Community health centers hoping for funding extension during lame-duck session

Community health centers face a funding cliff at the end of this fiscal year. More than 1,200 facilities nationwide are receiving $3.5 billion in funding this year that was included in the Patient Protection and Affordable Care Act. That's roughly 70% of the federal funding available to the centers that focus on treating low-income patients.

But this is the last year that funds are appropriated for the fund unless Congress takes action to extend it. Last month, a majority of legislators in the House and Senate signed off on letters to legislative leaders calling for an extension of the fund. The House letter was signed by 250 members, while the Senate letter carried 66 signatures. The letters make no mention of the ACA, not surprising given its continuing political toxicity, and don't specify a dollar amount.

“The reductions could result in the closure of health center sites, layoffs of providers and staff, and most importantly, a loss of access to primary and preventive care for millions of patients who often have no other place to turn,” reads the letter to House Speaker John Boehner.

Dan Hawkins, policy director for the National Association of Community Health Centers, said they want to be in position to push for an extension of the funding during a lame-duck session after Election Day. Other healthcare related items that could also be on the agenda at that time: a permanent fix of Medicare's sustainable growth-rate formula for paying doctors and an extension of funding for the Children's Health Insurance Program, which also expires at the end of this fiscal year next September.

“These are all great big dreams and plans,” Hawkins acknowledged. “They can all fall apart pretty quickly.”

Hawkins points to several factors that justify extending the life of the fund. Roughly half the states have failed to expand Medicaid to individuals with incomes up to 138% of the federal poverty threshold, as provided for under the ACA. That means community health centers in those states aren't seeing a significant reduction in charity care for poor households.

In addition, community health centers are encountering many individuals who purchased bronze plans through the exchanges because they were cheaper. But they therefore don't have access to cost-sharing subsidies and often have very high deductibles. That means health centers still aren't receiving adequate payments for treating those individuals, he said.

Further stressing budgets is the fact that the standard annual appropriation for community health centers has been reduced by $700 million, or roughly a third, since 2010.

“There's not a health center I've talked to that doesn't say they're struggling to handle the patient volume that's coming in their doors,” Hawkins said.

Community health centers fear that it will become harder to secure loans or hire staff if the funding uncertainty lingers. Federal funds make up roughly 20% of the typical budget for the not-for-profit groups.

Opinions differ on how much appetite for tackling difficult healthcare issues Congress will have in a lame-duck session. Most political observers believe there might be more of a chance for movement on those issues if Democrats retain control of the Senate. Otherwise, the thinking goes, Republicans will be preoccupied with preparing to take power and organizing their agenda for 2015.

But Hawkins doesn't think that's necessarily true. “I think they'll want to clear out a whole lot of stuff so they can focus on their priorities come January,” he said.

Follow Paul Demko on Twitter: @MHpdemko