Health Centers Then & Now

In 1965 the nation’s first community health centers were launched as a small demonstration program as part of the President Johnson’s Office of Economic Opportunity. With roots in the both the civil rights movement and the War on Poverty, the earliest health centers had as their mission no less than using the health care system to change the health and lives of their communities’ residents.

Since their early days, health centers have flourished as perhaps few would imagine. In 2014, more than 1200 health centers now provide health care to 22 million patients throughout the 50 states, the District of Columbia, and the U.S. territories.

Patients Served

23 MILLION

The Earliest Days

Before 1965
While the first neighborhood health centers were officially launched in 1965, some of today’s community health centers have roots in their communities that go back years or even decades before.

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  • Patients Served < 100,000

The Earliest Days

1965: First Neighborhood Health Centers Launched
The first “Neighborhood Health Centers" are funded under demonstration authority by the federal Office of Economic Opportunity (OEO), the lead agency in President Lyndon Johnson’s “War on Poverty”. Building on a vision of comprehensive, community-based services, physician leaders Drs. H. Jack Geiger and Count D. Gibson Jr. pioneer the founding of the first two health centers in the nation at Columbia Point, Dorchester MA, and Mound Bayou, Mississippi, launching a movement in urban and rural areas across the country. The first health center west of the Mississippi opens in 1966 in Denver, CO. Senator Edward M. Kennedy, elected in 1962, visits Columbia Point and begins his life’s work championing care for the underserved and the health center cause.

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  • Patients Served > 100,000

The National Association of Community Health Centers

1971: The Founding of NACHC
The National Association of Neighborhood Health Centers (later to become NACHC, the National Association of Community Health Centers) is founded by executives of the OEO-funded Neighborhood Health Centers, a demonstration activity in several urban and rural communities across the country. The Association’s objective is to provide education, training and technical assistance to NHC staff and community Board members.

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  • Patients Served > 500,000

Authorization & Rural Growth

1975 - 1977: CHC Program Authorized and Rural Growth
After a successful battle waged by NACHC and its membership, the Community Health Centers program is authorized for first time as a permanent program, after 10 years as a demonstration effort, under Section 330 of the U.S. Public Health Service Act (first under OEO and later under the U.S. Department of Health Education and Welfare). The Migrant Health program is also reauthorized as Sec 329 in S. 66 (Public Law 94-63), but only after House and Senate each override President Gerald Ford's veto (requiring 2/3 vote in each chamber). President Jimmy Carter subsequently calls for major expansion of health centers, including the “Rural Health Initiative,” more than doubling program funding over 4 years.

The Reagan Era: Threats & Opportunities

1980 - 1984: Health Centers and the First Reagan Term: Threats and Opportunities
Ronald Reagan takes Presidency, calls for a sea change in role of federal government, proposing the elimination of hundreds of federal programs and block granting of others, including Community and Migrant Health Centers, to states. Health centers survive the greatest threat in their brief history as NACHC and its membership fight for repeal of the optional block grant which is taken by only one state), and return the program to direct federal-local partnership basis. As an economic downturn grips the country in 1982-83, NACHC leads effort to secure $65 million in Jobs Bill funding, equal to 20% of current annual CHC funding. NACHC also leads the successful effort for federal funding in the development of State and Regional Primary Care Associations (S/RPCAs).

The Reagan Era: Threats and Opportunities

1985 - 1986: Health Centers and the Second Reagan Term: Resurgence and Expansion
Health centers rally sufficient bipartisan support to repeal optional block grant and return program to direct federal-local partnership basis. State and Regional Primary Care Associations (PCAs), formed by health centers to monitor state policy developments, receive their first federal funding and recognition. Special Comprehensive Perinatal Care initiative is established under CHC and MH programs, triggering the first new health centers funding since 1981 (except for one-time ‘Jobs Bill’ funding during 1982-83 recession) allowing health centers to develop special activities to reduce infant mortality in low-income and minority communities (P.L.s 99-117. 99-280, and 99-660).

Federally Qualified Health Centers

1987 - 1992: Medicare and Medicaid “Federally Qualified Health Centers” and FTCA Coverage
The Health Care for Homeless (HCH) program at Sec. 340 of the PHS Act (P.L. 100-77) is established through the Stewart B. McKinney Homeless Assistance Act.
President George H. Bush proposes health center expansion, increasing federal funding by more than $150 million. Congress centralizes health centers' grants administration, establishes Federally Qualified Health Centers (FQHCs) in both Medicaid and Medicare (making services a guaranteed benefit and requiring cost-based payments), and extends malpractice coverage under Federal Tort Claims Act (FTCA) to health centers as the only non-governmental covered entities. Congress creates the new 340 Drug Pricing Program 340B through the enactment of P.L. 102-585, requiring pharmaceutical manufacturers to sell medicines to health centers and other safety net providers at deeply discounted rates. The Public Housing Primary Care Program is established with the enactment of the Disadvantaged Minority Health Improvement Act of 1990. (P.L. 101-527).

