Community health centers in the United States are facing a funding crisis as a government shutdown looms due to stalled congressional funding packages. With the September 30 deadline approaching, community health centers are grappling with uncertainty about their financial stability and the ability to provide care to 31.5 million patients. These centers primarily rely on federal grants, which have been depleted for the upcoming fiscal year, making long-term planning difficult. Bipartisan legislation offers a glimmer of hope, but questions about funding sources persist. Community health centers, vital for the vulnerable, remain in limbo as Congress deliberates the funding dilemma.
The looming September 30 deadline for government funding is putting immense pressure on community health centers, whose financial stability hangs in the balance.
In Congress, funding packages are continually stalling, increasing the likelihood of a government shutdown and leaving community health centers across the nation in a precarious position.
As of the current publishing time, the United States still lacks a funding solution for government-funded programs, including Community Health Centers (CHCs), for the upcoming fiscal year, or even the next few months if temporary funding measures are enacted.
While some federal healthcare programs have contingency plans in place, such as the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS), community health centers find themselves in a unique predicament. According to the National Association of Community Health Centers (NACHC), these centers are facing an uncertain staffing crisis that could severely impact their ability to provide care to the nearly 31.5 million patients they serve nationwide.
The issue stems from the fact that funding legislation for community health centers directly affects the federal dollars allocated to support CHCs and other critical federal programs like the National Health Services Corps (NHSC) and the Teaching Health Centers Graduate Medical Education (THCGME) program.
NACHC’s president and CEO, Kyu Rhee, MD, MPP, expressed deep concern about the potential government shutdown’s impact, saying, “I am staying up at night worrying about the stability of our primary care workforce. This debate over health center funding comes as clinicians are considering what residency they should go on, what training program, or whether or not they should sign a contract at a Community Health Center. That is why it makes sense to invest in health centers and in primary care development programs to grow the current workforce of 285,000 health center professionals.”
With little hope of legislative resolution in sight, community health centers across the country are now forced to consider the potential consequences and explore strategies to ensure uninterrupted access to patient care.
Understanding Community Health Center Funding:
Community health centers derive revenue from various sources, much like other healthcare organizations. They receive reimbursements from public payers such as Medicare and Medicaid, as well as private insurance companies.
However, what sets them apart is their reliance on federal grant funding, which represents the majority of their financial support. The primary source of federal funding is the Health Center Program, authorized in Section 330 of the Public Health Services Act. This program provides annual discretionary funding, accounting for approximately 30% of CHC federal funding.
Additionally, they receive funding from the Health Resources and Services Administration (HRSA), a part of HHS, through the Community Health Center Fund (CHCF). CHCF contributes roughly 70% of federal funding for health centers and is typically renewed on a bipartisan basis every three years. However, with the most recent CHCF funding approved in FY2020, the fund is now depleted for FY2024, making it central to the ongoing funding debate.
What’s at Stake?
If Congress fails to pass a spending bill by September 30, NACHC warns that the most immediate consequence will be the impact on health centers’ ability to recruit and serve patients.
Funding uncertainties hinder health centers’ capacity to retain and attract staff, including medical residents. While there is some funding available to tide over health centers until November 2023, it falls short of providing the stability needed to plan services for the 31.5 million patients they serve.
This funding crisis doesn’t only affect health centers’ finances; it also directly affects patients. NACHC estimated that nearly 7 million patients would lose access to care if Congress failed to pass a spending bill, underscoring the critical role these centers play in providing healthcare.
Community health centers serve around 31.5 million individuals at 15,000 different locations, making them a lifeline for those who are socially vulnerable. A significant portion of their patients is uninsured (19%), covered by public insurance (61% with Medicare, Medicaid, or CHIP), rural residents (41%), and members of racial and ethnic minority groups (64%). Importantly, 90% of community health center patients fall into the low-income category.
Overall, community health centers are the primary healthcare providers for one in five uninsured individuals, one in three people living in poverty, one in seven rural residents, 1.4 million people experiencing homelessness, 8.8 million children, 400,000 veterans, and 3.5 million patients over the age of 65.
Paloma Izquierdo-Hernandez, MS, MPH, NACHC Board Chair, and President & CEO of Urban Health Plan, Inc., emphasized the urgency of the situation, stating, “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. Underinvestment in the only safety net our patients can count on would undoubtedly cause further devastation to those who are most vulnerable.”
Historically, community health centers have received bipartisan support, and while funding often passes with last-minute efforts from Congress, this time, CHC funding is entangled with other government program funding, causing further delays.
The Hope of the HELP Committee Bill:
NACHC has highlighted one glimmer of hope in the form of 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 aims to increase CHC funding to $5.8 billion per year for the next three years, provide capital for CHCs to expand dental and mental healthcare, increase NHSC funding, raise THCGME funding, and authorize a Workforce Innovation Fund.
NACHC praised the legislation, but it faced challenges due to concerns about funding sources that could impact patient care access in other healthcare settings.
Looking Ahead:
As of the current publishing date, community health centers find themselves in a state of uncertainty as Congress deliberates its options for extending government funding.
NACHC is actively communicating with its member health centers to formulate individual contingency plans, recognizing that these plans may vary depending on factors such as patient-run advisory boards.
