The applications poured in, spurred by millions of dollars in new funding included in the health law to expand primary care to the poor. A record 810 groups sought federal grants to staff and equip hundreds of new and existing community health centers.

But in August, most were rejected, leaving advocates frustrated that they would not be able to serve the growing numbers of uninsured and poor people, or be ready for an influx of patients under the health law.

Rather than handing out $250 million to establish new patient care sites to serve more than 2 million additional people as originally expected, the Obama administration gave $29 million to 67 nonprofit organizations that will serve an additional 286,000 patients.

The funding cut was a result of a federal budget compromise in March to keep the government open. That agreement reduced federal spending by nearly $80 billion, including a $600 million trim in funding for ongoing operations at existing health centers.

To make sure current centers did not have to reduce services, the Obama administration diverted some of the $11 billion set aside in the health overhaul law for health center expansion initiatives and instead used it to keep the existing centers operating at current levels.

But a casualty of this strategy was that some of the health center expansion plans were either eliminated or drastically cut back.

In addition, to free up money to help with existing operations, the administration scrapped plans to distribute $335 million to health centers to boost medical, dental, pharmacy and vision services.

Advocates are concerned that future congressional spending cuts could slow efforts to build health center capacity by 2014, when the health law will begin expanding coverage to 32 million uninsured. “Now the whole process has been set back,” said Dan Hawkins, senior vice president at the National Association of Community Health Centers.

The situation highlights the trickle-down effect of Washington’s deficit cutting on local communities. Those efforts are being revved up this fall as the congressional “super committee” looks for ways to cut the federal budget by more than $1.2 trillion in the next decade.

At the local level, the lack of funding means:

–A dental exam room at FoundCare Health Center in West Palm Beach, Fla., will remain unused four days a week because there’s no money to hire a dentist.

— Low-income residents of Chattooga County in northwestern Georgia will still have to travel about 45 miles to the nearest community health center without help of any public transportation.

— Triad Adults and Pediatrics in Greensboro, N.C., may face a repeat of last winter when more than 700 adult patients were put on a months-long waiting list for care and the center had to stop taking new pediatric patients because of a lack of doctors.

— Heartland Community Health Center in Lawrence, Kan., will have to continue to tell patients they must wait at least two months for an appointment.

“When the money first became available, a lot of community organizations said here’s a golden opportunity, let’s try to take advantage,” said Heartland CEO Jon Stewart. “But like many others, we were shocked not to be awarded a grant.”

Heartland and the more than 700 community health centers that were turned down lost more than a one-time grant. The grant would have also allowed them to as much as triple their Medicaid reimbursement and qualify for operating funds in future years.

Health center officials are concerned the cuts in expansion funding could happen again as Congress moves to hold down federal spending and lower the federal deficit. Hawkins said many of the health centers that were turned down remain skeptical about the possibility of getting future dollars to expand.

“We are now one year closer to 2014 when all the new coverage expansion kicks in,” Hawkins said. “But where are those people going to go to get care. We need to make sure they have a place to go.”

Sen. Ron Wyden, D-Oregon, also is worried if plans to expand community health centers get scaled back. “I believe (community health centers) provide an incredibly important service to patients in my state and across the country and they need to be funded now if we expect them to provide a continuum of care when the health care law is fully implemented in 2014,” he said.

The Health Resources and Services Administration, the federal agency that oversees community health centers, said future expansion plans remain tentative because of concerns that Congress may again cut annual funding for health centers.

Expanding funding for community health centers in the past decade has been one of the few health policy areas Republicans and Democrats agreed on. President George Bush’s administration doubled funding for community health centers, enabling the creation or expansion of 1,297 clinics.

Serving nearly 20 million people today, community health centers are often the main primary care safety net for the uninsured and people on Medicaid. Unlike private physician offices and urgent care clinics, the centers accept patients regardless of their ability to pay.

The Obama administration says the centers will play a key role in making sure those who gain coverage from the law will have a place to get care. That’s why the health law included the $11 billion for the centers to be spent by 2015, mostly to open new sites and expand services at existing locations.

Health advocates in Reading, Pa., saw the funding as way to staff the city’s first health center. The community already had a building — a hospital’s urgent care center. “It was initially a substantial amount of money, and that energized us and we felt we might have a good chance to establish a site here,” said Gary Rightmire, co-chairman of an effort to bring a health center to Reading.

But Reading was turned down. That means the closest community health center is 30 miles away with no public transportation to get there. 

Federal health officials said the number of applicants seeking health center funding was twice as many as ever before.

Primary Health Care Centers, a nonprofit community health center that serves 10 counties in northwestern Georgia, said it had been gearing up to establish a new satellite clinic for three years and had received state and foundation funds to help with the start-up. “This is extremely upsetting to everyone,” said CEO Dianna Allen. The new site, which will not be built now, would have served at least 3,000 patients in the first year, she said. 

In Greensboro, Triad Adult and Pediatric Medicine CEO Brian Ellerby said not securing the additional federal money was especially difficult because the county recently cuts its funding by half. He said the lack of doctors and other clinicians means patients who can’t get appointment will either forgo care or use hospital emergency rooms. “We understand why the cuts were made, but we are the ones who suffer,” he said.

It’s been nearly three years since FoundCare in West Palm Beach opened its doors in a county where nearly one in three people are uninsured. The facility won a $190,000 federal grant a year ago to equip its exam rooms.

But officials had hoped to get an expansion grant to hire another family physician and a dentist and to add optometry and behavioral health services. Right now less than half of the facility’s 16 exam rooms are used. Patients have to book appointments at least two months out. The center has a pediatric dentist one day a week but no adult dental care.

“We thought we did everything that could have been done,” said FoundCare CEO Yolette Bonnet. “We can do so much more but because of what going on with funding, we are not able to.”