LegiStorm

Summary:

The federal health center program is authorized in Section 330 of the Public Health Service Act (42 U.S.C. §§201 et. seq.) and administered by the Health Resources and Services Administration (HRSA) within the Department of Health and Human Services. It awards grants to support outpatient primary care facilities that provide care to primarily low-income individuals or individuals located in areas with few health care providers. Federal health centers are required to provide health care to all individuals regardless of their ability to pay and are required to be located in geographic areas with few health care providers. These requirements make health centers part of the health safety net—providers that serve the uninsured, the underserved, or those enrolled in Medicaid. Data compiled by HRSA demonstrate that health centers serve the intended safety net population, as the majority of patients are uninsured or enrolled in Medicaid. Some research also suggests that health centers are a cost-effective way of meeting this population's health needs because researchers have found that patients seen at health centers have lower health care costs than those served in other settings. In general, research has found that health centers, among other outcomes, improve health, reduce costs, and provide access to health care for populations that may otherwise not obtain health care. Section 330 grants—funded by the health center program's appropriation—are only one funding source for federal health centers. They are estimated to only cover one-fifth of an individual health center's operating costs; however, individual health centers are eligible for grants or payments from a number of federal programs to supplement their facilities' budgets. These federal programs provide (1) incentives to recruit and retain providers; (2) access to the federally qualified health center (FQHC) designation that entitles facilities to higher reimbursement rates from Medicare and Medicaid; (3) access to additional funding through federal programs that target populations generally served by health centers; and (4) in-kind support such as access to discounted or free drug discounts or medical malpractice insurance. Appropriations for the health center program have increased over the past decade, resulting in more centers and more patients served. The program expansion occurred partially through the Patient Protection and Affordable Care Act of 2010 (P.L. 111-148, ACA), which created the Community Health Center Fund (CHCF) that included a total of $9.5 billion for health center operations to be appropriated in FY2011 through FY2015. Despite recent program increases, it is not clear that the program's budget will continue to increase. In recent years, funds from the CHCF were used to augment discretionary appropriation reductions to the health center program and have made up nearly half of the health center's appropriation. As the CHCF ends in FY2015, continued program funding may be of congressional concern. This report provides an overview of the federal health center program including its statutory authority, program requirements, and appropriation levels. The report then describes health centers in general, where they are located, their patient population, and some outcomes associated with health center use. It also describes some federal programs available to assist health center operations including the FQHC designation for Medicare and Medicaid payments. The report concludes with a brief discussion of issues for Congress such as the potential effect of the ACA on health centers, the health center workforce, and financial considerations for health centers in the context of changing federal and state budgets. Finally, the report has two appendixes that describe (1) FQHC payments for Medicare and Medicaid beneficiaries served at health centers; and (2) programs that are similar to health centers but not authorized in Section 330 of the PHSA.