New federal scrutiny strains NC health centers for uninsured, Triangle CEO says
.jpg "The head of a Raleigh-based community health center serving low-income patients says his organization is facing increased scrutiny when trying to access federal grants it has already been awarded.")
The head of a Raleigh-based community health center serving low-income patients says his organization is facing increased scrutiny when trying to access federal grants it has already been awarded — a shift he worries could cause delays, jeopardize patient care and strain the finances of safety-net providers like his.
Federally qualified community health centers in North Carolina serve hundreds of thousands of patients without insurance or the ability to pay, or with limited coverage. In exchange, they receive federal funding.
But now centers and other recipients of federal funding across the country “have reported abrupt new delays and barriers associated with the traditional drawdown of federal funds,” the North Carolina Community Health Center Association says.
Those changes have complicated the work of Advance Community Health and its CEO, Scot McCray.
McCray said the federal Payment Management System has “always been tedious,” with checks and balances to obtain funds.
But in recent weeks, the system has become less accessible, with reduced weekday hours. That change, first noticed in mid-February just weeks into the new Trump administration, was followed by new requirements over the last week requiring recipients to justify the drawing down of already awarded funds, McCray said.
“What we’ve seen over the last week is questions regarding why, why you are drawing down these funds,” McCray said. “There’s a certain level of narrative now that the federal government is looking for just to confirm or validate why we are drawing the funds down.”
For many health centers that rely heavily on grants, “any delays in payment can make people quite nervous,” he said.
The health center association, which represents the at least 43 federally qualified community health centers in the state, warned that “any sudden and abrupt disruptions to health centers’ ability to access every federal dollar puts the health care of over 762,000 North Carolinians (at) risk.”
And a risk to any funding stream “jeopardizes the health center’s ability to hire and retain doctors, nurses, and staff in rural communities,”said Brendan Riley, vice president of government relations and external affairs for the association. “Not only does this make it hard to plan for future expansions of services, but it threatens to actually reduce access to care.”
The centers keep people healthy and reduce hospital costs, Riley said. But they “operate on razor-thin margins to advance their mission of providing cost-effective primary and preventive care to over three-quarters of a million North Carolinians regardless of ability to pay.”
Unpredictable federal changes
The Payment Management System is managed by the U.S. Department of Health and Human Services (HHS). The News Observer submitted a request for comment through the HHS website Tuesday but did not immediately receive a response.
Challenges with the system have been flagged before.
The Trump administration in late January implemented a blanket freeze on grant funding, which prevented community health centers, Medicaid agencies and other programs from accessing the payment portal, causing delays in receiving funds in at least 10 states, with some community centers forced to shut down, PBS NewsHour reported in early February.
HHS told PBS News at the time that it understood “that some Payment Management System (PMS) users experienced technical issues.”
“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,” it said.
There have also been broader federal shifts — with the Trump administration and its Department of Government Efficiency trying to cut what they say is administrative waste, including by drastically downsizing the HHS workforce and revoking $11.4 billion in public health grants awarded during COVID-19, which would lead to the loss of millions in health funding for North Carolina (A federal court temporarily paused the grant cuts.) Congressional Republicans are also considering changes to Medicaid. And Trump’s budget officials have reportedly proposed a 30% spending reduction for HHS.
The unpredictability of federal policy decisions is putting pressure on the whole health care sector, McCray said.
Impacts of delay for Advance and other health centers
Advance, which has locations around the Triangle, uses its base grant for salaries and supplemental grants for capital projects, chronic disease management, and more. To obtain a grant, health centers already need to justify why it’s needed in a competitive application process. Federal grants also typically come with quarterly reporting requirements.
For centers that rely heavily on federal support to stay open and offer care, any funding disruption or delay can have consequences, McCray said.
With the recent changes, “what’s happening is that timing is slightly thrown off,” said McCray.
Unlike many businesses that are paid at a fixed rate during service, health centers are reimbursed later, often at negotiated rates, sometimes below the cost of care.
For any center “already running at a deficit, any ill timing or slow timing puts you further behind the eight ball, and that’s what we’re starting to see,” he said.
Advance has nearly doubled its footprint since 2021 — from six sites to 13. McCray said he currently has no concerns about care being limited at Advance.
But he expressed worry for other centers in North Carolina, especially those serving more uninsured patients or more patients paying on a sliding scale based on income.
Advance receives 10% of its budget from federal grants, with the rest from patient services, copays, and billing, though it must treat all patients regardless of ability to pay, McCray said. About 45% of its roughly 9,000 monthly patient visits are uninsured.
Funding delays threaten uninsured patients with few care options, McCray said.
“We’re talking about small business owners. We’re talking about the guy that owns the hardware store who has three kids,” he said.
“We have been the solution for small businesses,” he said. “We’ve been a partner with the county; we’ve been a partner with school districts. So the landscape and the breadth and depth of our impact, I think, gets overlooked, but these unknown situations that are happening, and some of what I would call the arbitrary shift and changes from day to day coming from the federal government is going to really impact communities.”
This story was originally published April 29, 2025 at 2:17 PM with the headline "New federal scrutiny strains NC health centers for uninsured, Triangle CEO says."
