In West Virginia, a nonprofit mental health program for teenage girls is turning to a private donor to help cover its expenses. Three Virginia health clinics have shut their doors. And a network of health centers in rural Mississippi is facing a deficit of $500,000 and may have to scale back services.
Across the country, health clinics and nonprofit organizations largely serving rural and low-income patients have found themselves unable to access previously allocated federal funds, as a short-lived government funding freeze has continued to disrupt daily operations for a range of programs.
The disruption appears to stem from a vaguely worded, two-page memo the Office of Management and Budget sent to all federal agencies early last week directing them to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance” that could conflict with President Donald Trump’s agenda.
A judge quickly blocked the action last week, and the Justice Department said in a filing Wednesday that agencies are working through the process of issuing all appropriate funding disbursements. But some organizations say they are still unable to access money they urgently need to pay for salaries, utilities, supplies and other expenses — threatening their ability to continue operating in their communities.
“We are continuing to hear from nonprofits that are unable to access the funding that they need to continue their programs and to continue paying their staff,” said Diane Yentel, CEO of the National Council of Nonprofits, which was part of a lawsuit filed to block the funding freeze. “It’s clear that the confusion and the chaos that the directive unleashed hasn’t ended, despite it being rescinded and despite the temporary restraining orders from two different courts.”
Yentel said much of the funding that the groups are unable to access is coming from programs administered by the Department of Health and Human Services (HHS). While some organizations haven’t had any issues withdrawing their funds since the memo directing the funding freeze was rescinded, dozens of others have been unable to draw down money from the web payment system that manages their federal grants.
A spokesperson for HHS acknowledged that some grant recipients have experienced issues accessing their federal funds and attributed the delays to technical issues the agency’s website has been having. A high volume of requests has come in since the website was temporarily offline last week following the funding freeze.
HHS is working to “help expedite resolutions as quickly as possible,” the spokesperson said in a statement.
Health clinics and nonprofits serving low-income patients say there is little wiggle room in their budget to cover their costs without federal assistance.
Community health centers, also known as federally qualified health centers, rely on federal grants for part of their funding in order to provide medical care, dental, behavioral health and substance use disorder services to more than 32 million Americans. That makes for 1 in 5 rural Americans and 1 in 3 people living in poverty, according to the National Association of Community Health Centers.
In Virginia, 11 of the state’s 31 community health center operators were still unable to access their funding as of Thursday morning, said Joe Stevens, a spokesperson for the Virginia Community Healthcare Association. One of those providers has had to close three of its clinics in Richmond and has been directing patients to its other locations. Another clinic in rural southwestern Virginia is at risk of cutting back services or closing if its funding doesn’t come through in the next two weeks, said Stevens.
“If a health center closes in rural Virginia, for many people that is their primary source of health care, there are no hospitals nearby, no emergency centers nearby,” said Stevens.
During his confirmation hearings, Robert F. Kennedy Jr., Trump’s nominee for secretary of health and human services, said, “I strongly support community health centers, as does the president.” But Democrats including Sen. Mark Warner of Virginia criticized Kennedy for how he responded to questions about those programs, with Warner saying Kennedy “seemed confused.”
Several clinics in Maine, Nebraska, Illinois and Michigan have also been unable to draw down funds from the federally run website they use to access the money, according to Advocates for Community Health, an advocacy group for community health centers.
“While we don’t have an answer for the reasoning behind it, we do know that health centers cannot afford to wait, and it is critical that Congress and [the Health Resources and Services Administration] get to the bottom of it,” said Amanda Pears Kelly, CEO at Advocates for Community Health. “Health centers in Virginia have already been forced to close their doors and cancel patient appointments this week because they are unable to access payments, and we fear that more closures and furloughs are on the way.”
In Mississippi, Delta Health Center, which operates clinics across the Mississippi Delta region, is waiting for nearly $500,000 in federal funds to be released to reimburse its clinics for expenses, including salaries. If the money isn’t made available soon, the clinics may be faced with a “potential disruption of services,” said Robin Boyles, chief programming planning and development officer of Delta Health Center, which is the country’s first rural community health center.
The Community Health Center Association of Mississippi said last week that 21 centers were locked out the system where they draw down funding.
In Alabama, Dr. John Waits, CEO of Cahaba Medical Care, which serves parts of the Birmingham area along with more rural parts of Alabama, said he went into “crisis management” mode last week as the initial news of the federal funding freeze spread.
The federal money he needed to make payroll wasn’t available by 5 p.m. last Friday. About 30% of his program’s funding comes from federal grants. The organization had to tap into its reserve funds to make its roughly $3.5 million payroll for 610 employees before the federal funding eventually became available again on Tuesday.
“It’s extremely scary to have to receive an email saying all your funding for the entire organization is in jeopardy if you don’t get in compliance with XYZ,” he said. “But as the dust has settled, I’ve tried to keep our team calm, and say, ‘nobody’s going to lose their job.”
Elena Nicolella, head of the Rhode Island Health Center Association, said health clinics in her state have seen rolling issues since last week’s funding freeze. On Thursday morning, the website used by the clinics to access funds was inaccessible, before it came back online in the afternoon.
It wasn’t until Thursday evening that all of the health centers in Minnesota had received access to their funding, but organizations remain anxious about what could come next, John Watson, CEO of the Minnesota Association of Community Health Centers, said.
“At this point, we are all good, we have access, but we are extremely anxious moving forward because of the roller coaster we have been on,” said Watson.
The disruptions have stretched beyond health clinics to nonprofits that provide mental health and other supportive services. In West Virginia, the nonprofit organization Libera has been unable to access funds from an HHS grant to help pay for mental health support groups and resources for middle school girls, said Karen Haring, Libera’s executive director.
The organization requested the funds last Thursday and expected them to be available on Friday. A week later, the money still hadn’t been released, and the website portal wasn’t accessible on Thursday morning. Haring said she’s reached out to a private donor to help cover the costs for staff, training and other resources until the federal dollars are available.
“As you can imagine, that makes us very confused and uncertain. We don’t know what’s happening. We don’t know why the website is down, we don’t know why we haven’t received our payment,” said Haring. “These federal grants typically work on reimbursement so you spend the money, then you submit your payment request, and then you get reimbursed. We are very concerned that we may not get those.”
