Community Health Centers Hunker Down as Government Shutdown Looms

Exploring community health center funding

Community health centers produce revenue from a few different places. Like other healthcare organizations, CHCs get reimbursement from public payers like Medicare and Medicaid, plus other private insurance companies.

But they are unique in that they also receive federal grant money, which represents the bulk of CHC funding. The primary form of federal funding is the Health Center Program, which is authorized in Section 330 of the Public Health Services Act. This is annual discretionary funding and accounts for around 30 percent of CHC federal funding.

They also receive funding from the Health Resources and Services Administration (HRSA), which falls under HHS, by way of the Community Health Center Fund (CHCF). CHCF provides around 70 percent of federal funding for health centers and is usually passed on a bipartisan basis every three years.

With the most recent batch of CHCF funding being passed in FY2020, this leaves the fund empty for FY2024 and places it at the center of this most current funding debate.

What’s at stake?

If the government can’t pass a spending bill by September 30, NACHC said the most pressing consequence is health centers’ ability to recruit staff and serve patients.

For one thing, funding is in flux. That impacts health centers’ ability to retain staff, as well as attract new staff, including medical residents. As noted above, the funding cliff also impacts programs that funnel providers to community health centers.

There is some contingency in place, a spokesperson from NACHC said. There is some funding that will last through November 2023 that can insulate health centers a bit, but “that’s no way to plan services for 31.5 million people,” Amy Simmons Farber, NACHC spokesperson, said over email. “Health centers need long-term and sustainable funding to meet the growing demand for affordable primary care among Americans.”

This isn’t just about health centers getting their money; there are patients who will be impacted should funding lapse. In July 2023, NACHC estimated that almost 7 million patients would lose access to care if Congress can’t pass a spending bill.

Right now, CHCs offer care to around 31.5 million people at 15,000 different locations. That rounds out to 1 in 11 people who visit a community health center, per NACHC figures.

These patients typically are among the most socially vulnerable. One in five (19 percent) of the people getting care at a CHC are uninsured, while 61 percent have public insurance like Medicare, Medicaid, or CHIP. Another 41 percent are rural residents, and 64 percent are members of racial and/or ethnic minority groups.

Notably, a sizeable 90 percent of community health center patients are low-income, the report noted.

All said, community health centers are the primary healthcare provider for one in five uninsured people, one in three people living in poverty, and one in seven rural residents. They administer healthcare for 1.4 million people experiencing homelessness, 8.8 million children, 400,000 veterans, and 3.5 million patients over age 65.

“Today’s federal spending debate comes at a dire moment as Health Centers and the record 31.5 million people we care for continue to recover from the damage left in the wake of COVID,” Paloma Izquierdo-Hernandez, MS, MPH, NACHC Board Chair, and President & CEO of Urban Health Plan, Inc., (UHP), in the Bronx, Queens, and Central Harlem, NY, said in that September 18 press conference about CHC funding. “Underinvestment in the only safety-net our patients can count on would undoubtedly cause further devastation to those who are most vulnerable.”

Izquierdo-Hernandez pointed out that the value of CHCs has historically been reflected in the bipartisan support they’ve received. While Congress has often come in under the wire in passing CHC funding, it does often get done in a bipartisan manner.

But in this go-around, CHC funding is mired in funding for other government programs, stalling passage.

What about the HELP Committee bill?

NACHC has noted one glimmer of hope this month: a bipartisan primary care bill introduced by Senators Bernie Sanders, chair of the Health, Education, Labor, and Pensions (HELP) committee, and Roger Marshall, MD, ranking member of the Subcommittee on Primary Health and Retirement Security.

The Bipartisan Primary Care and Health Workforce Act would increase CHC funding to $5.8 billion per year for the next three year, provide capital for CHCs to expand dental and mental healthcare, increase the NHSC funding, increase THCGME funding, and authorize a Workforce Innovation Fund.

NACHC lauded the legislation, but the bill didn’t go far due to questions about funding sources that might impact patient care access in other healthcare settings.

What’s on the horizon?

As of publishing, community health centers are at somewhat of a standstill as Congress continues to mull over its options for extending government funding.

Until then, NACHC said it is communicating with its member health centers about their individual contingency planning, which could differ depending on factors like patient-run advisory boards.