Health Center Federal Policy, Uncategorized

The Year in Review: 2011

by NACHC Federal Affairs

Brief Overview

As we look back on 2011, a year that has seen so many twists, turns, dips, peaks, and valleys, it certainly seems like we’ll remember this as a year that could give the scariest amusement park ride a run for its money. And speaking of money, the lack thereof has been the central focus for Congress. This was a year in which we saw two appropriations cycles crammed into one legislative year, a debt crisis, a Super Committee, countless deficit reduction gangs and proposals, and those are only the main storylines.

What has all this meant for health centers? In this year-end post, we’ll recap what these various events have meant for health centers and the patients and communities we serve. But first, a few big picture takeaways from this year.

First, in this new era of austerity, no existing health centers saw a reduction in their federal grant in either of this year’s enacted appropriations bills. Indeed, while the growth of the Health Centers program envisioned under health reform was significantly scaled backed this year, overall, the program continued to grow both in FY2011 and FY2012.

Second, the Health Centers program has maintained bipartisan support, even in this increasingly polarized climate.

Third, the need for health center expansion is not going away. The demand for affordable and high quality primary care services delivered in the very communities where people live continues to grow. Over 700 communities still have applications pending for new health centers and many more are eagerly awaiting the next opportunity to apply. Virtually every existing health center has identified unmet needs in their community that could be met with additional funding.

Lastly, but perhaps most importantly, when the health center grassroots rally and are united in telling the health center story, success is possible, even in the most challenging of climates. NACHC’s Campaign for America’s Health Centers website launched this year to empower health center advocates with new resources to be successful.

2011 has been a wild ride and coming into 2012, we can expect another active year on Capitol Hill. Health Centers on the Hill will continue to be your resource for what is happening in the nation’s capital and how it impacts health centers.  But first, let’s take a look back at 2011.

Way Back at the Beginning. . .

This year has been so jam-packed that it is almost hard to remember where it all began last January. 2011 saw a new House Republican majority assume power on Capitol Hill and a Senate Democratic majority that was significantly decreased in size. In the House, there were over 80 new freshman members, many self-identified as “Tea Party Republicans,” arriving in Washington with a determination to lower spending. The House and Senate were now held by two different parties and an era of divided government had returned to Washington, DC. What followed was a year of showdowns, standoffs, and a number of bruising battles on spending and revenue as the two sides sought to enact their competing visions for the country.

FY2011 Appropriations (aka 2011 Round One) 

One of the first major pieces of legislation the new divided Washington had to tackle was the FY2011 Appropriations bills which the previous Congress had failed to resolve before it adjourned.  The two sides started miles apart. The House proposed over $100 billion in cuts as compared to President’s Obama’s budget request and over $60 billion in cuts as compared to FY2010. The Senate proposed exponentially smaller cuts. For health centers, the House proposal would have meant a $1 billion reduction in Health Center discretionary funding, and though the Affordable Care Act (ACA) Health Center Fund would have lessened the impact of this proposal, ARRA-funded New Access Points (NAPs) and Increased Demand for Services (IDS) funding were fully at risk. The Senate proposal kept health centers’ discretionary funding whole, allowing ACA’s entire FY2011 Health Center Fund to be used for both the continuation of ARRA activities and growth as envisioned in health reform.

The final FY2011 appropriations bill, negotiated as the government teetered on the brink of shutdown late last winter, included nearly $40 billion in cuts to discretionary spending. For health centers, this package included a $600 million reduction to discretionary spending.  This new discretionary funding level, together with the $1 billion in FY2011 funding available for health centers through the Community Health Center (CHC) Fund from the Affordable Care Act (ACA), meant a net increase of approximately $400 million in funding for FY2011. Most of this increase, however, was needed to continue ongoing operations. Specifically, this funding was needed to build the 127 ARRA NAPs and all IDS activities into the Health Centers program’s base operations (at a cost of $250 million), meaning continued access to care for the over 3 million new patients added through these grants. Another $55 million was needed to keep the FTCA fund solvent.

The agreement left less than $100 million to support expansion efforts, efforts we had hoped would total over $700 million. HRSA had previously announced several FY2011 funding opportunities, including $250 million for NAPs, $270-$335 million for expanded services (ES) for existing centers, and $10 million for planning grant awards. Over 800 health centers submitted NAP applications, and virtually every health center nationwide applied for ES funding. As a result of the FY2011 reduction, 67 NAPs were funded instead of the planned 350 and no ES awards were able to be funded. Planning grants were funded as planned. The new era of austerity had an immediate and sizable impact on health center expansion plans.  

