An act to amend the public health law, in relation to federally quali-
fied health center rate adequacy
Requires the Department of Health to analyze and update federally quali-
fied health center (FQHC) rates that are over two decades old.
Section 1 amends Public Health Law 2807(8)(b), which authorizes feder-
ally qualified health center (FQHC) reimbursement rates, to implement an
updated methodology to ensure that the two-decade old rates are updated
to reflect actual costs incurred by FQHCs by extending the twelve month
period into 2025. After September 13, 2025 the operating costs will be
calculated using existing metrics.
Section 2 amends Public Health Law 2807(8) to require the Department of
Health (DOH) to analyze historical FQHC cost data as well as related
factors to set an adequate rate; eliminate arbitrary caps on rates,
subject to federal financial participation.
Section 3 provides an immediate effective date.
Federally qualified health centers (FQHCs), also known as community
health centers (CHCs), are located in medically underserved neighbor-
hoods, providing quality and affordable healthcare services to all,
regardless of immigration status, insurance coverage, or ability to pay.
CHCs are a critical safety net for quality health care services, partic-
ularly for low-income communities and communities of color. Among CHC
patients, 89% are low-income, 68% are Black, Hispanic/Latinx, or other-
wise people of color, 13% are uninsured, and nearly 60% of CHCs'
patients are enrolled in Medicaid, CHIP, or are dually enrolled in Medi-
care and Medicaid.
CHCs deliver a full spectrum of services, including many social care
supports, such as housing, transportation vouchers, and food, many of
which were never envisioned when the CHCs' base rate was developed over
20 years ago. Current rates are actually based on costs from 1999 and
2000. These reimbursement rates are the oldest cost-based rates, among
all New York State Medicaid provider types. CHC rates are further
suppressed by arbitrary rate ceilings regulatorily imposed by the
Department of Health. Costs today for personnel, benefits, equipment,
medical supplies, and office space are all significantly higher than
they were decades ago and have risen exponentially since the pandemic.
Adding to the inadequacy of these outdated rates is the onset of more
widely used health care delivery modes such as telehealth, further driv-
ing down the ability of rates to meet contemporary cost pressures. The
outdated reimbursement methodology for CHCs does not account for the
current model of comprehensive primary care including behavioral health
services, oral health services, reproductive health services, and
services addressing social needs. CHCs are also experiencing
unprecedented workforce attrition and workforce shortages that are
affecting operations. CHCs' insufficient reimbursement rates undermine
their ability to engage in long term sustainability and expansion plan-
ning, limiting access to care.
This legislation will ensure that the Department of Health evaluates and
implements updated payment rates to sufficiently account for increases
in operation costs and the new, expanded model of health and social care
that is the hallmark of community health centers.
New bill

Statutes affected:
S6959: 2807 public health law, 2807(8) public health law
S6959A: 2807 public health law, 2807(8) public health law