Health Care Center in Rural Indiana Expands Services with CDFI Financing
Client: Tulip Tree Family Health Care
Client Location: Fort Branch, IN
CDFI: IFF
CDFI Service Area: Midwest
Financing and technical assistance
Tulip Tree Family Health Care, a health care center based in Fort Branch, Indiana, strives to fill the gap between the care people need to stay healthy and the care they can pay for–to the benefit of everyone in the region.
The region is mainly rural, and resources can be scarce; Fort Branch, for example, does not have a grocery store. Many patients travel 20 miles or more to visit Tulip Tree. Plus, the center offers three types of care at a single site: primary medical care, dental care, and behavioral health care.
Nevertheless, no matter how well-managed and vital a center like Tulip Tree may be to the region, sustaining the services it provides can be a daunting challenge. Medicaid rarely covers the full cost of a patient’s visit. For example, the government may pay a provider $100 for a $140 visit. That’s why private medical providers take only a limited number of Medicaid patients–and why some health care centers must supplement reimbursements with other sources of revenue, such as grants and donations.
That can be especially tricky for smaller centers like Tulip Tree, which has limited capacity for fundraising and grant administration.
Tulip Tree has historically pieced together funding from a state grant, community members, foundations, and local employers. But given the low-income population it serves and the high-quality care it provides, the center’s leadership decided in 2018 to pursue another option: Become a Federally Qualified Health Center (FQHC). Doing so would allow the center to shore up its business model and live its mission on a larger scale.
An FQHC designation means, however, that a center must meet 19 strict requirements in order to receive enhanced government reimbursements and grants. The first step for Tulip Tree was to become what is known as an “FQHC Look-Alike.” Look-Alikes are well-positioned to eventually transition into full-blown FQHCs, but they do not receive federal grants to cover patients who are uninsured and the process can be relatively costly and lengthy since it involves facility upgrades and increasing staff.
Enter IFF, which specializes in helping nonprofits take calculated risks that bring opportunities to strengthen communities. IFF provided a $350,000 loan to refinance an existing line of credit Tulip Tree held on its building. That enabled the health center to recapitalize cash that had been used to make building improvements and purchases (e.g., furniture, fixtures, equipment), leading up to its Look-Alike application and inspections.
“IFF sustained us through the application process,” Allison Williams, Executive Director of Tulip Tree Family Health Care said. “We were in a financial crunch–which is common given the nature of what we do and our size–and IFF totally understood that. They processed the loan very quickly and were very helpful along the way.”
That extra boost contributed to Tulip Tree receiving its Look-Alike designation in July 2018 and becoming an FQHC in September 2019.
In 2018, the small but highly productive center served 2,988 individuals from 33 zip codes spanning Southern Indiana and Illinois. Nearly 80 percent of those patients qualified to receive Medicaid and/or Medicare.