HHS Rule Change May Affect Health Center Revenue and Patient Access

A new interpretation by the U.S. Department of Health and Human Services (HHS) could restrict access to federally funded programs—including the Health Center Program—for individuals without lawful immigration status. The move rescinds a 1998 interpretation of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) and reclassifies several programs, including community health centers, as “Federal public benefits.”

The change is designed to align with HHS’s current reading of PRWORA, which restricts access to certain federal benefits based on immigration status. According to HHS, this action restores compliance with federal law and ends decades of administrative policy that the agency now says allowed benefits to be provided beyond Congressional intent.

The potential implications for Federally Qualified Health Centers (FQHCs) are significant. Health centers are mandated by federal statute (42 USC 254b(a)(1)) to serve all area residents regardless of ability to pay or immigration status. The National Association of Community Health Centers (NACHC) issued a response noting that the HHS interpretation contradicts federal law and could undermine health centers’ ability to serve their full patient population, now estimated at more than 32.5 million nationally.

Financial and Operational Risk

If enforced, this policy may reduce patient volume and revenue for FQHCs in states with high immigrant populations. The financial risk is compounded by the deeply human cost of limiting care access for individuals who have long relied on health centers for essential services. Many health centers may face the prospect of turning away patients they are committed to serving—an outcome that challenges both operational continuity and organizational values.

Health centers may also encounter complications related to grant compliance, budgeting, and long-term planning. Now is the time to begin scenario planning. AAFCPAs advises that health centers assess how their programs and revenue mix could shift under different enforcement scenarios. This includes:

• Financial modeling based on expected volume changes
• Medicaid revenue forecasting tied to state enrollment trends
• Evaluation of how changes in patient mix and Medicaid concentrations may impact other departments, such as pharmacy, optometry, etc.

We are closely monitoring regulatory developments and can assist clients with data-informed planning to help sustain operations, maintain compliance, and continue fulfilling their mission of care. NACHC is also working with legal and policy experts to assess the implications of this shift and continues to advocate for CHCs’ ability to serve all area residents, in alignment with federal law.

How We Help

AAFCPAs has served the healthcare community for more than 50 years, providing financial, operational, and regulatory insight to support long-term stability. Our multidisciplinary team advises FQHCs, behavioral health providers, nursing homes, senior care organizations, home care agencies, and private practices on how to adapt to changing funding structures, optimize reimbursements, and strengthen internal controls.

We offer integrated, proactive support from experienced CPAs, consulting tax attorneys, fractional CFOs and controllers, business process and systems architects, data analysts, and IT security professionals. We help health centers respond to evolving federal requirements with informed strategies—such as financial modeling, provider productivity analysis, and scenario planning—to support their mission and decision-making.

These insights were contributed by Charles Webb, CPA, CHFP, Partner and Courtney McFarland, CPA, MSA, 340B Apexus Certified Expert™, Partner. Questions? Reach out to our authors directly or your AAFCPAs partner. AAFCPAs offers a wealth of resources on healthcare consulting and reimbursement. Subscribe to get alerts and insights in your inbox.