I just returned from my 40th Policy & Issues Forum hosted by the National Association of Community Health Centers in Washington, D.C.
Forty P&Is gives you some perspective.
There were the usual speeches. The usual applause lines. And this year, a record-breaking funding increase passed through the Consolidated Appropriations Act.
The funding increase is real.
But it is not a rescue.
As I told Jill Steeley on her recent episode of Community Health Collective, 90% of your revenue does not come from HRSA. That 90% still has to be earned.
If you weren’t in DC last week, here’s what actually matters as you head back to your desk.
Listen to the Podcast Episode About This Topic 🎧
Straight from the Hill: What the NACHC P&I Forum Means for Your Health Center
In this episode of Community Health Collective, Steve Weinman shares what he heard during his 40th National Association of Community Health Centers Policy & Issues Forum — from the formal presentations to the quieter conversations with Health Resources and Services Administration leadership and industry vendors.
The discussion covers what the record-breaking funding increase actually changes (and what it doesn’t), the 2% program-wide financial loss, the evolving 340B landscape, workforce shortages, Medicare growth opportunities, OSV cycle changes, and the vendors worth paying attention to.
👉 Listen to the full episode (or, if you prefer, listen on Spotify)
The Funding Snapshot: What Was Passed
Let’s start with the facts.
$4.6 billion in mandatory funding — a net increase of roughly $300 million (record-breaking)
$350 million for the National Health Service Corps (essentially flat)
$175 million for the Teaching Health Center program (up $50 million) with a new 4-year funding commitment
Funding extended through the end of the calendar year, giving us an extra quarter of certainty
That’s helpful.
But helpful and stable are not the same thing.
Financial Sustainability Is an Internal Issue, Not a Policy Problem
One pattern we’ve consistently seen is the assumption that financial strain is driven primarily by external forces beyond a health center’s control.
In reality, many health centers have built their entire operating models around systems that were never designed to provide long-term sustainability. When instability appears — as it inevitably does — those models leave little room to adapt.
As discussed in the podcast:
“The real problem isn’t funding instability itself. The real problem is that we have built our health centers and our entire business models on a system that was never meant to keep us sustainable.”
That framing matters. It shifts the conversation away from reacting to external events and toward examining internal structure — which is where leadership teams actually have influence.
Why Grant Dependency Isn’t the Root Problem
Grant funding plays an important role in the safety net. The issue isn’t that grants exist — it’s how central they become to an organization’s survival.
When a health center’s underlying business model is built on the assumption that grants will always be required to close the gap, dependency becomes the outcome. Over time, the organization adapts to manage scarcity rather than build margin, flexibility, and long-term resilience.
In that sense, grant dependency is a symptom of a deeper structural issue — not the root cause itself.
Three Business Model Patterns That Keep Health Centers Stuck
Across the health centers we work with, three patterns appear again and again — and they are reinforced in the podcast conversation as well.
1. Treating Grant Dependency as Inevitable
Somewhere along the way, many health centers accepted the idea that serving underserved populations requires permanent financial fragility. That belief constrains strategic thinking and narrows what leaders believe is possible.
2. Managing Symptoms Instead of Fixing the Revenue Model
When pressure mounts, organizations often respond by freezing hiring, delaying investments, or cutting programs. These actions may buy time, but they don’t address the underlying revenue model — keeping centers in a cycle of crisis management.
3. Operating in Silos Instead of Learning from Peers
Too many leadership teams are solving the same problems independently. Operating in isolation wastes time, resources, and momentum — especially when proven approaches already exist elsewhere in the field.
A Real-World Example of Financial Resilience
The podcast discussion includes the experience of PureView Health Center during one of its most difficult periods: a million-dollar deficit, negative press about layoffs, five years without recruiting a medical doctor, and a 12-month ultimatum from the board.
Through deliberate changes to the organization’s revenue model, leadership approach, and assumptions about what was possible, the health center reduced its federal funding dependency from 62.5% to 17% — while serving more uninsured patients, expanding services, and building financial reserves.
This outcome wasn’t the result of waiting for policy stability. It came from rethinking the foundation the organization was built on.
The 2% Loss No One Is Talking About
While everyone celebrated the funding increase, the community health center program posted a 2% program-wide financial loss for 2025.
That should give leaders pause.
A 2% loss across the program signals structural strain. When margins are thin, even modest shifts in productivity, payer mix, or workforce costs can destabilize an organization quickly.
Funding buys time.
It does not fix business model weaknesses.
The Real Story on 340B
The 340B rebate program is not dead.
It’s being reconstituted.
That’s an important distinction.
New reporting requirements are likely coming, and they may show up in next year’s UDS cycle. Leaders would be wise to review their 340B programs now, not when HRSA flags something.
When good news dominates the headlines, quieter structural changes often move underneath.
Workforce: The Bigger Storm
The projected national shortages are staggering:
70,000 primary care physicians
350,000 nurses
500,000 behavioral health providers
That’s not a short-term inconvenience. That’s a long-term constraint.
