

Temple got the idea to convert the primary-care offices into federally qualified health centers from Lehigh Valley Health Network, Young said. Lehigh Valley Health, which is based in Allentown, made the change in 2021 at eight practices.

The conversion is attractive because the health centers then qualify for enhanced Medicaid and Medicare rates that are based on actual costs as opposed to fees negotiated with insurance companies, according an announcement of the Lehigh Valley conversion. The centers are also eligible for discounted drugs under the 340B program.

The look-alike centers do not receive direct funding from the federal Health Resources and Services administration, which regulates federally qualified health centers.

Young did not immediately have an estimate of how much extra revenue the clinics would receive, but he said the money would stay at the health centers, and not be funneled back to the health system.

Philadelphia has 40 federally-qualified health centers and look-alikes, according to the city’s Department of Public Health.

At least one other Philadelphia health system employs physicians who staff a federally qualified health center. Physicians from Penn Medicine’s Department of Family Medicine and Community Health staff the PHMC Health Center on Cedar in West Philadelphia, as well as several others in the city.