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By Monica Sager
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Following an order by the Office of Management and Budget (OMB) to freeze grants and loans, some of the community health centers in Virginia have been forced to close their branches.
"The National Association of Community Health Centers continues to actively monitor and respond to reports of Community Health Centers experiencing delays in drawing down grant funds," Amy Simmons Farber, the associate vice president of communications and public relations, told Newsweek. "Our ongoing engagement with bipartisan Congressional leaders and the Trump administration focuses on maintaining stable funding for the Health Center Program, which provides essential care to 32.5 million Americans."
Newsweek reached out to the Virginia Community Healthcare Association and the Department of Health and Human Services via email for comment.
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Why It Matters
On January 27, the acting director of the OMB, Matthew Vaeth, issued a memo titled "Temporary Pause of Agency, Grant, Loan and Other Financial Assistance Programs," which required federal agencies to temporarily pause "all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by [President Donald Trump's] executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal."
In 2021, the U.S. government provided nearly $1.3 trillion to state and local governments through federal grants, according to USAFacts.
What To Know
About 400,000 Virginia residents rely on community health centers, according to the Virginia Community Healthcare Association. The state has 31 federally qualified health centers, encompassing over 200 locations. The sites provide primary health, behavioral health, dental, pharmaceutical and substance abuse care to people with Medicaid and Medicare. They also help people with private insurance on a sliding fee scale.
As of January 28, the morning after Vaeth's memo, almost half of the federally qualified health centers could not access federal funds to pay employees, Virginia Community Healthcare Association spokesperson Joe Stevens told VPM News.
"We're trying to get those answers as we speak," Stevens said, explaining why some sites are affected while others still have access.
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The Court Case
On January 28, the day after Vaeth's memo, the National Council of Nonprofits, the American Public Health Association, the Main Street Alliance and the SAGE filed a suit against the OMB and its acting director in the U.S. District Court for the District of Columbia.
The court case, reviewed by Newsweek, called Vaeth's memo "devoid of any legal basis or the barest rationale" but noted that it will "have a devastating impact on hundreds of thousands of grant recipients who depend on the inflow of grant money (money already obligated and already awarded) to fulfill their missions, pay their employees, pay their rent—and, indeed, improve the day-to-day lives of the many people they work so hard to serve."
The health groups said that the Trump administration is at liberty to push forward its own priorities but that it "must do so within the confines of the law."
"It has not," the case reads. "The Memo fails to explain the source of OMB's purported legal authority to gut every grant program in the federal government; it fails to consider the reliance interest of the many grant recipients, including those to whom money had already been promised; and it announces a policy of targeting grant recipients based in part on those recipients' First Amendment rights and with no bearing on the recipients' eligibility to receive federal funds."
The court granted a temporary block to the order on Monday.
Dozens of state attorneys general have also filed lawsuits against the administration.
The White House's Response
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On January 29, the White House budget office withdrew an order to freeze federal grants.
"In light of the injunction, OMB has rescinded the memo to end any confusion on federal policy created by the court ruling and the dishonest media coverage," White House press secretary Karoline Leavitt told Newsweek at the time. "The Executive Orders issued by the President on funding reviews remain in full force and effect and will be rigorously implemented by all agencies and departments."
Leavitt suggested that Trump's executive actions would "effectively end" the court case.
"This action should effectively end the court case and allow the government to focus on enforcing the President's orders on controlling federal spending," Leavitt said. "In the coming weeks and months, more executive action will continue to end the egregious waste of federal funding."
The move of withdrawing the order does not halt the intended freezing of money. It does, however, end the federal injunction.
Other States Facing Issues
In Kansas, chief executive of KC CARE Health Clinic Wil Franklin said the freeze affected $5 million that his clinic relies on, as reported by The Wichita Beacon. Franklin's clinic has cash reserve to help for a few months, but he said some of his colleagues at other community health centers are less fortunate.
Kansas received $2,750 in federal funding per person, according to USAFacts.
In Minnesota, KARE-TV reported that centers are waiting for guidance. The state relied on federal funding 14.6 percent of the time, according to USAFacts. The centers serve roughly 170,000 people each year.
"The attempt to just shut down our funding, whether it be the international work we do outside the United States, or to shut down the funding to our clinics across the United States, has just been catastrophic for us," Dr. Simon Adams, the president and CEO of the Center for Victims of Torture told KARE-TV.
"Since those orders came out on Friday evening and then were followed up by new orders on Monday and Tuesday, we've had to furlough about 75 percent of our staff. That's literally hundreds and hundreds of people, including jobs in Minneapolis, St. Paul, jobs in St. Cloud, jobs all across the United States, and jobs in other countries around the world."
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The Massachusetts League of Community Health Centers' staff told The Boston Globe that the orders hold no water.
"We have signed grant agreements," said Shade Cronan, a spokesperson for the league. "It's one thing to put restrictions on money going forward, but this is money that's been encumbered."
What People Are Saying
Amy Simmons Farber, the associate vice president of communications and public relations at The National Association of Community Health Centers, told Newsweek: "As critical primary care providers operating with minimal financial margins, CHCs require consistent, reliable funding to deliver vital primary care services and meet their communities' health care."
Joe Stevens, a Virginia Community Healthcare Association spokesperson, told VPM: "They use a majority of that funding for salaries, and without that funding, they can't pay their employees. Without employees getting paid, they can't operate their health centers, so it's a domino effect."
The Capital Area Health Network, which operates seven federally qualified health centers around the greater Richmond, Virginia area, sent an email to patients Tuesday: "Due to unforeseen federal restrictions under the new Presidential administration we were forced to consolidate our operations last week."
Wil Franklin, chief executive of KC CARE Health Clinic, told The Wichita Beacon: "It is very frightening for the health care workforce in FQHCs."
Minnesota Association of Community Health Centers CEO Jonathan Watson told KARE-TV: "I would characterize it as a roller coaster. It's just creating a lot of angst and anxiety in our communities."
House Minority Leader Hakeem Jeffries said in a letter last week: "Millions of Americans will be hurt. By necessity, we will combat the extreme funding freeze with a forceful response on all fronts."
What Happens Next
It is not immediately clear what will be impacted federally, although there is an exception for funding and grants paid directly to American citizens.
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