The Teaching Health Center program’s new 4-year funding commitment is meaningful. It gives recruiting efforts more predictability.
But the broader workforce crisis isn’t going away. Health centers that do not address productivity, recruitment strategy, and retention proactively will struggle — funding increase or not.
The Medicare Opportunity Most Centers Ignore
There is an untapped traditional Medicare opportunity sitting in plain sight.
Many centers focus almost exclusively on Medicaid and dual eligibles. Meanwhile, traditional Medicare patients are often underserved in local markets.
Strengthening Medicare strategy is not about abandoning mission.
It’s about stabilizing margin so you can sustain mission.
HRSA’s Tone on Low Performance
There were no dramatic pronouncements about forced mergers.
But the tone was clear.
Sustained underperformance is drawing attention.
If your compliance systems are weak, if your productivity is lagging, if your financial trends are deteriorating — do not assume you can fly under the radar indefinitely.
The expectation is that leaders use this funding window to stabilize operations.
OSVs and Reviewer Compensation
OSV cycles are changing.
At the same time, there is discussion of a 25% pay cut to site reviewers.
If experienced reviewers leave the pool, the quality and consistency of site visits may shift. That makes preparation even more important.
Do not wait for your next OSV to discover preventable compliance issues.
AI: Some Real Value, Plenty of Hype
The exhibit hall was full of AI vendors.
A few were impressive. Some tools genuinely improve operational efficiency.
Others were simply marketing noise.
Technology can enhance strong systems. It cannot compensate for weak leadership discipline.
What To Do Right Now
If you’re back at your desk wondering what this all means, here’s where I would focus:
Get ahead of compliance before HRSA flags it
Review your 340B program proactively
Build a strategy to recruit traditional Medicare patients
Examine provider productivity honestly — and address gaps
Invest in operational efficiency before cutting headcount triggers a downward spiral
If you have an OSV coming up, prepare carefully
There is always a way out.
And it doesn’t have to involve cutting your way into a corner.
The funding increase is helpful.
But it does not change the fundamentals.
The 90% of your revenue that doesn’t come from HRSA still has to be earned. Workforce constraints are real. Compliance expectations are not loosening. And structural weaknesses do not fix themselves simply because Congress passed a larger number.
The health centers that use this window to strengthen operations will be fine.
The ones that assume the funding increase solves their problems will likely find themselves back in crisis mode sooner than they expect.
If you want the full, unfiltered conversation about what was actually said at P&I — not just from the podium, but in the hallways — you can listen to the episode here:
Listen: Straight from the Hill — What P&I Really Means for Your Health Center
👉 Listen to the podcast episode: Straight from the Hill: What the NACHC P&I Forum Means for Your Health Center (or listen on Spotify)
At FQHC Associates, we’ve always believed that stability comes from operational discipline — not from waiting on the next funding cycle. The funding increase is helpful, but long-term sustainability depends on how leadership teams respond in moments like this.
Conversations like this are meant to help you think a step ahead.
Continuing the Conversation for Health Center Leaders
Jill and I heard from many of you who were traveling last week and weren’t able to attend our free webinar for health center leaders “Why Dwindling Grant Money & Government Dysfunction Might Be the Best Thing That’s Ever Happened to Your Health Center…".
Given the level of interest — and the importance of the moment — we’ll be hosting this conversation over the next several Fridays, at 12 PM PST / 3 PM EST.
Each session will focus on what the recently approved funding actually means operationally, and how leadership teams can use this window to strengthen financial stability rather than simply extend existing vulnerabilities.
If you’d like to go deeper into the practical implications — and what to do right now — we encourage you to join us.
👉 Register here and we hope to see you there!
About the Author
Steven D. Weinman, MBA, Principal at FQHC Associates
During his time as a management and IT consultant for Coopers & Lybrand (now PwC), Steve became proficient in designing and programming complex business software systems. In 1984 he was recruited by a small Community Health Center (CHC) in Southwest Florida to revive it’s failed first attempt at automation. After creating and implementing a Practice Management (PM) system, he advanced from IT director to CFO, where he grew the $3 million, single site FQHC into a more than $30 million program. When Mr. Weinman retired in 2013 to devote his full time to a growing consultancy, he was serving as Executive VP/COO with over 300 employees (all except the CEO), 13 sites, a Ronald McDonald Care Mobile, a dental residency program and a wholly owned Medicaid Health Plan.
In addition to his employment, Mr. Weinman has been actively involved in the national CHC movement since 1988. He brings extensive experience in board training, strategic planning, IT, grant writing, staff development and a host of other services to CHCs and Primary Care Associations (PCAs) across the country. As a noted expert in topics including finance, operations, managed care, IT and governance, Mr. Weinman is in great demand as a speaker at national CHC and state PCA conferences. In addition, he has authored numerous articles, issue briefs and blog posts. Mr. Weinman is particularly well known for his work with FQHC Medicare/Medicaid policy and strategy, the 340B Drug Program and development of FQHC focused integrated delivery systems.
To read blog posts by Steven, click here.
To contact Steven, send him an email at SDWeinman@FQHC.org.
