The program is administered by the Health Resources and Services Administration (HRSA)—specifically by its Bureau of Primary Health Care—within the Department of Health and Human Services (HHS). The federal Health Center Program is authorized in Section 330 of the Public Health Service Act (PHSA) and supports four types of health centers: (1) community health centers, (2) health centers for the homeless, (3) health centers for residents of public housing, and (4) migrant health centers. Health centers are also required to be located in geographic areas that have few health care providers or to provide care to populations that are medically underserved. 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 primarily serve the intended safety net population, as the majority of patients are uninsured or enrolled in Medicaid. 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 outcomes associated with health center use. It also describes the federal programs available to assist health center operations, including the federally qualified health center (FQHC) designation for Medicare and Medicaid payments. 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. The federal Health Center Program awards grants to support outpatient primary care facilities that provide care to primarily low-income individuals. This section of the report describes the statutory authority for the federal Health Center Program, program requirements, types of grants awarded in support of the Health Center Program, the Health Center Program's appropriation, and other funding/revenue that health centers receive. As part of the requirement to provide services to all individuals regardless of their ability to pay, the health center is required to discount the fee schedule to reduce or waive the amount that the patient pays based on the patient's ability to pay as determined by a patient's income relative to the federal poverty level and the patient's family size—no other criteria may be considered. Researchers have found that access to health centers can improve health outcomes and reduce costs for the populations and areas they serve. The FQHC designation was created to ensure that Medicare and Medicaid reimbursements cover the costs of providing services so that Section 330 grant funds are not used to subsidize these costs.
The federal Health Center Program is authorized in Section 330 of the Public Health Service Act (PHSA) (42 U.S.C. §254b) and administered by the Health Resources and Services Administration (HRSA) within the Department of Health and Human Services. The program 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 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 cost-effective; 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. The grants are estimated to cover only one-fifth of an average health center's operating costs; however, individual health centers are eligible for grants or payments from a number of federal programs to supplement their budgets. These federal programs provide (1) incentives to recruit and retain providers; (2) access to the federally qualified health center (FQHC) designation, which entitles facilities to cost-related 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 drug discounts or federal coverage for medical malpractice claims.
This report provides an overview of the federal Health Center Program, including its statutory authority, program requirements, and appropriation levels. It then describes health centers in general, where they are located, their patient population, and outcomes associated with health center use. The report also describes federal programs available to assist health center operations, including the FQHC designation for Medicare and Medicaid payments. The report concludes with 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.