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Lesson from Lee County

Health initiative funding needs oversight.


MONEY FOR HEALTH: Sen. Tracy Steele (left), who'll sponsor the bill for clinics, watches as Gov. Beebe signs new tax law.
  • MONEY FOR HEALTH: Sen. Tracy Steele (left), who'll sponsor the bill for clinics, watches as Gov. Beebe signs new tax law.

Part of the $86 million that Gov. Mike Beebe wants spent on a number of health programs would go to the state's Community Health Centers, non-profit, federally funded clinics created during the so-called War on Poverty in the 1960s. The clinics will receive $5 million for capital improvements and $10 million for budget needs in the 2010 fiscal year.

About 120,000 Arkansans are seen yearly at the 12 centers, each a separate non-profit with a board of directors from the communities they serve, and their 47 satellites. Patients are seen whether they have insurance or not — and 43 percent don't — and are charged according to a sliding scale. Ninety-three percent earn below 200 percent of poverty level; 73 percent are below the poverty level. Uncompensated care in 2006 came to $16.5 million.

Clinics in Fountain Hill, Holly Grove and DeValls Bluff have had to close. That five more would have to shut down was one of the major arguments House Speaker Robbie Wills, D-Conway, made in fighting for passage of the tobacco tax that will fund the health initiative.

But how will the state determine if the $15 million appropriation is being well spent? How will money be given out? Who will provide oversight?

The question is brought into high relief by the Lee County Cooperative Clinic in Marianna, which serves Lee and a portion of St. Francis and Phillips Counties. The clinic — the state's first CHC, founded by a VISTA worker in the 1960s — was nearly shut down by the federal agency that funds the clinics last year. The problem: Big debt and big pay to its top five employees.

On its amended 2004 return filed with the Internal Revenue Service, the non-profit reported receiving $2.6 million in government grants but ended the year with a negative asset balance of $1,006,978. Meanwhile, its highest-paid employees enjoyed what would be considered generous salaries for a non-profit agency: $273,650 to the chief executive officer, Cleola Bursey; $149,944 to the human resources manager, Alice Morganfield; $119,068 to “maintenance supervisor,” Napoleon Gillespie. A lab coordinator was paid $114,578. The clinic's medical director was paid slightly more than the “maintenance supervisor” — $124,444.

By contrast, CABUN Rural Health Center, a community health center based in Hampton, reported on its 2008 IRS form that it paid its executive director $79,441, a sum in line with other centers.

The negative balance has been on the books for years, and reflects mortgage debt on a low-income housing project the clinic started in the 1980s.

In December 2007, the Health Resources Service Administration, the federal agency that awards grants to CHCs, disapproved the clinic's annual grant application for fiscal year 2008. A spokesman for HRSA told the Times that “for the 12 months that followed that decision, HRSA provided LCCC with sufficient grant funding to continue to provide services and to close out its grant program.”

The spokesman said the decision to quit funding the clinic “was based primarily on the assessment of the Objective Review Committee that reviewed LCCC's application. The committee noted many deficiencies, most of which had also been noted in previous years' applications. Further, LCCC failed to correct the deficiencies noted in the previous application reviews.” The spokesman did not specify what the deficiencies were.

In June 2008, Bursey and Morganfield retired. A new board of directors was seated.

Last December, the clinic won a competitive regional one-year grant from HRSA. The clinic must submit monthly financial statements to support the withdrawal of grant funds.

The HRSA spokesman said there was no evidence in audits that grants were misspent.

The debt on the troubled housing complex, the Foster Collier Gordon Manor in Marianna, is on a loan from the U.S. Department of Agriculture to LCCC, as the clinic's articles of incorporation allowed, interim CEO Denise Purnell-Walker said. A regional employee of USDA said the agency is working with a management company that wants to take over the complex.

Sip Moulden, the executive director of Community Health Centers of Arkansas, a separate non-profit that provides training and start-up help to the state's CHCs, says that the Lee County clinic is back on track. She says the fact that HRSA awarded a new grant to the Lee County clinic is proof of that.

Because her office doesn't have oversight, she didn't learn until last year that the federal agency that provides grants to CHCs was in the processing of phasing out funding for the clinic.

The Lee County Cooperative Clinic, which has satellites in Hughes, Lakeview and Madison, serves 9,000 Arkansans a year; appointments number around 25,000. It was important, Moulden said, that it remain open.

Purnell-Walker said she's gone “from one end of the clinic to the other” to review pay and create a new salary scale based on educational background, experience and time employed with the clinic. She said federal auditors have approved the pay scale. “Denise has turned that place around,” Moulden said.

A nurse practitioner who has been with the clinic for seven years, Purnell-Walker's interim CEO pay will be $145,000 for the year, she said.

A new board of directors has been seated — the old one had violated its own by-laws by letting members serve past the expiration of their terms — and Moulden has traveled to Marianna to do training and board development a number of times in the past year.

Moulden noted that half the members of CHC boards are users of the health center, and that some boards need more training than others. Working with communities new to the non-profit world is one of the CHC of Arkansas's main tasks. She said Lee County's problems were an aberration. “We wrapped our arms around Lee County,” to keep it in business, Moulden said.

Unlike outposts of the state's Arkansas Health Education Centers, Moulden stressed, CHCs function as “medical homes,” keeping clinical records on their patients in the same way private health care providers do. Unlike Rural Health Centers, they are required to offer comprehensive care, including after hours care, dentistry and pediatrics. In counties without hospitals, they may be the first stop for someone in need of acute care.

The state Health Department will be in charge of allocating funds to the CHC. Director Dr. Paul Halverson said the state will contract with each of the non-profits directly, and that it is likely that the department's office of rural health will provide oversight. Halverson said that the “uniform data set” that all HRSA grantees use to report on their grant management will also be looked at by the state. “We don't want to duplicate an onerous oversight [system], but we want to make sure oversight is provided and funding is going in the directions taxpayers [expect].”

Moulden said each of the 12 centers will get $250,000 “as a base to stabilize and preserve” existing services. The CHC of Arkansas will not receive any funds, she said, but will provide technical assistance to clinics. Halverson said the department has not yet developed the contracts, but said “the idea here is to support the CHCs in particular as they expand their reach to provide care to otherwise uninsured people.”

Sen. Tracy Steele will sponsor the appropriations bill that will set forth how the money is to be disbursed to the health centers.


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