	Introduction to the PHS Agencies

The Department of Health and Human Services (HHS) has designated eight of its 11 operating divisions (agencies) as components of the U.S. Public Health Service (PHS). The PHS agencies are: (1) the Agency for Healthcare Research and Quality (AHRQ), (2) the Agency for Toxic Substances and Disease Registry (ATSDR), (3) the Centers for Disease Control and Prevention (CDC), (4) the Food and Drug Administration (FDA), (5) the Health Resources and Services Administration (HRSA), (6) the Indian Health Service (IHS), (7) the National Institutes of Health (NIH), and (8) the Substance Abuse and Mental Health Services Administration (SAMHSA). NIH conducts and supports basic, clinical, and translational medical research. AHRQ conducts and supports research on the quality and effectiveness of health care services and systems. IHS supports a health care delivery system for American Indians and Alaska Natives. SAMHSA funds community-based mental health and substance abuse prevention and treatment services. ATSDR, which is headed by the CDC director and included in the discussion of CDC in this report, is tasked with identifying potential public health effects from exposure to hazardous substances. In FY2013, for example, NIH was the primary source of transfers both to CMS for ACA implementation and to CDC and SAMHSA to help offset a loss of funding for those two agencies from the ACA's Prevention and Public Health Fund (PPHF). Meanwhile, AHRQ and CDC experienced a significant net loss of set-aside funding in FY2015. From FY2003 through FY2014, AHRQ did not receive an annual discretionary appropriation. Mandatory Funding, User Fees, and Collections

Although the bulk of PHS agency funding is provided through annual discretionary appropriations, agencies also receive mandatory funding, user fees, and third-party collections. First, the Community Health Center Fund (CHCF) , for which the ACA provided a total of $11 billion in annual appropriations over the five-year period FY2011-FY2015, is supporting the federal health centers program and the National Health Service Corps (NHSC), both administered by HRSA. A broader analysis of the allocation of PPHF funding is provided in Appendix C .
The Patient-Centered Outcomes Research Trust Fund (PCORTF) is supporting comparative effectiveness research over a 10-year period (FY2010-FY2019) with a mix of appropriations—some of which are offset by revenue from a fee imposed on health insurance policies and self-insured health plans—and transfers from the Medicare Part A and Part B trust funds. FDA's user fee programs now support the agency's regulation of prescription drugs, animal drugs, medical devices, tobacco products, and foods, among other activities. Similarly, AHRQ's discretionary appropriation in FY2015 was less than the amount of set-aside funding the agency received in FY2010. Almost all of the CDC accounts are funded with discretionary appropriations plus amounts from multiple other sources (see Table 4 ). Congress has yet to reauthorize the agency's funding. In FY2015, AHRQ received its own discretionary appropriation for the first time in more than a decade in lieu of any set-aside funding. The several different user fees, which account for 42% of FDA's total FY2015 program level, contribute only to the Salaries and Expenses account. Agency Funding Since FY2010

Between FY2010 and FY2015, FDA's funding increased from $3.1 billion to $4.5 billion (see Table 5 ). Although congressionally provided appropriations increased 10% over that period, user fee revenue more than doubled. Agency Funding Since FY2010

HRSA funding increased from $8.1 billion in FY2010 to $10.3 billion in FY2015 despite a reduction in its discretionary appropriation during that time (see Table 6 ). The overall growth in HRSA's funding was primarily driven by increasing amounts from the CHCF, which more than offset the decline in discretionary funding. Agency Funding Since FY2010

