| Photo by Levi Meir Clancy on Unsplash
HARTFORD, CT — In a big win for low-income and immigrant communities, especially those relying on sliding-scale care,
Connecticut has reached a landmark agreement to boost Medicaid reimbursement rates for its 17 community health centers. It is a move that could restore vital services and stabilize care for over 440,000 residents.
Gov. Ned Lamont called the centers “a lifeline” and framed the deal as a counter to federal Medicaid cuts. Commissioner Baron Reeves said the investment positions centers to lead in value-based care and improved outcomes.
According to the Lamont administration, the agreement covers $80 million over three years, with phased-in rate increases starting October 1, 2025, based on 2023 cost data. Clinics that had cut services, like dental care in Torrington and Winsted, are now planning to reopen by early 2026. The agreement also includes a new “change in scope” process, allowing health centers to request rate adjustments based on the expansion of services.
The agreement also aligns the appeals process for federally qualified health centers (FQHCs) with other Medicaid providers by January 2027. As a result of the agreement, the Community Health Center Association of Connecticut (CHC/ACT) dropped its lawsuit threat after the deal was finalized.
The Connecticut legislature has approved the funding as part of its latest budget. The legislature’s budget includes targeted increases in Medicaid funding for health centers, part of a broader $1.2 billion spending increase in year one and $1.4 billion in year two.
“While Republicans in Congress are defunding Medicaid and raising health care costs for all Americans, here in Connecticut, we are making key investments in primary care, dental, and behavioral health,” Lamont said. “Our community health centers are a lifeline for our residents, providing care to all patients regardless of their ability to pay, and this agreement helps to provide sustainable and reliable care for those who count on them.”
The agreement to boost Medicaid reimbursement rates for Connecticut’s community health centers has a layered backstory. In March 2025, CHC/ACT filed a Declaratory Ruling Request against the Department of Social Services (DSS), citing decades of underpayment and threatening legal action. The legislature and the Lamont administration reached a deal before the session ended, incorporating the funding boost into the $55.8 billion biennial budget.
The funding increase is a game-changer for Connecticut’s community health centers — not just a budget bump, but a structural shift in how care is delivered and sustained.
“These investments will position the community health centers to lead in value-based care, improve patient outcomes, and community health,” Commissioner Barton Reeves said. “The Federally Qualified Health Centers are essential partners in delivering high quality, affordable health care to all residents. We look forward to continuing to build our partnership, with the shared goals of addressing the health care needs of Connecticut’s residents and increasing access to preventative care throughout the state.”
In response, Shawn K. Frick, CEO of the CHC/ACT, said, “We appreciate the willingness of Governor Lamont and Commissioner Reeves’s teams to continue to work with our health centers towards this agreement,” adding, “Patients across the state will benefit from this investment in primary care.”
As a result, the immediate impact of this agreement, which had previously cut dental care, is now slated to return by early 2026. Centers can begin hiring dental and behavioral health professionals again, reversing layoffs and service gaps. With Medicaid covering 60% of patients, higher reimbursements mean centers can finally cover actual costs.
The long-term effects of the agreement will help keep doors open for 440,000 residents who rely on these centers, many of whom are uninsured or enrolled in HUSKY (CT’s Medicaid). Preventive care, chronic disease management, and mental health services will become more accessible, leading to a reduction in ER visits and lower long-term costs. Sustained funding protects jobs as centers employ nearly 4,770 full-time staff statewide.
However, there are challenges ahead with Trump-era changes to Medicaid, and undocumented care access could still disrupt services. Additionally, new work requirements and documentation hurdles may shrink Medicaid rolls, even as centers prepare for expansion.
