Community health centers face funding delays after Trump administration freeze

Federally funded community health centers in at least 10 states are experiencing delays accessing their funds, forcing some to shut down and others to contemplate closures, several officials tell PBS News.

PBS has confirmed that health centers in Arizona, Virginia, Maine, Nebraska, Illinois, Michigan, Vermont, Rhode Island, Montana and Minnesota were unable, at least temporarily, to access funds. The Maine and Montana centers are receiving their funding again.

Vacheria Keys, the associate vice president of policy and regulatory affairs at the National Association of Community Health Centers, said the delays started last Tuesday after the administration issued a memo putting a blanket freeze on grant funding, which was later rescinded. Two federal judges have blocked the freeze until pending litigation moves forward.

Community health centers see more than 32 million people a year, including one in five rural Americans, according to Advocates for Community Health (ACH), a nonpartisan membership organization of community health centers. More than 500,000 people work at these centers across the country, it said in a statement.

Lisa Desjardins reports on the destabilizing effect the funding freeze has had on a wide range of programs despite court interventions.

“Community health centers provide high-quality primary and preventive care, dental care, behavioral health and substance use disorder services, and low-cost prescription drugs,” it wrote. “When health centers close, people with chronic conditions miss appointments, pregnant women miss prenatal visits, and behavioral health services are interrupted, worsening outcomes and increasing costs to the entire health care system.”

CHCs, which receive a combination of federal grant money, Medicaid reimbursements and private insurance, typically draw down their federal funds on a monthly basis, logging in to a portal to request the action. But for those centers experiencing delays, the portal shows their request as “pending.”

“A lot of health centers have limited cash on hand, and a lot of them rely on being able to regulate access to federal funding, it’s like a bank account. They use it to be able to do payroll, administrative things. But this is a process that has never really been disrupted to this level,” Keys said.

While Keys did not speculate on why this was happening, she said community health center leaders across the country had rushed to the site to try to draw down all of their funds before the declared 5 p.m. funding freeze. There is usually no such deadline to draw down funds.

This isn’t happening to all community health centers; some have been able to access their federal funds without issue. The bottom line is officials don’t know why this is happening at all, or why it’s happening to some centers and not to others, and they say agency officials have not been very responsive in explaining why.

“We understand that some Payment Management System (PMS) users experienced technical issues,” HHS said in a statement to PBS News. “The system is back up and running now, but users may be experiencing lags due to the high volume of requests. HHS is working through the Program Support Center to help expedite resolution as quickly as possible.”

Being without access to community funding is “directly impacting [centers’] ability to serve their patients, staff, and communities,” Amanda Pears Kelly, CEO at Advocates for Community Health, said in a statement, adding that the “funding community health centers are trying to access has been authorized and appropriated by Congress and obligated by the Health Resources and Services Administration (HRSA).”

The CEO of the Minnesota Association of Community Health Centers, Jonathan Watson, said one of the state’s 16 community health centers had been unable to access funds until Thursday afternoon. “It doesn’t give us a lot of confidence in our ability to plan for the future, much less meet payroll,” he said.

Ted Varipatis, a spokesman for the Penobscot Community Health Center in Maine, which had temporarily lost access to funds, said, “This has illustrated the fragility of the ground upon which PCHC walks.”

Community health center officials are all in Washington, D.C. this week and spent time Thursday on Capitol Hill lobbying members of Congress on this and other issues.

In Virginia, 11 of the commonwealth’s 31 member health centers experienced disruptions in drawing down their funding this week, according to Virginia Community Healthcare Association spokesman Joe Stevens. The Richmond center had to close three of its locations’ doors completely, and refer patients to other locations, because those clinics use the federal funding for employee salaries, and they had no reserves. Virginia Public Media first reported on the disruption in payments and services on Tuesday.

Stevens said VCHA canvassed its members when the disruptions began about how long they’d be able to operate without those funds. The responses ranged between 100 days to six to eight months, depending on how much of the center’s budget comes from the grant money.

He said this was the first time a center in the state had had to close its doors temporarily because of inaccessible funds.