Federally Qualified Health Centers (FQHCs) and the Health Center Program
If you are looking for a Federally Qualified Health Center in a rural area, you can search by address, state, county, and/or ZIP code at Find a Health Center.
Federally Qualified Health Centers are important safety net providers in rural areas. FQHCs are outpatient clinics that qualify for specific reimbursement systems under Medicare and Medicaid. They include Health Center Program award recipients and look-alikes, and certain outpatient clinics associated with tribal organizations.
Approximately 1 in 5 rural residents are served by the Health Center Program, according to the Health Resources and Services Administration (HRSA) Bureau of Primary Health Care (BPHC). How to Become a Health Center explains that health centers:
- Provide a set of comprehensive, high-quality primary care and preventive services regardless of patients' ability to pay.
- Employ interdisciplinary teams and patient-centric approaches.
- Deliver care coordination and other enabling services that facilitate access to care.
- Collaborate with other providers and programs to improve access to care and community resources.
- Are community-based and patient-directed.
HRSA's Bureau of Primary Health Care (BPHC) Health Center Program Compliance Manual provides additional information on Health Center Program requirements.
There are several definitions that should be understood related to health centers, even though there is much overlap:
- Health Center Program
- Health Center Program Award Recipient – A health center that receives grant funding from the HRSA Bureau of Primary Health Care under the Health Center Program, as authorized by Section 330 of the Public Health Service (PHS) Act. Most awards provide support for the provision of comprehensive primary care services to underserved communities (or service areas) and specific underserved populations as mandated in the Section 330 authorization, such as migratory and seasonal agricultural workers, persons experiencing or at risk for homelessness, and residents of public housing.
- Health Center Program Look-Alike – A look-alike is a health center that has been designated by HRSA as meeting all the Health Center Program requirements but does not typically receive award funding under the Health Center Program.
- Federally Qualified Health Center (FQHC)
An FQHC is an outpatient clinic that qualifies for specific reimbursement under Medicare and Medicaid. FQHCs include Health Center Program award recipients and look-alikes as well as certain outpatient clinics associated with tribal organizations. Note that different rules may apply to outpatient clinics associated with tribal organizations who enroll in Medicare or Medicaid as FQHCs.
- Health Center
A non-specific term that does not identify whether a health facility is a Health Center Program award recipient, a health center look-alike, or an FQHC.
For the remainder of this guide, the term “health centers” will be used to refer to Health Center Program award recipients, look-alikes, and FQHCs.
If you are interested in becoming a health center, see How to Become a Health Center and So You Want to Start a Health Center?. The Health Center Resource Clearinghouse also hosts free technical assistance resources and information to support community health center operations, including websites, publications, databases, webinar recordings, and other materials.
Frequently Asked Questions
- What are the benefits of FQHC status?
- What are the benefits of being a Health Center Program award recipient or look-alike?
- What is the Health Center Program?
- How does a health center become certified as an FQHC?
- Where can I find statistics on health centers?
- How do I apply for a Health Center Program grant?
- Are Health Center Program awards granted on a competitive basis?
- Which special populations can be served by healthcare organizations applying for funding through Section 330 of the Public Health Service Act?
- What are school-based health centers and how would I set one up?
- Can a for-profit clinic be a health center?
- Is a board of directors required?
- Are there location requirements for health centers?
- Are there specific staffing requirements for health centers?
- What types of services do health centers provide?
- Are there minimum hours that a health center must be open?
- Is a sliding fee scale required?
- Must health centers accept all patients, regardless of their ability to pay?
- Are there special programs to assist health centers in attracting and retaining healthcare providers to their organization?
- Can FQHCs be reimbursed by Medicare for telehealth services?
- What strategies have rural health centers used to provide behavioral health and dental health services to meet the needs of their patient population?
- What do we know about the financial and operational performance of health centers?
- What are the Medicare Administrative Contractors (MACs), and what is their role in administering Medicare Part A and Part B for health centers?
- Can another healthcare organization, such as a Critical Access Hospital, operate an FQHC?
- What is the difference between a Federally Qualified Health Center (FQHC) and a Rural Health Clinic (RHC)?
