Health Center Federal Policy

Appropriations Update: Get Ready for House Action on Appropriations; More Details on Senate Bill

Yesterday, the House Labor, Health and Human Services (Labor-HHS) Subcommittee on Appropriations announced their intention to mark-up their Fiscal Year (FY) 2014 Labor-HHS bill this Thursday, July 25. This announcement runs somewhat counter to the conventional wisdom that the House was unlikely to mark-up a bill and that if they did so it would be after the August recess. While we do not know what the health center funding number will be in the House bill, we do know a number of things about the House bill even before its release.

Earlier this year, the House and Senate both passed their own versions a FY2014 budget. To date, they have yet to go to conference to resolve their differences. Consequently, both chambers are operating under their respective budgets with regard to their allocations for funding the 12 annual appropriations bills, which are very far apart.

The Senate Labor-HHS bill spending levels are based upon the Senate approved FY2014 budget, which assumes repeal of the sequester. The House FY2014 budget keeps sequestration in place, but allocations for defense and non-defense spending show a shift approximately $45 billion in defense program cuts over to non-defense discretionary funding. As a result, the Senate allocation for their FY2014 Labor-HHS bill is $164.23 billion while the House allocation is $121.8 bill. This means the House LHHS bill has 25.9% less funding than the Senate– $42.43 billion. This is a steep spending gap to resolve and a conference on the budget still appears to be unlikely in the near future and a grand bargain on the deficit or the repeal of sequestration is still eluding Congress.

The House markup may be difficult and many programs will be facing possible reductions. Stay tuned to NACHC.org and Health Centers on the Hill for the latest news.

More on the Senate Labor-HHS Bill

As you’ll recall, last week, the Senate Appropriations Committee approved their FY2014 Labor-HHS Appropriations spending bill by a party line vote of 16-14. The bill was approved by the Labor-HHS Appropriations Subcommittee on Tuesday.

Under the legislation, Health Centers will receive approximately $1.6 billion in discretionary funding. The Affordable Care Act (ACA) also provides $2.2 billion in mandatory funding through the Health Center Fund for FY2014. This represents a combined total FY2014 program level for health centers of approximately $3.8 billion and an increase of $700 million. The legislation passed by the Committee also ensures the full $700 million increase will be used immediately and will be fully expended by September 30, 2014.

The legislation includes legislative language stating that the $700 million increase must be used to open new health center sites and provide existing health centers with the resources to expand their capacity to provide medical, behavioral health, dental, and other services. It also provides $142 million for current health center base grant adjustments, retaining the FY2013 Outreach and Enrollment grants in the form of base grant adjustments. Additionally, the bill provides almost $95 million in funding for the Federal Tort Claims Act judgment fund.

Unfortunately, the legislation also includes the President’s request of no discretionary funding for the National Health Service Corps (NHSC). Currently, the NHSC is relying solely on funding as allocated by the ACA. This year the Corps will receive $305 million in funding, an increase of $5 million. Like the Health Center Fund, NHSC funding under the ACA will end in FY15.

The Senate Labor-HHS provisions related to Health Centers are a major victory for the health center grassroots in a difficult fiscal environment. We are incredibly thankful to the Senate Appropriations Committee for their leadership in supporting Health Center funding for FY2014. Please read the full NACHC press release on the legislation here.

While we are enthusiastic over the results of the Senate FY14 LHHS bill, it is important to note we are far from moving this legislation over the finish line. We have a long way to go before the end of the year and the prospects of completing the annual appropriations bills including the FY2014 Labor-HHS bill are further complicated by the Budget Control Act “sequester,” which still has not be repealed or replaced by Congress.

At this point it is unclear whether the Senate will attempt to move the FY2014 Labor-HHS bill through the full Senate. As of now, no action on appropriations bills, including Labor-HHS, has been scheduled.

There is no doubt that this week will be an important one as we see how the House has proceeded given their very tight Labor-HHS allocation.  We will update the blog as soon as we know more information. Stay tuned!