Federally Qualified Health Centers

1995 - 1997: Growth and Challenges: Reauthorization, Managed Care and SCHIP
Despite strong Congressional efforts to block grant or dismantle numerous health programs (including Medicaid), health centers secure 5-year reauthorization and help to defeat Medicaid block grant. The Health Centers Consolidation Act of 1996 (P.L. 104-299) consolidates funding for Community, Migrant, and Homeless health center programs as consolidated authority in Section 330., Congress and the White House subsequently agree to major changes in Medicaid that accelerate the use of managed care systems, including FQHC ‘wrap-around’ payments that eliminate health center losses under Medicaid managed care, but also call for phase-out of Medicaid FQHC payment system. Congress creates new State Children’s Health Insurance (CHIP) program. NACHC creates, in 1995, the Community Health Corps Program, which subsequently becomes the largest health-focused National AmeriCorps program in the country.

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  • Patients Served 9 Million

Federally Qualified Health Centers

2000: Medicaid FQHC Payments Preserved; Health Center Funding Reaches $1 Billion
Congressional health center supporters stave off the phase-out of Medicaid FQHC payments, replacing it with a Prospective Payment System (PPS) that avoids huge revenue losses. NACHC and its members introduce the REACH initiative proposing to double health center funding over 5 years. Both Presidential candidates - Bill Bradley and George W. Bush - embrace REACH and more than 60 percent of Congress support the initial steps. Federal funding for health centers surpasses $1 billion.

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  • Patients Served 12 Million

Reauthorization & Expansion

2001 - 2002: Health Centers Programs Reauthorized and Expanded
President George W. Bush fulfills campaign pledge by calling for 5-year initiative to increase health center funding by $700 million. Congress unanimously reauthorizes the Health Center Program (S. 1533), boosting federal funding for health centers by $175 million in first year, exceeding President Bush’s request

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  • Patients Served 13 Million

Reauthorization & Expansion

2002 - 2004: Health Centers Reauthorized and Expanded, Major NHSC Reforms
President Bush’s Health Center Growth Initiative receives strong bipartisan support in Congress. Health centers overcome major obstacles to secure 4-year reauthorization of the consolidated Health Centers authority through 2006 (under PHS §330), including new authority to provide operational support to health center-owned/operated networks. Healthy Communities Access Program (HCAP) is launched to coordinate care for uninsured. Congress also reauthorizes for 4 years the National Health Services Corps (NHSC) program, providing an automatic Health Professional Shortage Area (HPSA) designation for all FQHC sites, as well as new requirements that all NHSC sites must agree to “open door” policy and use of sliding fee system. Congress exceeds Bush’s funding requests for health centers, pushing the total health center budget to $1.6 billion for FY 2004 (60% above FY 2000 level), while state funding - despite fiscal crisis gripping most states - approaches $350 million. Later, Congress enacts new Medicare prescription drug benefit (Part D) and other Medicare reforms, including creation of new Medicare ‘wrap-around’ payment system (similar to Medicaid), and establishment of special fraud & abuse ‘safe harbors’ for donated/discounted services, goods and supplies from vendors or other providers.

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  • Patients Served 15 Million

Reauthorization & Expansion

2005 - 2008: Medicaid Preserved; Health Center Funding Exceeds $2 Billion
Sensing potential attacks on the Medicaid and SCHIP programs, NACHC forms and leads a coalition of primary care and safety net providers, the Partnership for Medicaid, in fending off most harmful changes to Medicaid in the Deficit Reduction Act of 2005– except for a requirement that states document the legal status of all Medicaid recipients. NACHC and others fend off proposed changes in MUA/HPSA designation methodologies that would have severely limited future growth, and secure unanimous Congressional approval of the Health Centers Renewal Act of 2008 (P.L. 110-355), an historic 4-year reauthorization of both the CHC and NHSC programs. President Bush’s health center initiative doubles the size of the program, reaching 18 million people, as federal funding for CHCs surpasses the $2 billion mark, double the FY 2000 funding level, while state funding grows to $590 million. NACHC membership launches the Access for All America (AAA) plan to preserve, strengthen and expand health centers to reach 30 million people by 2015, and ultimately all medically underserved. Presidential candidates of both parties (McCain and Obama) endorse the expansion of community health centers as a public safety net.

