The applications poured in, spurred by millions of dollars in new funding included in the health law to expand primary care to the poor. A record 810 groups sought federal grants to staff and equip hundreds of new and existing community health centers.
But in August, most were rejected, leaving advocates frustrated that they would not be able to serve the growing numbers of uninsured and poor people or be ready for an influx of patients under the health law.
Rather than handing out $250 million to establish new patient-care sites to serve more than 2 million additional people, as originally expected, the Obama administration gave $29 million to 67 nonprofit organizations that will serve an additional 286,000 patients.
The funding cut was a result of a federal budget compromise in March to keep the government running. That agreement reduced federal spending by nearly $80 billion, including a $600 million trim in funding for ongoing operations at existing health centers.
To make sure existing centers did not have to reduce services, the Obama administration diverted some of the $11 billion set aside in the health overhaul law for health-center expansion initiatives and instead used it to keep the centers operating at current levels.
But a casualty of this strategy was that some of the health-center expansion plans were either eliminated or drastically cut back.
In addition, to free up money to help with existing operations, the administration scrapped plans to distribute $335 million to health centers to boost medical, dental, pharmacy and vision services.
Advocates are concerned that Congress could again target operating funds and say the funding delay will slow efforts to build capacity by 2014, when the health law begins expanding coverage to 32 million uninsured people. “Now the whole process has been set back,” said Dan Hawkins, senior vice president at the National Association of Community Health Centers.
The situation highlights the trickle-down effect of Washington’s deficit cutting on local communities. Those efforts are being revved up this fall as the congressional “super committee” looks for ways to cut the federal budget by more than $1.2 trillion in the next decade.
At the local level, the lack of funding means:
●A dental exam room at FoundCare Health Center in West Palm Beach, Fla., will remain unused four days a week because there’s no money to hire a dentist.
● Triad Adult and Pediatric Medicine in Greensboro, N.C., might face a repeat of last winter when more than 700 adult patients were put on a months-long waiting list for care, and the center had to stop taking new pediatric patients because of a lack of doctors.
● Heartland Community Health Center in Lawrence, Kan., will have to continue to tell patients they must wait at least two months for an appointment.
“When the money first became available, a lot of community organizations said, here’s a golden opportunity, let’s try to take advantage,” said Heartland chief executive Jon Stewart. “But like many others, we were shocked not to be awarded a grant.”
Heartland and the more than 700 community health centers that were turned down lost more than a one-time grant. The grant would have also allowed them to as much as triple their Medicaid reimbursement and qualify for operating funds in future years.
Health center officials are concerned the cuts in expansion funding could happen again as Congress moves to hold down federal spending and lower the federal deficit. Hawkins said many of the health centers that were turned down remain skeptical about the possibility of getting future dollars to expand.
“We are now one year closer to 2014, when all the new coverage expansion kicks in,” Hawkins said. “But where are those people going to go to get care? We need to make sure they have a place to go.”
The House Appropriations Committee released a draft 2012 appropriations bill Monday that would maintain existing services at the health centers but rescind $1.2 billion in expansion funding called for under the health law.
Sen. Ron Wyden (D-Ore.) is also worried about the effect of scaling back expansion plans. “I believe (community health centers) provide an incredibly important service to patients in my state and across the country, and they need to be funded now if we expect them to provide a continuum of care when the health-care law is fully implemented in 2014,” he said.
The Health Resources and Services Administration, the federal agency that oversees community health centers, said future expansion plans remain tentative because of concerns that Congress might again cut annual funding for health centers.
Expanding funding for community health centers in the past decade has been one of the few health policy areas Republicans and Democrats agreed on. President George Bush’s administration doubled funding for community health centers, enabling the creation or expansion of 1,297 clinics.
Serving nearly 20 million people today, community health centers are often the main primary care safety net for the uninsured and people on Medicaid. Unlike private physician offices and urgent-care clinics, the centers accept patients regardless of their ability to pay.
The Obama administration says the centers will play a key role in making sure those who gain coverage from the law will have a place to get care.
That’s why the health law included the $11 billion for the centers to be spent by 2015, mostly to open new sites and expand services at existing locations.
It’s been nearly three years since FoundCare in West Palm Beach opened its doors in a county where nearly one in three people are uninsured. The facility won a $190,000 federal grant a year ago to equip its exam rooms.
But officials had hoped to get an expansion grant to hire another family physician and a dentist and to add optometry and behavioral health services. Right now less than half of the facility’s 16 exam rooms are used.
“We thought we did everything that could have been done,” said FoundCare chief executive Yolette Bonnet. “We can do so much more, but because of what’s going on with funding, we are not able to.”
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health-policy research and communication organization not affiliated with Kaiser Permanente.