Health centers for the balance of fiscal 2011 ending Sept. 30 already are facing a shift in their federal dollar allotment as a result of the April budget agreement. While the centers aren't receiving less money than they did in fiscal 2010, representatives of the industry view it as a cut because a healthcare reform-related expansion may now be threatened as a result of the congressional maneuvering.
A reform-linked statutory payment of $1 billion into a trust fund toward the expansion of community health centers now appears more likely to be used to mostly cover a drop in Congress' regular grant allocation for the centers. The budget agreement for fiscal 2011 included a $660 million cut to health center primary-care funding, which fell to $1.5 billion from $2.1 billion in fiscal 2010. The general idea behind the cut is that the $1 billion trust fund money under the Patient Protection and Affordable Care Act can cover the lost funds while still providing extra money to health centers.
Now, advocates for community health centers are working to prevent more cutting. “They are exceedingly determined not to lose any more money,” says Sara Rosenbaum, law professor at the George Washington University School of Public Health and Health Services, Washington.
An August report Rosenbaum coauthored from the Kaiser Commission on Medicaid and the Uninsured notes that most of the trust fund expansion money—$9.5 billion out of $11 billion total over five years—was expected to add new health center grantees and services sites, and enhance service capacity of new and existing sites. The balance was to go toward capital needs for renovation and information technology, in preparation for the added patients coming through reform expansions, according to the Kaiser report. Rosenbaum estimates 5 million patients who could have been served at the clinics under the ACA will not be as a result of the funding changes.
“They cut the discretionary program and argued that it wasn't a cut because the trust fund was there,” says Jose Camacho, executive director and general counsel for the Texas Association of Community Health Centers, Austin. That creates a problem, he says, because the trust fund money is for only five years, while the expansion of the health centers is expected to help meet the increased demand when the major elements of healthcare reform kick in Jan. 1, 2014.
“If you continue to cut that discretionary funding program, what happens? No. 1, you can't build the capacity to serve extra people,” Camacho says. “No. 2, when the trust fund goes away,” you've crippled the community health center program.
Community health centers were backed by former President George W. Bush and are considered a major component of the Affordable Care Act. During Bush's first term, HHS' Health Resources and Services Administration launched the President's Health Center Initiative in 2002, which achieved its goal of establishing new or expanded health-center sites in 1,200 communities. Funding also grew significantly under Bush to its roughly $2 billion funding levels, but the latest move by Congress is a step backward, industry officials say.
Daniel Hawkins, senior vice president with the National Association of Community Health Centers, Bethesda, Md., says the roughly 800 applications filed by community health centers for expansion won't be funded, putting the expansion on ice, and it's an open question as to what will happen in the next fiscal year.
To raise awareness of the situation among congressional leaders, the NACHC led an effort to garner signatures for a letter of support for community health centers. The letter received signatures of 110 House members from both parties and was sent to two key members of the House Appropriations Committee, Rep. Denny Rehberg (R-Mont.), chairman of the subcommittee on Labor, HHS, Education and Related Agencies, and Rep. Rosa DeLauro (D-Conn.), the panel's ranking member.
Donna Thompson, CEO of the Access Community Health Network, Chicago, which operates 58 health facilities in the metropolitan area, says her network had applied for expansion funds and has not given up hope on receiving some. “We're hoping that in the new fiscal year there will be another round” of grants, or that the first-year grant applications will be taken under consideration, Thompson says.
Meanwhile, Medicaid funding also is threatened at the federal and state levels by lack of funds. Community health center officials locally are watching the national stage for what happens with Medicaid because the repercussions of a broad funding cut would hit them directly.
“We're afraid Medicaid is a target,” says Stephanie Wiersma, president and CEO of Lorain (Ohio) County Health & Dentistry, a community health center. “It's the biggest single source of revenue for health centers.”
She says community health centers are efficient providers of care to Medicaid and uninsured patients, so maintaining appropriate funding levels is important to the country. “It's what we do and we do it well,” she says.
Congressional Republicans are pushing for a Medicaid revamp. One piece of legislation introduced this month in the Senate would implement a provision included in Republicans' House-passed budget that would move Medicaid away from its open-ended funding formula that provides a federal match for state funds with a system of fixed grants based on the number of each state's residents at or below the federal poverty level.
The legislation would keep the current funding system for dual eligible beneficiaries—those who received Medicaid and Medicare—and people with disabilities, although states could use managed care for them.
“This bill is an important first step in reforming our nation's healthcare system and fixing our broken entitlement programs,” Sen. Richard Burr (R-N.C.), one of the co-sponsors, says in a statement. “States have a proven track record of being able to adopt innovative solutions to improve patient care. By giving them more control over their own Medicaid programs, we are allowing states to innovate and better meet their needs and, most importantly, the healthcare needs of their patients,” Burr said.
Medicaid money has grown in importance for health centers and provided 37% of their $10.1 billion in revenue in 2008, which is 2.5 times their relative importance in 1985, according to the Kaiser report. The growth reflects Medicaid eligibility expansion that began in the 1980s and changes to coverage and payment by the Medicaid program for services provided by federally qualified health centers, according to the report. A similar bill, though, failed in the Senate last week.
That level of importance also is reflected in health centers' patient mix—Medicaid patients made up 35.8% of centers' 18.8 million patients in 2009, according to a policy brief by the not-for-profit Geiger Gibson/RCHN Community Health Foundation Research Collaborative, Washington, which is affiliated with George Washington University. The balance of the coverage was self-pay patients and the uninsured, 38.3%; patients with private insurance, 15.6%; Medicare, 7.5%; and other public programs, 2.8%.
Some states already are looking at ways to save money on their Medicaid commitments, causing concern among health center advocates. In Arizona, a March proposal from Gov. Jan Brewer would cut $500 million in annual spending from Medicaid, cutting benefits and reimbursement in various ways, says Tara McCollum Plese, a spokeswoman for the Arizona Association of Community Health Centers.
Reductions in coverage by Arizona's Medicaid agency—the Arizona Health Care Cost Containment System—will mean health centers will see more uninsured patients, Plese says. Every time the agency cuts benefits, “they refer them to health centers,” she says.