Background

Community health centers (CHCs), primary health care clinics funded with grants under §330 of the Public Health Service Act, have become a principal source of care and treatment for the nation’s medically underserved urban and rural populations. Today, there are 1250 federally funded community health centers operating in more than 8000 sites caring for more than 20 million patients. More than 90 percent of health-center patients have low incomes, and health centers serve one in five low-income, uninsured U.S. residents.^[1] Health centers are a principal source of primary health care for  medically underserved populations, whose low incomes, elevated health risks, and residence in communities with primary health care shortages increase the likelihood of health care access barriers.  An estimated 100 million persons reside in communities that can be considered medically underserved.^[2]

Health centers are recognized for the quality of their care, their community economic impact,^[3] and their accessibility to especially at-risk populations such as homeless people and farm worker families. Health centers offer comprehensive medical, pharmacy, and dental care using a staff-model structure that emphasizes care management within a medical home and that has achieved considerable efficiencies. In 2009, Congress appropriated $2 billion for health center growth as part of the American Recovery and Reinvestment Act (ARRA), allowing health centers to add services (particularly behavioral and dental care) and service delivery sites, and increase the number of uninsured and underserved patients who receive care. One study has estimated that further health center expansion, as called for in the 2009 House and Senate health reform legislation, could double the number of patients served while achieving a 10-year federal Medicaid savings of $105 billion.^[4]

Health centers frequently are staffed by clinicians who receive loan repayment awards and scholarships through the National Health Service Corps. The Corps was  established in 1972 within the Public Health Service Act to provide support to medical, mental, and dental health professionals in exchange for service in areas identified as experiencing a “health professions shortage.” Since 1982, more than 30,000 health professionals have received funding through the Corps. The federal government estimates that 80% remain in their communities beyond the end of their service, while half dedicate their careers to health care for medically underserved populations.^[5]

Changes Made by the Health Reform Law
P.L. 111-148 §§5601 and 10503(b)(1), as  further amended by §2303, P.L. 111-152

• The health reform law permanently authorizes both the community health centers program^[6] and the National Health Service Corps.^[7]
• The law establishes a five-year Community Health Center Fund to provide for the expansion and “sustained national investment” in community health centers and the National Health Service Corps.^[8] The funds appropriated under the law are in addition to current funding levels for both programs.
• The law authorizes and appropriates funding for the CHC Fund at a total of $9.5 billion over the FY 2011-FY 2015 time period, to be spent as follows: $1.0 billion in FY 2011, $1.2 billion in FY 2012, $1.5 billion in FY 2013, $2.2 billion in FY 2014, and $3.6 billion in FY 2015.^[9] The law authorizes and appropriates an additional $1.5 billion over the FY 2011-2015 time period for the construction and renovation of health centers.^[10]
• The law authorizes and appropriates $1.5 billion over the FY 2011-FY2015 time period for “enhanced funding” to the National Health Service Corps,^[11] reaching an estimated 15,000-17,000 clinicians over the time period.^[12]

Implementation

Agency and Timeline

Both the community health centers program and the National Health Service Corps are administered by the Health Resources and Services Administration (HRSA) within the Department of Health and Human Services. It is anticipated that the Secretary of HHS will delegate to HRSA the primary responsibility for implementing both the CHC funding and the enhanced funding for the National Health Service Corps.  Because the funding flow begins in FY 2011, it is anticipated that HRSA will issue program guidance for both funds in late spring of 2010.

Process

The health reform law does not provide specific direction to HHS regarding the administrative process used to implement the law. HHS and HRSA therefore have the discretion to use a range of tools to implement the statute, such as publishing regulations in the Federal Register with a public notice and comment period or using other types of policy implementation approaches.  Past health center policy implementation activities by HRSA suggest that in the case of both the CHC and the National Health Service Corps Funds, the agency will post announcements of funding availability at its websites, with detailed application instructions that invite both existing health center grantees who seek to expand their programs as well as new applicants.  A similar program announcement approach can be expected in the case of the National Health Service Corps.

Key Implementation Issues

• Purposes of the CHC Fund: Past experience (such as in the case of ARRA) suggests that HRSA will encourage not only new health center applicants, but also will allow existing health centers to apply for funding to add new service delivery sites, expand their hours of operation and staffing, and add services such as dental and behavioral care, in order to reach new patients while improving services for existing patients.  Will this policy mix continue? If so, how will the agency apportion funds between new health centers and expanding the reach of existing grantees?
• Expenditure of the National Health Service Corps Fund: The Corps currently supports medical, dental, and mental health professionals.  How will these additional funds be invested?  For example, how will HRSA allocate funding among physicians, physician assistants, nurse practitioners, and midwives? How will funds be allocated between scholarships and loan repayment awards, given the lag time inherent in any scholarship program?  In scholarship spending, will the agency devote additional resources to the training of nurse practitioners and physician assistants given the longer time period needed to train physicians?
• Rapid deployment:  What steps will HRSA take to assure that the changes in the combined CHC and National Health Service Corps funds can be put into place as rapidly as possible and in advance of the implementation of state health insurance exchanges and the Medicaid expansions which will likely create a surge in demand for primary health from the newly insured?
• Readiness:  What steps will HRSA take, in collaboration with the Centers for Medicare and Medicaid Services and other agencies within HHS charged with health reform implementation, to assure that newly established and expanded health centers and the Corps are  positioned to meet the needs of their populations and communities in 2014? Will they be ready to provide  outreach and onsite enrollment into new coverage options and have the capacity to provide medical homes to newly insured patients?
• Supplantation versus supplementation: The CHC and NHSC funds are designed to build capacity beyond levels that would be achieved through the regular discretionary appropriations process. Will Congress sustain discretionary appropriations levels in the coming years so that the two funds, or will discretionary funding levels be reduced and diminish the effect of the new funds?

Recent Agency Action

As of this writing, HRSA has not issued policy guidance. Policy guidance is anticipated in late spring, 2010.

Authorized Funding Levels

The CHC Fund is authorized at $9.5 billion over the FY 2011-FY 2015 time period, and the NHCS Fund and the CHC capital fund each is authorized at $1.5 billion over the same time period.