But they aren't as dependent now on the appropriation as they were in 1985, when 83% of a federally qualified health center's revenue came from the federal grant. Back then, Medicaid patients accounted for only 7% of a health center's funding and Medicare patients for just 1%.
By 2015, the federal grant represented just 18% of an average health center's funding compared with Medicaid at 44%. Medicare accounted for 7% and other sources, including commercial insurance, accounted for 19%, according to data from consulting firm FQHC Germane, which advises community health centers on business development, grant writing and other areas.
Steve Weinman, vice president of the firm, has worked for decades in health centers in his home state of Florida and tracked the on-the-ground story behind the statistics. As he puts it, "We started out loosey-goosey and rarely charged anything, didn't worry about anything beyond our grant funding."
That's far from the case now.
Community health centers' transition from being mostly humble clinics to big business was born out of their need to survive in an increasingly complex and expensive healthcare landscape as well as the constant demand for care, Weinman said.
Yet as hospitals have learned, competition for patients also leads to competition across service lines. Some community health centers offer the same ancillary services as local hospitals, such as imaging and lab work.
Tim Moore, president of the Mississippi Hospital Association, said he doesn't question the need for health centers to compete for patients with a payer behind them, but his members are feeling the tug.
"When hospitals, particularly small rural hospitals, are being strapped so hard for revenue, and you're trying to determine how to keep your doors open, if you lose any kind of service that brings revenue into the hospital, it's difficult, it exacerbates the problem," Moore said.
In conversations with hospital and community health officials, similar points of friction emerged nationwide.
One criticism of community health centers from physicians is the underlying federal statute, which set in place a fee-for-service Medicaid payment model.
By law, community health centers receive cost-based prospective payments even if their state uses capped payments for Medicaid. California, for example, reimburses FQHCs for the difference between the managed-care plan's payment and the federal fee-for-service rate. California manages this wraparound payment through what both state officials and providers call a burdensome reconciliation process at the end of each year.