Impending Expiration of the Community Health Center Fund Presents Financial Uncertainty For FQHCs

Section 330 of the Public Health Service Act established the federal Health Center Program. The Health Resources and Services Administration (HRSA) within the U.S. Department of Health and Human Services (HHS) administers the program and grants awards to support health centers providing care to low-income individuals.

In 2011, Congress established the Community Health Center Fund (CHCF) through the Patient Protection and Affordable Care Act with the goal of increasing appropriations to these health centers. The CHCF provides approximately 70 percent of the federal funding to U.S. Health Centers. Health centers have used the CHCF appropriations to hire new and necessary staff, construct and improve facilities, and launch new sites, etc. The CHCF has become a key financial stabilizer for health centers nationwide, but is currently set to expire on January 30, 2026, presenting financial uncertainty for the future.

In March of 2025, the House and Senate passed a continuing resolution to continue providing CHCF appropriations through September 30, 2025 at an annualized rate of $4.26b. On September 16, 2025, the House Appropriations Committee majority approved the Continuing Appropriations and Extensions Act, extending funding through January 30, 2026. These recent resolutions are consistent with an extended trend of short-term funding extensions for the CHCF, which have contributed to financial uncertainty for health centers and inhibited them from making strategic decisions such as hiring staff, expanding services, and making long-term investments. According to the National Association of Community Health Centers, 42 percent of health centers have only 90 days or fewer of cash reserves, so the loss of CHCF funding could threaten their sustainability. Despite the impending expiration of CHCF appropriations, there have been bipartisan efforts to increase funding.

Congresswoman Cathy Anne McMorris Rodgers, (R-WA) introduced the Lower Costs, More Transparency Act on September 8, 2023. The bill would have provided a substantial increase in mandatory funding for health centers. The House of Representatives passed the bill by a vote of 320-71, but the Senate did not vote on it. Separately, Senator Bernie Sanders (I- VT) introduced the Bipartisan Primary Care and Health Workforce Act on September 19, 2023. The bill would have increased mandatory funding for health centers to $5.8b for three years but did not receive a vote from the House of Representatives. Both bills expired on January 3, 2025, requiring a re-introduction to the House of Representatives for a vote. Advocacy groups, including the National Association of Community Health Centers, are urging Congress to secure funding for health centers and collaborating with them to ensure Congress includes funding in the annual discretionary appropriations for fiscal year 2026 before the CHCF expires on January 30th.

If the government is unable to pass a continuing resolution before January 30th, the CHCF may be unable to grant new awards to health centers after the expiration date. However, health centers with existing CHCF awards granted prior to January 30th will be able to continue drawing on these awards for the duration of the grant’s period of performance under HHS 45 CFR § 75.309 of the Code of Federal Regulations, which was enacted by HHS to establish uniform administrative requirements for federal grants. This regulation indicates that if a grant’s period of performance continues beyond the statutory expiration, health centers may continue to draw on those funds during that period. HRSA monitors compliance with this regulation and requires health centers to maintain dated copies of all invoices, payroll records, receipts, etc. to verify draws during the period of performance are eligible. Unfortunately, if a continuing resolution is not passed and the period of performance expires, the health center will be unable to draw on the award and will have 90 days to liquidate its obligations, unless it receives an extension from HHS.

At the end of the day, the continuation of the CFHC is critical to the nation’s health care system and ability for the under and uninsured population of the country to receive the necessary medical services they require. If funding is not continued, it is likely to result in a decline in our nation’s overall health and extended wait times and overcrowding within our hospital systems.

Author: Anthony Whelan, CPA | [email protected]