Health Center Federal Policy, Uncategorized

FY2011 Appropriations Reaches Conclusion; Health Centers Slated for $600 Million Cut

By: Anne Morris

As we reported last week, House Speaker Boehner, Senate Majority Leader Reid, and President Obama reached agreement on a spending bill for the remaining six months of the fiscal year that cuts $38.5 billion in spending relative to the FY2010-enacted level. You may have already seen NACHC’s statement on the impact of the year-long Continuing Resolution, H.R. 1473, on health centers.

Summary documents from the House Appropriations Committee Majority indicate that H.R. 1473 would reduce discretionary funding for health centers by $600 million relative to the FY2010-enacted level of $2.19 billion.  Because the bill is in the form of a Continuing Resolution, the Senate Appropriations Committee Majority has noted that in general it sets funding at the agency level, leaving some discretion over funding levels for many individual programs. However, the House Appropriations Committee document provides insight into the funding level for the Health Centers program and the proposed $600 million reduction.  H.R. 1473 requires the Department of Health and Human Services (HHS) and other departments to provide a spending or operating plan within 30 days of the legislation becoming law.

Based on the $600 million cut to the Health Centers Program as outlined by the House Appropriations Committee, together with the $1.0 billion in FY2011 funding available for health centers through the Community Health Center (CHC) Fund from the Affordable Care Act (ACA), health centers would have a net increase of approximately $400 million in funding for FY2011. Unfortunately, most of this increase is needed to continue ongoing operations – specifically to build the ARRA New Access Points (NAP) and Increased Demand for Services (IDS) activities into the Health Centers program’s base operations.

While key policy decisions remain to be made by the Health Resources and Services Administration (HRSA), this proposal should provide sufficient funding to continue existing health center operations and services, including the 127 new centers and 3.7 million new patients added in the past two years through ARRA. However, H.R. 1473 leaves very limited funding to support expansion efforts as compared to approximately $700 million for growth if CHC Fund dollars hadn’t been used to backfill the cut on the discretionary side.

As you’ll recall, HRSA previously announced several FY2011 funding opportunities, including $250 million for NAPs, $270-$335 million for expanded services (ES), and $10 million for planning grant awards.  At least 800 health centers submitted NAP applications, and virtually every health center nationwide applied for ES funding.  H.R. 1473 leaves HRSA unable to fund all of these new opportunities; instead, the agency will have to make difficult choices about the few new awards to make.

Because H.R. 1473 relies on the vast majority of the FY2011 CHC Fund investment to backfill the discretionary cut – rather than promote expanded health center capacity:

-The ability for health centers to double their capacity and reach 20 million new patients by 2015 is undermined;

-Health centers will lose the ability to expand to serve 5 million patients over the next year; and

-$6.9 billion in annual cost savings to the health care system will be forgone.

NACHC opposes this legislation because of the short and long-term impacts of this discretionary cut.  However, H.R. 1473 passed both the House and Senate on Thursday and was signed into law on Friday.

3 Comments on “FY2011 Appropriations Reaches Conclusion; Health Centers Slated for $600 Million Cut

  1. I am CFO at Kenosha CHC in Wisconsin. The CHC business model was designed to expand, and recently significant sums of money were invested in expansion: CIP, IDS, FIP, and CD. At KCHC, we were fortunate to receive a CD grant to add 25 dental operatories. With CIP, we add 5 to 15 making 20, and soon we’ll have 45. We added medical and behavioral health capacity. We are adding another medical site through a CIS application. We have a NAP in the works for neighboring Racine which has bigger issues than Kenosha. What I hear little discussion about is that when a CHC expands its capacity in this way, growth in utilization by the uninsured mirrors this. In the past three years, we quadrupled capacity and utilization. With a 25% uninsured payer mix, we suddenly found ourselves with a ratio of uncompensated care to federal grant dollars of 2:1. We realized that put us in jeopardy of losing hundreds of thousands of dollars for FY 2011 even before our go live date on the two major expansions I just mentioned. We further realized that without additional base funding, we would have to limit access for the uninsured. We started this process several months ago reducing the percentage of uninsured access from 25% to 15%. We did this to remain sustainable. We budgeted the promized ES dollars for FY 2012, and now we have to find a way to balance our budget with the loss of these dollars. It is imperative that there be a consequence to Congress and the President agreeing to cut these funds. That consequence is restriction of services to the uninsured giving that population the alternative of getting no access to care or getting it in emergency rooms. No matter what one’s politics are, it makes no sense to remove the most economical way to take care of a population and substitute the most expensive. It is imperative that both federal and state governments INCREASE CHC funding if the goal is to save money. It is up to CHCs not only to advocate for this but to demonstrate the negative consequences of cutting our budgets.

  2. Why not eliminate the 3rd-party middlemen (health insurance companies and other special interest groups) that mark-up every medical expense they pay out by 40 to 50% for profit and overhead? The soaring costs of health care insurance, prescription medications, hospital stays, etc. have not only outstripped society’s ability to pay; they have now outstripped the U.S. Governments ability to pay.

  3. I am the CEO of NorthShore Health Centers and am really ashamed of the US House and Senate. Politics has caused more costs to the very systems that the government is trying to cut.
    Everyone knows that Medicaid and Medicare and other social service programs need to be reduced, but waste is the biggest problem. Hospitals charge $15 for a Tylenol, and Emergency rooms are used because physicians cannot afford or refuse to accept the payments they get to see the Medicaid population, and are even getting to the point they will not see any new Medicare patients. There are no physicians who provide health care to the uninsured.
    In Northwest Indiana, the Medicaid,Medicare, and uninsured patients are provided health care through the Federally Qualified Community Health Centers. These programs not only provide the most comprehensive health care to these populations, they also help to educate patients on the need for a medical home and discourage the use of the Emergency Departments (ED) for routine medical problems.
    Yet, these are the very programs that have been cut. This cut means fewer uninsured will be provided health care, there will be fewer staff to provide care on an instant basis, which will increase the use of the ED and the costs for all insured and uninsured alike, increses ten fold. When will the government realize that they need to fund these centers according to numbers of patients served, and not just fund on a House members whim, or political demand, and they need to save money, not play politics. The waste in the the spending and the redundancy in programs is ridiculous. Family Planning (title X) money should not be put in a location of a community health center, that provides the same services, but should be spent in a location where the family planning services are not available. These are the kinds of savings that make sense. When will the government stop cutting off its nose to spit its face. I am disgusted with the system and the sellout.

Comments are closed.