By Pamela Wood and Meredith Cohn, The Baltimore Sun
9:12 PM EDT, June 18, 2014
When Will Boyd arrived Wednesday at the People's Community Health Center's Brooklyn Park clinic, he was furious to learn that the center will close at the end of the month. The 63-year-old has two broken teeth needing repair and said he was told he couldn't be helped there.
"This is not a way to take care of people when they've got pain," said the Brooklyn Park resident.
Local and state health officials are scrambling to find alternate health care providers for People's 1,100 low-income clients after the Baltimore-based nonprofit announced this week that it will close its five centers in Baltimore and Anne Arundel County.
Court records outline financial troubles at the organization, which was founded in 1970. People's is subject to an IRS tax lien of nearly $500,000 and faces lawsuits involving monetary claims — including one filed by Baltimore City. Several employees, meanwhile, have filed complaints alleging violations of wage-and-hour laws.
Maryland Health Secretary Dr. Joshua M. Sharfstein said People's has "very serious financial and operational problems." He added, "It's hard to imagine a path back."
State health officials say the loss of the organization — which operates clinics in Waverly, Station North and Pigtown in the city, as well as in Brooklyn Park and Odenton in Anne Arundel County — would be a serious blow. Area residents obtaining health insurance under the Affordable Care Act often turn to such clinics for treatment.
Nationwide, such community centers have been expected to absorb millions of patients newly covered under the federal law. The centers serve about 22 million patients, up from 18 million before that law took effect, according to the National Association of Community Health Centers.
The number is expected to rise to more than 25 million this year.
Sharfstein said making low-cost care available to People's patients is a high priority, and Baltimore has other "safety net clinics" to help. In Anne Arundel County, however, People's was the only such center, he said.
At People's, patients without insurance pay based on a sliding scale. The clinics also treat patients who have government insurance such as Medicaid.
Tina Davis, site manager for the Waverly clinic, said in a statement that employees are worried about their patients, with whom they have developed bonds over the years.
"In the absence of access to affordable health care in the neighborhoods that People's operates from, we fear that many of our patients will ultimately go without medical and behavioral health treatment, and even medication, which could result in potentially life-threatening harm," Davis wrote in the statement, which she said was written on behalf of her colleagues at the clinic.
"Personally, I feel great disappointment for letting down the communities we were supposed to be helping," she wrote.
Employees at the Brooklyn Park clinic declined to comment on the closure or on referral plans for patients such as Boyd.
The extent of People's financial problems remains unclear. In announcing the closure Tuesday, the organization's interim CEO, Stacy C. Fruhling, said it hopes to reopen the clinics one day.
The clinics' operations are supported by a grant from the federal Health Resources and Services Administration, and in her letter Fruhling cited "ongoing delays" in receiving funds. She and others working for People's have declined to comment further.
Officials with the federal agency have said that the annual grant of $2.4 million is intact and that the agency is working with People's on its financial problems.
But People's is subject to an IRS tax lien of $463,925.62, filed in May. Court records show the nonprofit owes the government for quarterly employee taxes dating to mid-2012. Court records state the IRS has a lien on "all property and rights to property" belonging to People's as a result of the unpaid taxes, as well as interest and penalties.
The IRS will not comment on tax lien cases.
The tax lien prompted Anne Arundel County to suspend a $1.9 million grant last week that had been awarded to People's as partial funding for a new planned joint health and community center in Severn.
Additionally, People's is being investigated by state labor officials after three employees filed complaints about wage-and-hour violations. The state Department of Labor, Licensing and Regulation said it cannot provide details of the complaints because they are confidential.
The nonprofit faces lawsuits from creditors, including Baltimore's government, which says it is owed more than $18,000. A hearing is scheduled for July 23, according to online court records.
Other claims have been filed by Gant Brunnett Architects of Baltimore, for $2,500, and AMJ Lawn and Landscaping of Pasadena, for $3,897.20 regarding alleged nonpayment for snow removal.
In recent months, some People's clinics were closed on some days or offered reduced hours.
"It may have been going on for some time," Sharfstein said. "That's a problem. We expect clinics to be open."
People's is one of 16 federally qualified health center groups that operate 136 clinics around the state, according to the Mid-Atlantic Association of Community Health Centers. There are more than 1,100 such groups nationwide, according to the National Association of Community Health Centers.
Hardly any of them ever close their doors, said Dan Hawkins, the national association's senior vice president for policy and research. Generally, around four or five a year threaten to close, but other groups are formed to run the clinics or existing groups step in. Occasionally, patients are sent to other centers.
"The demise of a health center organization is an exceedingly rare event," he said. "Complete closure is even more so. I don't know about People's specifically, but I'd be surprised to hear there was no continuation of services."
He said it's in the interest of the government and the community to keep the centers open because there are few other resources for patients who are typically low-income. About 80 percent don't have insurance or have Medicaid and would otherwise go to the local emergency department, where care is expensive and the costs are passed on to taxpayers directly — or, in Maryland, as higher hospital rates.
The Affordable Care Act provided $11 billion to offset the cost, though some of that money has already been cut. Federal grants now make up about 17 percent of the centers' budgets. Medicaid dollars make up about 29 percent and the rest comes from state, local and private money, as well as some other federal programs for those with HIV and or children, according to Leighton Ku, a professor of health policy at George Washington University who has been studying the impact of health reform on the centers.
He said the federal money runs out next year, and that could put more centers in peril. But funding is available now, making it "a little surprising" that centers were having trouble accessing grants.
"That doesn't mean all centers don't struggle," Ku said, while noting that he was not familiar with People's problems. "Every year they increase size and capacity. They need more space and more staff, and there's a shortage of primary care physicians. … They've had to learn about electronic medical records and other standards. So there are challenges, but they've done pretty well."
Baltimore City and Anne Arundel County officials say they're working to identify new health care providers for People's patients.
Other clinics in Baltimore are willing to take over the People's sites or see their patients, said Tracy Douglas-Wheeler, chief operating officer of the Mid-Atlantic Association of Health Centers.
"All of the other federally qualified health centers in the city are willing and able to do whatever it takes to handle and manage any individual who needs primary health care and impacted by the People's closure," she said. "For now, People's is directing patients to the other clinics."
Among those who must look for a new provider is Sadia Amjad of Glen Burnie, a Medicaid recipient who is expecting her first baby next month. At a checkup Wednesday at the Brooklyn Park clinic, she learned of its impending closure.
Her doctor promised that by next week, she'll have a referral to a new physician. Amjad hopes so, but she said she likes her doctor and will miss her.
"I'm a little worried about it, because she's good," she said.
Baltimore Sun reporter Nayana Davis contributed to this article.
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