WASHINGTON -- The Health and Human Services Department says it will extend an agreement to direct Medicare and Medicaid funds to local community health centers, a decision that will benefit thousands of low-income patients.

An original funding agreement for what is called the Gateway to Better Health Demonstration Project was made in 2002 to redirect money that went to the St. Louis Regional Hospital, which closed.

Rep. William Lacy Clay, D-St. Louis, who had pushed for the extension, said that it would provide up to $25 million for local health centers until 2014.

The original agreement had expired June 30 but the flow of money had not been interrupted.

"Had we not been successful, lcoal emergency rooms would have been overwhelmed with uninsured and underinsured patients," Clay said in a statement.

The extension affects ten acute care community clincs in the St. Louis area.

Alan Freeman, president and CEO of Grace Hill Neighborhood Health Centers, said that denial of the application "would have dealt a devastating blow to the health-care safety net in our city."

Robert Fruend, CEO of the Regional Health Commission, said that the HHS funds in question amount to a quarter of clinic budgets. 

"Without this waiver, we would have seen 25 percent capacity go away," he said. "Folks wouldn't have been able to access their primary care physicians. Wait times would have extended and emergency rooms would have had 200 more visits a day. It would have been a disaster."