User:Odeantoni/Community health centers in the United States

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Financing

Community health centers rely on a combination of Medicaid payments, grant revenues, and other private and public funding sources to fund their operations. The sources of funding for health centers have changed significantly over time. Public Health Service Act grants under Section 330 were once a prominent source of funding for CHCs. Although 330 grants remain important to the financial viability of health centers, federal reimbursement policy under Medicaid has become their largest source of revenue. In 2008, Public Health Service Act grants comprised 18.3% of all CHC revenues. The expansion of CHCs has instead been largely funded by the growth in Medicaid resulting from eligibility expansions, coverage reforms, and modified payment rules. In 1985, Medicaid patients made up 28% of all CHC patients but only 15% of CHC revenues. By 2007, the share of Medicaid patients matched their share of revenues. In the same time period, grants for the uninsured decreased from 51% to 21%. In 2008, Medicaid payments had grown to account for 37% of all CHC revenues.

In 1989, Congress created the Federally Qualified Health Center (FQHC) program, which established a preferential payment policy for health centers by requiring "cost-based" reimbursement for both Medicaid and Medicare. The policy designated FQHC services as a mandatory Medicaid service that all states must cover and reimburse on a cost-related basis, using the Medicaid prospective payment system. The aim of these payment changes was to prevent health centers from using Section 330 and other grants (intended for the uninsured) to subsidize low Medicaid payment rates. The resulting payment structure reimbursed health centers on the basis of their actual costs for providing care, not by a rate negotiated with the state Medicaid agency or set by Medicare.

Medicaid's shift to a managed care delivery system in the 1990s required CHCs to again modify their financial structure. The implementation of managed care in Medicaid was intended to curb costs while providing patients with greater freedom to choose where they access care. However, the shift had adverse financial implications on safety net providers. Health centers largely lost money in their early experiences of contracting and assuming risk for Medicaid managed care patients. Uncertainty about financial viability also lead to concerns about the ability of CHCs to continue serving the uninsured. In 1997, to protect health centers under managed care, Congress mandated that state Medicaid agencies make a "wrap-around" payment to FQHCs to cover the difference between their costs for providing care and the rates they were receiving from managed care organizations (MCOs). Since the initial shift to managed care, Medicaid has helped a wider group of patients access consistent medical care.

The economic recession in the United States continues to pose significant challenges for community health centers. In 2002, President Bush launched the Health Center Expansion Initiative, to significantly increase access to primary health care services in 1,200 communities through new or expanded health center sites. However, these funds furthered disparity between CHCs, as they primarily benefitted larger, financially stable CHCs, rather than expanding and improving care in smaller clinics. In 2008, the Health Care Safety Net Act reauthorized the health centers program for four years with the expectation of expanding the program by 50% over the time period. In 2009, the American Recovery and Reinvestment Act (ARRA) appropriated $2 billion for investment in health center expansion. By 2010, assisted by funding received through the ARRA, health centers had expanded to serve more than 18 million people. The health center program's annual federal funding grew from $1.16 billion in the 2001 fiscal year to $2.6 billion in the 2011 fiscal year. Health centers served 24,295,946 patients in 2015.

After the September 30, 2017 expiration of the Community Health Center Fund (CHCF), 2018 funding finally passed in the House of Representatives and on November 6, 2017, was referred to the Senate Finance Committee as the CHIMES act. The CHCF accounts for approximately 70% of available grant funding for CHCs, and represents approximately 20% of revenue. However, the funding from the CHCF is set to expire in 2024. In anticipation of the delay in funding for the 2018 fiscal year, CHCs froze hirings, laid off staff, reduced hours of operations, and took other actions while facing funding uncertainty. On February 9, 2018, the Bipartisan Budget Act authorized $3.8 billion for 2018, and $4 billion in 2019 for CHC funding. In addition, to address a shortage of family physicians in CHCs, the act also increased funding for HRSA's Teaching Health Centers Graduate Medical Education (THC-GME) programs, which provides residency training in community-based primary care settings, rather than hospitals. Additionally, on August 15, 2018, HRSA announced that it awarded $125 million in grants via its Quality Improvement grant program to 1,352 CHCs.

Patient numbers are growing within community health centers nationally, yet they face threats to their financial stability. Community health centers’ financial margins reduced significantly between 2021 and 2023 due to a variety of reasons. The COVID-19 crisis, low Medicaid reimbursement rates and stagnant federal funding have forced community health centers to operate on thin ice. In addition, uncertainties about timing and amount of future federal funding is unpredictable, adding another layer of stress onto physicians' backs. Currently, the Community Health Center Fund provides 70 percent of their federal funding is set to expire in 2024. The projected decline of Medicaid revenue is likely caused by Medicaid eligibility redeterminations, which have decreased the number of people covered by Medicaid. Thus, uninsured rates are increasing, which leads to community health centers providing more uncompensated care than on average.

Despite the stagnant funding, California recently passed Proposition 35, which is an immense victory for patients and can stabilize the Medi-Cal program as a "generational investment". Prop. 35 is set to designate majority of the state's Managed Care Organization Tax (MCO Tax) to raise rates for specific providers (such as doctors and certain specialists, behavioral health facilities, outpatient clinics, hospitals, ambulances and doctors-in-training to increase accessibility to healthcare). This measure will redirect the tax funds of about $2-5 billion annually exclusively into Medi-cal. Supporters of the proposition argue that tax revenue derives from health care and should be reinvested into the health care system, rather than failing to specify how this levied tax is spent.