Estimating the Impact of Medicaid Expansion and Federal Funding Cuts on FQHC Staffing and Patient Capacity

Early View Original Scholarship Health Equity

Policy Points:

  • In the preexpansion period, federally qualified health centers (FQHCs) in Medicaid expansion states were significantly different from those in nonexpansion states. This gap widened as revenues in expansion states continued to grow at a faster rate after the expansion.
  •  If Medicaid expansion had occurred nationwide, FQHCs’ revenue and capacity could have increased substantially. Over time, Medicaid could play a bigger role as it becomes a more stable funding source to allow for capital investments.
  •  Section 330 grants appear to have a larger impact on access to care. Given the varying levels of reliance on Medicaid, investing through federal grants might be more effective and equitable.

Context: The Health Resources and Services Administration’s Health Center Program (HCP) plays a critical role as the national ambulatory safety net, delivering services to patients in medically underserved areas, regardless of their ability to pay. As the program has grown, health policy initiatives may have altered access to care for the underserved population. Understanding how federally qualified health centers (FQHCs) have been affected by past policies is important for anticipating the effects of future policies.

Methods: By analyzing a national data set from the Uniform Data System, we examined, using two sets of random effects regressions, the potential impact of alternative policy actions affecting FQHCs. Our primary equation models the number of full-time equivalent staff, of patients served, and of visits provided in the subsequent year as a function of Medicaid revenues, Section 330 grants, and other revenues. Our secondary equation is a difference-in-differences analysis that models Medicaid revenues as a function of the states’ status of Medicaid expansion.

Findings: The expansion of Medicaid in nonexpansion states could have increased Medicaid revenues by 138%, staffing by 25%, and patients’ visits by 24% in 2017. Compared to the impact of a “repeal” of Medicaid expansion, the percentage of reductions in staffing would be similar to those predicted by a 50% cut in Medicaid revenues or in Section 330 grants. On a dollar-for-dollar basis, the effects of one dollar of Section 330 grants were more than double that of one dollar of Medicaid revenue.

Conclusions: Both Medicaid eligibility and Section 330 funding support are important to the HCP, and Section 330 grants are particularly closely related to staffing and the provision of services. States’ decisions not to participate in or to repeal Medicaid expansion, to reduce Medicaid payment rates, and federal funding cuts all could have a negative impact on FQHCs, resulting in thousands of low-income patients losing access to primary care.

Keywords: community health centers, health services utilization, Affordable Care Act, Medicaid expansion, health reform, insurance.

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Citation:
Shiyin Jiao S, Konetzka RT, Pollack HA. Huang ES. Estimating the Impact of Medicaid Expansion and Federal Funding Cuts on FQHC Staffing and Patient Capacity. Milbank Q. April 12, 2022. https://doi.org/10.1111/1468-0009.12560