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  • Patients Served 18 Million

Reauthorization & Expansion

2009: Historic Health Center Investment as an Economic Stimulus
Within the first month of new President Barack Obama’s term, Congress reauthorizes (and renames) CHIP; expansion reaches 4 million additional children and incorporates FQHC payment rules. The American Reinvestment and Recovery Act (ARRA) delivers the single largest investment in health center history, providing $2 billion in direct CHC funding to cover the costs of caring for new patients and the capital expenditures required to support expansion, and $300 million for NHSC, Medicaid funding expansions that include assistance to health centers approaching an additional $1 billion for HIT adoption.

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  • Patients Served 19 Million

Health Reform

2010: Celebrating 45 years of CHC History as Historic Health Reform is Approved
Health reform becomes law in March 2010 with the passage of the Affordable Care Act (ACA), and health centers feature prominently in a landmark program to expand access, improve quality, and reduce the cost of care for all Americans. In addition to key Medicaid expansions and payment protections, the ACA provides for $11 billion in increased CHC funding over the next five years, to enable health centers to double capacity, and $1.5 billion for National Health Service Corps over five years to substantially expand the number of clinicians in underserved areas.

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  • Patients Served 19.5 Million

Health Reform

2011: Elections Usher in Shift in Control, Major Budget Reductions
The 2010 elections shift political control in the House and narrow majority control in the Senate, and new climate is focused on reducing the federal budget and repealing health reform.

With $14 trillion Federal budget deficit, house proposals call for unprecedented cuts in domestic spending, block granting Medicaid to the states, and deep reductions to or elimination of many domestic programs. 2011-2012 federal budget eliminates $600 million in funding from CHC program and $125 million from NHSC, resulting in slowdown of health center expansion.

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  • Patients Served > 20 Million

The Primary Care Funding Cliff

2012 - 2013: Growing Capacity and Averting the Funding Cliff
America’s health centers continued to grow, with more than 22 million people served in over 9,000 medically underserved communities in 2012. Still, it was a challenging year. After nearly a year of wrangling and political intrigue, Congress approved legislation on New Year’s Day, 2013 to avert the fiscal cliff and delay for two months a dreaded sequester. The prospect of sequestration - an arbitrary cut to all programs, regardless of effectiveness - imperils the critical progress made by CHCs over the past years. The year closed and the new year began with CHC advocates working hard to ensure that a limit of a 2% reduction remains in place for all health center funding should the sequester eventually go through, and that the Administration deploys the full $300 million increase provided within the Health Center Trust Fund for FY13 not only for growth as intended by Congress, but also to offset any sequester funding cut to health centers in lieu of cutting existing health center operations. Further, with entitlement reform likely to be attached to any legislative vehicle designed to address the debt ceiling or avoid a further sequester, ensuring that Medicaid is not undermined is a key priority.

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  • Patients Served 21 Million

The Primary Care Funding Cliff

2014: Access is the Answer
Following the open enrollment period that began in October 2013, millions of Americans gained health care coverage—many for the first time—through the health insurance exchanges established under the Affordable Care Act. For FY 2014, $3.7 billion in health center funding has been secured, including $350 million for New Access Points, Expanded Medical Capacity and Service Expansion activities, $58 million for Outreach and Enrollment. Still, America’s access deficit— affecting 62 million people, many with insurance, who nonetheless experience poor access to primary care services as a result of local physician shortages—cannot be solved with insurance alone.

President Obama responded to calls to fix the looming funding cliff for health centers, allocating $8.1 billion in new funding over fiscal years 2016-2018. Also proposed is $14.6 billion for primary care workforce initiatives to support growing the National Health Services Corps and training primary-care residents in high-need communities in team-based care approaches, such as Teaching Health Centers, and higher payments to Medicaid providers. The Center for Medicaid Services (CMS) released the final rules for the new Medicare FQHC PPS (prospective payment system) which will go into effect October 1, 2014, and establishes a single PPS rate with adjustments based on geography and other factors.

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  • Patients Served > 22 Million

Celebrating the First 50 Years

2015: The 50th Anniversary of the CHC Movement
The passage with overwhelming bi-partisan support of HR 2, the Medicare and CHIP Reauthorization Act of 2015, follows a concerted effort to tackle the Primary Care Funding Cliff. In addition to extending Community Health Center funding for 2 years, with a total of $7.2 billion in mandatory funds, it also provides extension funding for the National Health Service Corps (NHSC) and the Teaching Health Centers Graduate Medical Education (THCGME) Program, both critical to developing and maintaining the pipeline of CHC clinicians. The successful Children’s Health Insurance Program (CHIP), which provides essential coverage for low-income children, is also extended. The legislation stabilizes federal support for health centers at a time when demand for affordable primary care is growing, and as CHCS nationally celebrate a milestone 50th anniversary.

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  • Patients Served > 25 Million