IHS's funding, which includes discretionary appropriations and collections from third-party payers of health care, increased between FY2010 and FY2015 from $5.1 billion to $5.9 billion (see Table 7 ). This increase was driven both by increased discretionary appropriations, which rose from $4.1 billion to $4.6 billion, and by increased collections, which rose from $891 million to $1.1 billion. NIH gets almost its entire funding (99.5%) from annual discretionary appropriations. Under the ACA, PPHF's annual appropriation would increase from $500 million for FY2010 to $2 billion for FY2015 and each subsequent fiscal year.
Within the Department of Health and Human Services (HHS), eight agencies are designated components of the U.S. Public Health Service (PHS). The PHS agencies are funded primarily with annual discretionary appropriations. They also receive significant amounts of funding from other sources including mandatory funds from the Affordable Care Act (ACA), user fees, and third-party reimbursements (collections).
The Agency for Healthcare Research and Quality (AHRQ) funds research on improving the quality and delivery of health care. For several years prior to FY2015, AHRQ did not receive a direct appropriation. Instead, it relied on redistributed ("set-aside") funds from other PHS agencies for most of its funding, with supplemental amounts from the ACA's Patient-Centered Outcomes Research Trust Fund (PCORTF). In FY2015, AHRQ received its own appropriation in lieu of set-aside funds. Overall, the agency's total funding rose from $403 million to $465 million between FY2010 and FY2015. That increase came despite a decrease in discretionary funding over that period, which was more than offset by increasing amounts of PCORTF funding. The Centers for Disease Control and Prevention (CDC) is the federal government's lead public health agency. CDC obtains its funding from multiple sources besides discretionary appropriations. The agency's funding fluctuated between FY2010 and FY2015, with the overall level increasing slightly from $10.9 billion to $11.3 billion over that period. CDC experienced a drop in its discretionary appropriations during that time, which was offset by funding from other sources, primarily the ACA's Prevention and Public Health Fund (PPHF). The Agency for Toxic Substances and Disease Registry (ATSDR) investigates the public health impact of exposure to hazardous substances. ATSDR is headed by the CDC director and included in the discussion of CDC in this report. The Food and Drug Administration (FDA) regulates drugs, medical devices, food, and tobacco products, among other consumer products. FDA saw its funding increase significantly between FY2010 and FY2015 from $3.1 billion to $4.5 billion. The agency is funded with annual discretionary appropriations and industry user fees. While appropriations increased modestly over the FY2010-FY2015 period, user fees more than doubled and now account for 42% of FDA's total funding. The Health Resources and Services Administration (HRSA) funds programs and systems that provide health care services to the uninsured and medically underserved. HRSA, like CDC, relies on funding from several different sources. The agency's funding increased from $8.1 billion in FY2010 to $10.3 billion in FY2015 despite a significant drop in its discretionary appropriation during that time. The growth in overall funding was driven largely by increasing amounts from the ACA's Community Health Center Fund (CHCF). The Indian Health Service (IHS) supports a health care delivery system for Native Americans. IHS's funding, which includes discretionary appropriations and collections from third-party payers of health care, increased between FY2010 and FY2015 from $5.1 billion to $5.9 billion. Appropriations and collections both increased during that period. The National Institutes of Health (NIH) funds basic, clinical, and translational biomedical and behavioral research. NIH gets more than 99% of its funding from discretionary appropriations. Its funding dropped from $31.2 billion in FY2010 to $30.3 billion in FY2015. The Substance Abuse and Mental Health Services Administration (SAMHSA) funds mental health and substance abuse prevention and treatment services. SAMHSA's funding, about 95% of which comes from discretionary appropriations, has remained at about $3.6 billion over the FY2010-FY2015 period.
Congress has yet to complete work on any of the regular appropriations bills for FY2016, which began on October 1, 2015. On September 30, the President signed the Continuing Appropriations Act, 2016 (P.L. 114-53). The measure provides continuing appropriations through December 11, 2016. It funds discretionary programs at the same rate (and under the same conditions) as in FY2015, minus an across-the-board reduction of 0.2108%. For entitlement and other mandatory spending that is funded through appropriation acts, P.L. 114-53 provides funding to maintain program levels under current law. This report will be updated with information on PHS agency funding for FY2016 once legislative action on appropriations for the new fiscal year is completed.