Community health centers left in limbo as funding deadline looms

The financial uncertainty that often comes with working in healthcare is nothing new to Joan Quigley, a 30-year veteran hospital administrator who is currently president and CEO of North Hudson Community Action Corp., one of New Jersey's largest networks of federally qualified health centers.

Yet as Quigley and her colleagues at other federally qualified health centers wait for Congress to re-authorize the Community Health Center Fund, which accounts for nearly 20% of the facilities' revenue, there's an unease that she can't shake.

In 2015, Congress voted to re-authorize the CHC fund just months before it expired.

This year the funding expires on Sept. 30, and there's hardly been mention of it despite the program previously enjoying bipartisan support.

"I don't think Congress is out to get us, I think they just forgot about us," Quigley said. "We just kind of took it for granted that they love us, so they'll fund us. Then all of a sudden we realized that that might not happen."

Garnering the most attention in D.C. has been the Republican effort to repeal and replace the Affordable Care Act. That also has a deadline at the end of this month. Congress only has a few weeks to pass a bill with just 50 votes, thus bypassing a Democratic filibuster.

That's left federally qualified health centers more than nervous.

"The level of anxiety rises with each passing day," said Dan Hawkins, senior vice president for public policy and research at the National Association of Community Health Centers.

In the past, providers simply had to make the case that as providers to some of the poorest and more vulnerable communities, they were essential. Now, CHC providers can't even get a moment with lawmakers before their time runs out.

About $3 million of North Hudson's annual budget of $32 million comes from the federal grant funding program, Quigley said. The loss of that revenue would likely result in North Hudson cutting hours or operations.

The CHC Fund has been the catalyst behind a rapid expansion by community health centers over the past few years. Between 2010 and 2016, money from the fund has helped increase the number of health centers throughout the country by 22%, expand the number of health center sites by 50%, and increase the number of patients served by nearly 30%, from 19.5 million to more than 25 million, according to a report released this week by researchers at George Washington University. Currently there are more than 1,300 federally funded health centers operating more than 10,000 sites across the U.S.

The report found allowing the CHC Fund to expire would amount to a cut of $3.6 billion in health center funding in fiscal 2018. Such a decrease would result in the loss of 51,000 health center jobs, and as many as 9 million patients—or more than one-third of the current population who use community health centers—would lose access to such services.

Report co-author Sara Rosenbaum, founding chairwoman of the health policy department at George Washington University's Milken Institute School of Public Health, said community health centers are more dependent on federal funding to offset their costs because they serve a disproportionate number of low-income and medically underserved patients who are unable to pay out-of-pocket expenses like those who visit a physician's private practice.

"When you look at a standard physician's practice, a big chunk of their revenue is actually out-of-pocket payments," Rosenbaum said. Estimates indicate patient payments make up of roughly 20% of revenue at physician practices. Rosenbaum said just 4% of community health center revenue comes from payments by patients. "That piece is completely missing in the world of community health centers."

Even as the insured rate has climbed with the aid of subsidies for private health plans and the expansion of Medicaid through the ACA, nearly a quarter of community health center patients still are uninsured, compared to 9% of the general population, according to research by the Kaiser Family Foundation.

Rosenbaum and others felt an elimination of the CHC Fund—combined with the loss of the Medicaid expansion and ACA marketplace subsidies if the latest GOP health bill is enacted—would have catastrophic consequences for health centers. Nearly half of community health center patients are covered by Medicaid. The program made up 43% of the more than $23 billion in revenue that health centers generated in 2016.

"If health centers experienced instead of a 15 percentage point drop in their funding, basically half their funding, they would close their doors," Rosenbaum said.

Even the loss of the CHC Fund alone would mark a major funding blow for many community health centers, especially among those providers in non-Medicaid expansion states. Many health centers in states where Medicaid was expanded to cover all adults earning up to 138% of the federal poverty level have used money from the CHC Fund to branch out with either new site locations or services, such as dental and heart clinics.

But health centers in non-expansion states have been more reliant on the CHC Fund just to maintain their daily operations.

"We're evaluating whether we're going to have to cut operations or what we're going to have to cut because we will have to cut something somewhere," said Katy Caldwell, CEO of Houston-based Legacy Community Health, a federally qualified health center that serves a patient population of more than 100,000 in the Houston area. She said the loss of the CHC Fund would be a big enough hit to Legacy's budget that cuts solely to the organization's administrative functions would not be enough to offset them, meaning some of their clinical services would also be affected. "A lot of it (the CHC Fund) we use for our general operations to care for people who are uninsured."

Earlier this month a bill was introduced in the House to extend funding for the Community Health Center Fund for five years, but it has yet to be put on the legislative calendar for a vote. Meanwhile, many health centers are faced with hard decisions over whether to renew leases and reduce their workforce in the coming months as one of their main sources of funding remains uncertain.

Congress also must renew by Sept. 30 the Children's Health Insurance Program, which provides healthcare coverage for more than 9 million kids from low-income households who earn too much to qualify for Medicaid. CHIP's deadline coincides with another priority, the renewal of the National Flood Insurance Program, which provides flood insurance for about 5 million. Funding for the program has received more attention recently in light of the devastation left behind by massive hurricanes that hit Gulf Coast states this summer.

Nevertheless, Quigley, a former legislator herself, is optimistic that the program's bipartisan support will urge Congress to act before the deadline.

"I spent 10 of my 18 years in the New Jersey state Assembly on the budget committee, so I know how things can change in a heartbeat," Quigley said.