Community Health Centers Start Preparing for Another Funding Crisis

With their federal funding set to expire at the end of the month unless Congress takes action, the nation’s community health centers, which serve patients who are uninsured and low income, are facing a repeat of their 2017 funding crisis and are making contingency plans to lay off staff and reduce services.

The Kaiser Family Foundation (KFF) this week released results from the 2019 KFF/Geiger Gibson Community Health Center Survey about how health centers may respond if the worst happens.

The Community Health Center Fund (CHCF) was created through the Affordable Care Act (ACA) and accounts for most (72%) of the centers’ funding. The initial 2010 authorization lasted for 5 years and it was extended twice, in 2015 and 2018, growing from $1 billion in 2011 to $4 billion in 2019. The centers care for more than 28 million patients in medically underserved rural and urban areas, or 1 in 12 Americans.

These centers have been able to expand, offering a wide range of services, including oral health care for adults and mental health and substance use disorder services. From 2010 to 2017, the number of centers rose by 59% and total patients served by 43%; the share of health centers offering mental health and substance abuse services grew by 22% and 75%, respectively.

The CHCF funding is even more important for health centers in states that have not expanded Medicaid. The rates of the uninsured rare much higher in those states, and grant funding accounts for 26% of total health center revenue.

A report released earlier this year by The Commonwealth Fund noted the differences between centers in expansion states versus nonexpansion states. Centers in expansion states were significantly more likely than health centers in nonexpansion states to report improvements in financial stability (69% vs 41%) since the ACA and more likely to participate in value-based payment models, such as the patient-centered medical home model.

Centers have a key role in providing both behavioral and social services, along with medical services, for complex patients. Centers in expansion states are more likely to provide short-term counseling (89% vs 82%), treatment for substance use disorder (57% vs 48%), and medication-assisted treatment for opioid addiction (44% vs 25%). They are also more likely to coordinate care with social service providers in the community (58% vs 48%) and offer transportation to and from medical appointments (48% vs 39%).

During the last crisis in 2017, CHCF went without funding for 5 months. While Congress ultimately extended it for 2 years, health centers reported that they faced difficult decisions to reduce care, close service sites, and lay off staff.

This summer, before breaking for recess, bipartisan Congress members in the House and Senate advanced bills to provide funding for 4 years and 5 years, respectively. If passed into law, the bills would keep current center funding flat at $4 billion a year.

But to prepare for a possible funding reductions, the report said “a small number of health centers have limited or reduced staffing costs” and others are considering doing the same. According to the Kaiser report:

• 59% have in place or are considering adopting a hiring freeze
• 42% are considering layoffs or cutting staff hours
• 35% are considering reducing operating hours
• 26% are thinking about closing 1 or more health center sites.

In addition, a little more than half of the centers said they are thinking about tapping into reserves and canceling or delaying renovations or expansions.