From 2000 to 2012, the number of Federally Qualified Health Centers (FQHCs) increased by 64%, from 730 health centers serving almost 10 million patients to nearly 1,200 health centers serving over 21 million patients. Looking ahead to 2020, community health centers will likely see their patient population reach 35 million. Yet while demand is increasing, uncertainty remains regarding the specific breakdown of FY2015 Congressional appropriations and budget. Given the volatility of the upcoming fiscal year and post-ACA landscape, proactive planning and strategic grantseeking are becoming increasingly critical to the long-term success of community health centers.
Previous Trends in FQHC Funding
Between the American Recovery and Reinvestment Act (ARRA) and the Patient Protection and Affordable Care Act (ACA), the federal government has recently invested over $13B in health center infrastructure (FY2009-FY2016). The injection of short-term funding through the ACA’s Community Health Center Fund (CHCF) sought to expand FQHCs’ capacity to care for previously uninsured populations who would enroll in exchange plans and expanded Medicaid programs by FY2016. However, in recent years, these ACA funds have been used to augment reductions in discretionary appropriations for health centers.
In addition, architects of the ACA did not anticipate that Medicaid expansion would become optional, and thus did not envision that in FY2015 there would still be 23 states that had not expanded Medicaid. Over one-third of FQHC patients are uninsured, and with 84% of health center patients living under 200% of the federal poverty line (FPL), many still find insurance coverage out of reach.
The CHCF is currently set to expire at the end of FY2015, concluding with a $3.6B spike in FY2015 funding for health center incentive payments, base grant adjustments, service expansion, and new access points. This leaves FQHCs facing a funding cliff in FY2016 as well as the real possibility of increased demand for services, with over 5 million new Medicaid and CHIP patients and an increasingly disproportionate number of uninsured and underinsured patients.
Current Fiscal Uncertainties
The Kaiser Family Foundation (KKF) conducted a tracking poll this fall to identify top issues for potential mid-term voters, and health care was the second most common issue identified (13%), just below economy/jobs (21%). However, only 3% of respondents specifically identified “ACA” or “Obamacare” as one of their two top issues. Even so, nearly one-third (32%) of potential voters said that they were hearing “a lot” from candidates - and about half (47%) had seen a political ad - about the health care law, specifically. KKF also found that the largest divide on the ACA falls along partisan affiliations, indicating that the Affordable Care Act continues to serve as both a significant policy initiative and political issue.
There is no doubt that FQHCs have served as a key component and critical backbone of the ACA implementation, enrolling an estimated 10.6 million people during the first open enrollment period and expanding access to care for millions of new Medicaid beneficiaries. Though bipartisan majorities in both the House and Senate have called for a solution to the looming reduction in health center funding and appear to appreciate the core value of the health center safety net, there is a real danger that FQHCs will be caught in the crossfire of budget battles and political positioning leading into the 2016 presidential election. The current Continuing Resolution (CR) expires on December 11th, so legislators will have to either pass another CR or take on full year appropriations for FY2015 when they return after mid-term elections. With the Senate up for grabs, both parties have vowed to use the FY2015 appropriations process to either bolster the ACA or weaken it.
Before leaving town for the campaign season, the Senate Appropriations Subcommittee on the Departments of Labor, Health and Human Services, and Education, and Related Agencies (Labor-HHS-Education) approved an FY2015 appropriations bill that reserved $210M for FQHC capital improvements, slating $1B for new access points and service expansion. This pool is a dramatic reduction from the President’s request of $800M, which may jeopardize the previously planned HRSA competition for capital improvement funds in FY2015. With Senate leadership already poised to tie policy restrictions to the appropriations bills or use the bills as leverage for other priorities, FQHCs have good reason to feel vulnerable in the current political climate. How, then, can FQHCs effectively plan for investments in facilities, staffing, and services?
Most health centers have developed strategies for financial growth that include increasing the number of insured patients, working with Medicaid managed care, improving billing and collection practices, and becoming more operationally efficient.
However, these strategies have a finite capacity to improve the bottom line.
Foundations as the Future
With at least $3.6B at stake in FY2015, FQHCs need to be prepared to secure competitive grant dollars funded by the ACA. This may also be an ideal time for FQHCs to strategically assess collaborative relationships, stakeholders, and networks across sectors to amplify their non-federal grant seeking.
As Americans shift their focus from acute “sick” care to wellness and preventive medicine, it seems natural that regional and independent foundations will want to leverage the infrastructure created by federal investments to facilitate efficient, culturally appropriate care through the community health center system. Since FQHCs have already developed the capacity to adopt a myriad of federal and state regulations, reporting requirements, and data analytics, they should be well positioned to pursue private foundation funding.
FQHCs need to strategize now how to sustain their existing service capacity and fuel future growth. These goals may be achieved through the identification of targeted grant opportunities and the efficient use of proposal writing resources.
Teresa Wilke, MBA, is a Grants Consultant with Hanover Research, a global information services firm based in Washington, DC. Teresa has over 16 years of experience in program design, project management, and strategic communications, including 13 years of experience developing grant proposals and grant seeking strategies for universities and healthcare providers. She is a successful proposal writer, having secured over $25 million in new grants for nursing and science education, faculty development, laboratory and health facility renovations, student retention, health literacy, patient support, health information technology, chronic disease management, behavioral health and rural health projects.
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