The Debt Limit and Super Committee (aka 2011 Rounds Two and Three)

As you’ll remember, this year also featured an unprecedented debate on Capitol Hill about whether to raise the Federal “debt ceiling.”  The debt ceiling sets a limit on the United States’ borrowing authority and is usually raised by Congress with limited debate. This year was a marked departure from past precedent.

The debt ceiling was used as a leverage point by Congressional Republicans to force action on deficit reduction and ultimately led to the bipartisan Budget Control Act of 2011. The Budget Control Act provided the means for Congress to raise the debt ceiling but also created a select group of Senators and Representatives (known as the Super Committee) charged with finding at least $1.2 trillion in deficit reduction which then would need to be approved by Congress writ-large. If the Super Committee failed to reach its goal, a series of automatic, across-the-board spending cuts known as sequesters would go into effect to reach the $1.2 trillion target.

After numerous proposals were traded back and forth during months of work, the Super Committee ultimately was not able to reach agreement.  Republicans insisted on cuts to and restructuring of entitlement programs such as Medicaid and Medicare, and Democrats insisted on significant revenue increases in order to consider these changes. Neither side was willing or able to meet the other’s demands.

Throughout the process, the Medicaid program was one of the programs most vulnerable to potential cuts thanks to the fact that it was exempted from any automatic across-the-board cuts (as would a number of other programs meant to benefit low-income individuals and families).  Accordingly, NACHC was very concerned about significant cuts to Medicaid writ-large or changes that could undermine the health center Medicaid prospective payment system (PPS).  NACHC engaged with our Partnership for Medicaid to push back on large-scale changes or cuts to Medicaid, including a Capitol Hill strategy as well as print and radio ads. In addition, NACHC mounted a large advocacy campaign to make sure that Members of Congress—particularly those on the Super Committee— were familiar with the PPS and why it is so important to health centers’ very viability. 

While the Super Committee ultimately failed to reach consensus, many documents were leaked throughout the process and based on those documents and other reports, we do not believe health centers were targeted in any of the draft proposals. Without all of the significant grassroots efforts with Senators and Members of Congress throughout the process, there might have been a very different outcome.  As we look to the coming year, we don’t expect that these broader deficit reduction issues will go away; many Members of Congress vehemently object to the across-the-board cuts that are now slated to go into effect in 2013, so we expect to see additional deficit reduction discussions arise in the context of altering these cuts.

FY2012 Appropriations (aka 2011 Round Four)

After Congress finally completed the bruising and nail-biting FY2011 Appropriations process, it was hard to believe there was still a whole year’s worth of appropriations work to do, but do it they did.

For health centers, NACHC put forward a FY2012 ask that sought to restore $200 million of our base appropriation that had been cut in FY2011, but also to ensure that the ACA Health Center Fund be left intact. With the Health Center Fund’s $1.2 billion for FY2012, this would lead to an overall FY2012 increase of $400 million.

The process started out on a positive note with bipartisan letters in both the House and Senate supporting health center funding, a rarity in this climate. In the House, Reps. Gus Bilirakis (R-FL) and Frank Pallone (D-NJ) led the effort and in the Senate, Senators Debbie Stabenow (D-MI) and John Boozman (R-AR) authored the health center support letter.

As the process continued, the House and Senate both forward bills that protected all existing health centers from reductions, though they got there in very different ways. The Senate acted first, with Labor-HHS Appropriations Subcommittee Chairman Tom Harkin (D-IA) introducing a bill that would have kept health center discretionary funding level, while also protecting the Health Center Fund; the result was a total program level of $2.8 billion, an increase of $200 million. That bill passed the Labor-HHS Subcommittee and the Full Appropriations Committee but not the full Senate. House Labor-HHS Subcommittee Chairman Denny Rehberg went next, posting a draft Labor-HHS bill online which would have provided health centers with a $995 million discretionary increase while eliminating the ACA Health Center Fund FY2012 allocation. The result would have been a restoration of the FY2011 base cut, but a total program level of $2.6 billion or level program funding.  That bill did not move any further due to the concerns of some on the committee that it did not cut enough overall.

The final bipartisan FY2012 conference report was released in December. After months of Hill and grassroots advocacy, the final bill mirrored the Senate proposal and provided the Health Centers program with nearly $2.8 billion, meaning a $200 million increase. This was a tremendous outcome, particularly in this period of fiscal austerity. The conference report left HRSA with the flexibility to decide on the distribution of the program increase. NACHC expects to see what HRSA’s plans are for this funding in the coming months.  

Conclusion

All in all, after a wild ride, health centers ended up the year on very positive note. As we turn the page to 2012, and what promises to be another interesting year (see our blog on the year ahead here), we can say for sure that 2011 is a year we won’t soon forget.