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$1 Billion and American Rescue Plan Funding the Federally Qualified Health Centers

On September 28, 2021, the U.S. Department of Health and Human Services (HHS) awarded approximately $1 billion under the American Rescue Plan (ARP) to fund 1,292 federally qualified health centers (FQHC) across the country. The funds are intended to support a growing need for improvement and modernization projects, expansion of facilities, and increase access to mobile medical units, telehealth technology, vaccine storage units and other capital needs related to COVID-19.

Community health centers (CHCs) serve as a necessary support valve for our country’s medical system.  More than 91 percent of community health center patients are individuals or families living at or below 200 percent of the federal poverty line and nearly 63 percent are minorities. Over the past 19 months, citizens, community leaders and legislators have seen an uptick in need for CHC’s in these areas. Community health centers have accounted for more than 15 million vaccinations over this period while at the same time, providing non-emergency services to patients which have helped to relieve hospitals from overcrowding. One of the more noticeable changes made during the pandemic related to the rapid response to telehealth needs and behavioral health services. To address these needs, combined with the change in how society provides and receives medical care, and changes in the types of care needed, it was obvious additional funding was necessary.

The awards, which will be administered by the Health Resources and Services Administration (HRSA) will be specifically targeted to health centers that serve medically underserved and other vulnerable populations and communities, which have been disproportionately affected by COVID-19 and other health conditions.  By constructing new facilities or renovating and expanding existing facilities, health centers will ensure that these communities will have more equitable access to high-quality primary health care.

According to the HRSA website, ARP-Capital funding can be used to support one or more of the following project types, for up to five (5) total projects per eligible health center:

  • Construction of a New Facility: This project creates a new building structure. Activities in this project include construction of a new stand-alone structure.
  • Construction/Expansion of an Existing Facility: This project adds square footage to an existing facility and/or includes significant site work.
  • Alteration/Renovation of an Existing Facility: This project involves renovations to an existing facility that does not increase square footage of the facility.
  • Equipment Only: This project involves the acquisition of loose, moveable equipment not affixed to the physical building structure.

Funding will be based on a formula including a base of $500,000 plus:  $11 per patient reported in the 2019 Uniform Data System. Award recipients will have three years to complete their selected projects.

Award recipients are required to submit quarterly progress reports until all projects are fully completed. The progress reporting schedule for year one ARP-Capital awards is below:

HRSA will notify award recipients when quarterly progress updates, including guidance and technical assistance to support their completion, are available.  A video detailing the process to upload progress reports is available at the following site here.

As with other HRSA grants and funding, expenditures will be subject to Uniform Administrative Guidance, Cost Principles, and audit requirements.

Author: Stephanie Nissen, CPA | snissen@withum.com

Contact a Withum Healthcare professional today with any questions regarding your health center.

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