Health Center Federal Policy

Sequestration and Your Health Center: Each Health Center May See a Different Impact

We’ve been posting quite a bit on the impact of the upcoming sequester on the Health Centers program.  To recap, we estimate that the program will lose between $115 million and $120 million, and this will reduce our capacity to serve 900,000 patients going forward.  We put out a press release with these exact numbers and the press has been picking that up more and more.

We’ve received a lot of inquiries on how individual health centers can estimate the sequester impact on their center.  As you noticed in the last post, the percentage changes based on how many months you have left to take the cut.  The annual cut doesn’t change….only the length of time you may have to take it.

This really comes down to your specific health center’s fiscal year.  If your grant was $100 and the sequester cut that by 5%, that would be $5.  However, if your grant was renewed for December through May (6 months), you’ve already received $50 of that grant, but you still need to take the $5 cut with the grant funding you have left.

For those of you that haven’t received your grant renewals yet, you should have your entire fiscal year to take your $5 cut….but if not, if you have already received a partial year renewal, it could be a much higher percentage cut for the rest of this year.  That is why you’ve been hearing different percentages from different people and this includes the White House that sent out a fact sheet with a 9% cut rate.

It all depends on your health center’s fiscal year, and how much time you have left to take the full sequester cut. Importantly, this also means most health centers will not see an immediate loss of funds on March 2nd after sequestration. The reduction in funding is unlikely to be immediate for anyone, because of the timing of grant renewals, but if sequester goes forward, it will still occur in the near future and will have a negative impact on your health center.