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Community health centers face economic uncertainty as government shutdown deadline approaches

A young boy nervously looks at a health care worker holding a flu shot.
Sarah Boden
90.5 WESA
Shark Snider, age 3, waits for a flu shot at the Squirrel Hill Health Center in Pittsburgh in January 2018.

Health centers in Allegheny County and throughout the United States face a funding cliff at the end of this month due to the looming threat of a federal government shutdown.

Federally qualified health centers, or FQHCs, form the safety net for primary care in the U.S. — often located in rural or low-income communities, they're mandated to serve everyone regardless of a patient's ability to pay. These organizations' second-largest funding source comes from federal grants, which are now in jeopardy.

North Side Christian Health Center in Pittsburgh is one of 399 FQHCs in Pennsylvania, including 35 in Allegheny County. Clinic CEO Bethany Blackburn said that approximately a quarter of her clinic's budget comes from the community health center grant. Without it, she warned North Side Christian might have to cut services, which include dental and behavioral health care.

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This would be a blow to the clinic’s low-income patients who receive services on a sliding scale and would struggle to find affordable care elsewhere.

Blackburn said last year about 97% of North Side Christian's patients lived at 200% of the federal poverty line or below — 13% of patients were uninsured, 18% lived in a public housing community, and 6% were homeless.

Other FQHCs similarly told WESA that if Congressional gridlock continues, they'd be forced to make difficult choices, such as reducing hours or laying off staff. Clinics don't anticipate they'd make immediate changes — though they acknowledged their financial reserves would last for only a finite number of weeks or months.

The ball is in Congress's court

If Congress fails to pass a budget by Sept. 30, it's unlikely that community health centers will be left in the lurch. In the past, legislators have staved off a government shutdown with the passage of a continuing resolution — the temporary spending bill that allows pre-existing appropriations to continue at the same levels for a short period.

In late 2017 and early 2018, FQHCs like North Side Christian were sustained by five successive continuing resolutions until a final budget was passed in March 2018 that extended the clinics' grants for two years.

Piecemeal funding creates unnecessary stress for these nonprofits that operate on thin margins, said Eric Kiehl, the director of policy and partnerships at the Pennsylvania Association of Community Health Centers: "That puts us at an inability to negotiate long-term contracts for basic services, to have staff, and make and enter into leases."

FQHCs told WESA that a tight labor market has made it challenging to hire and retain staff. This includes Centerville Clinics, which reports it serves some 40,000 patients across rural Fayette, Greene and Washington counties.

Until Congress passes a budget, Centerville Executive Director Barry Niccolai said his organization is watching its discretionary spending, including employee salaries and benefits.

"You always have to worry because you can never predict the future and what may happen,” said Niccolai. “But I think legislators on both sides of the aisle recognize the quality and value that community health services provide."

A one-two punch

The current uncertainty is made more tumultuous by recent changes to the Medicaid program: For the first time since the start of the COVID-19 pandemic, the government-funded health insurance program for low-income people is requiring beneficiaries to reenroll.

Bradley Corallo, a senior policy analyst at KFF, anticipates an unprecedented demand for Medicaid enrollment services — particularly from people who don't speak English, are experiencing homelessness or live in rural communities. A possible government shutdown and sudden loss of federal dollars would hinder health centers' ability to help patients remain insured.

"Federal funding is so important for those wraparound services like enrollment assistance because a lot of times they usually aren't reimbursed for that," he said.

Medicaid payments make up the largest portion of an FQHC's budget: In 2021, Medicaid enrollees comprised nearly half of the 30 million patients who receive care at one of the country’s nearly 1,400 FQHCs.

At Pittsburgh's Squirrel Hill Health Center, staff are contacting all Medicaid patients to ensure they understand Medicaid’s enrollment changes and provide help if necessary. Squirrel Hill CEO Susan Friedberg Kalson called it a labor-intensive project that possibly misses some patients.

"We will just have to absorb those people, those costs on the thin air that we live on. And somehow, we will make it happen, because we always have," said Kalson. “But I really do worry that we're going to have to scale back what we do."

Sarah Boden covers health and science for 90.5 WESA. Before coming to Pittsburgh in November 2017, she was a reporter for Iowa Public Radio. As a contributor to the NPR-Kaiser Health News Member Station Reporting Project on Health Care in the States, Sarah's print and audio reporting frequently appears on NPR and KFF Health News.