- Are there funding opportunities available for the expansion, renovation, purchase of equipment, or new construction of health centers?
- Who can I contact for additional information about health centers?
What are the benefits of FQHC status?
Once certified by the Centers for Medicare & Medicaid (CMS) as an FQHC, health centers are eligible for several benefits including:
- Medicare reimbursement under a Prospective Payment System (PPS), in which Medicare payment is made based on a national rate that is adjusted for the location where services are furnished. CMS provides a brief overview of the FQHC PPS.
- Medicaid reimbursement under the Prospective Payment System (PPS) or other state-approved Alternative Payment Methodology (APM). A 2017 Medicaid and CHIP Payment and Access Commission (MACPAC) issue brief, Medicaid Payment Policy for Federally Qualified Health Centers, provides an overview of Medicaid reimbursement for FQHCs.
What are the benefits of being a Health Center Program award recipient or look-alike?
Health Center Program award recipients and look-alikes may apply for or receive the following benefits:
- Federally Qualified Health Center (FQHC) Prospective Payment System (PPS) reimbursement for services provided to Medicare and Medicaid beneficiaries.
- Eligibility to purchase prescription and non-prescription medications for outpatients at reduced cost through the 340B Drug Pricing Program.
- Access to the Vaccines for Children Program.
- Automatic designation as a Health Professional Shortage Area (HPSA), which provides eligibility to apply to receive National Health Service Corps (NHSC) personnel and eligibility to be a site where a J-1 Visa physician can serve. Health centers must still review and sign the NHSC site agreement. Learn more about requirements for health centers to become approved NHSC sites.
- HRSA-supported training and technical assistance.
Additional benefits are available for Health Center Program award recipients, including:
- Federal grant funding under Section 330 of the Public Health Service (PHS) Act.
- Medical malpractice coverage may be granted for the health center organization, their employees, and eligible contractors under the Federal Tort Claims Act (FTCA). To receive coverage, award recipients must submit an application to the HRSA Bureau of Primary Health Care and meet the requirements to attain deemed status. See HRSA's Health Center Program Federal Tort Claims Act (FTCA) for additional information. Note that FTCA coverage is available only to Health Center Program award recipients, not Health Center Program look-alikes.
- Loan guarantees for capital improvements.
What is the Health Center Program?
Section 330 of the Public Health Service (PHS) Act defines the Health Center Program as a funding opportunity for organizations to provide healthcare services to underserved populations. Benefits to health centers participating in this program include funding to help with the costs of uncompensated care as well as malpractice coverage under the Federal Tort Claims Act.
HRSA’s Bureau of Primary Health Care offers funding opportunities for new and continued Health Center Program funding:
- New Access Point (NAP) funding opportunities provide operational support for new healthcare delivery sites under the Health Center Program to expand access to affordable, accessible, quality, and cost-effective primary healthcare services for underserved communities. The NAP notice of funding opportunity (NOFO) is posted on the Funding and Opportunities section of this guide and on Grants.gov, when accepting applications. Health Center Program New Access Points Technical Assistance provides specific information about NAP funding.
- Service Area Competition (SAC) funding opportunities support continued access to comprehensive, culturally competent, high-quality primary health care services for communities and populations currently served by the Health Center Program. Healthcare organizations meeting the Section 330 program requirements are eligible for SAC funding. The SAC program is also posted on the Funding and Opportunities section of this guide and on Grants.gov. Service Area Competition Technical Assistance provides specific information about the program, including the service area announcement table, application resources, and frequently asked questions.
Public and private nonprofit organizations that meet the Health Center Program Requirements may apply for these opportunities. Once they receive the awards, they become responsible for serving the general community, and/or statutorily mandated special medically underserved populations of migratory and seasonal agricultural workers, people experiencing homelessness, or residents of public housing.
View full-text of Title 42 of the U.S. Code, Chapter 6A, Public Health Service Act, and section 254b (the equivalent of Section 330).
For more information on the health center look-alike program, requirements, and application procedures, see HRSA's Health Center Program Look-Alikes. HRSA Look-Alike Initial Designation Technical Assistance provides detailed application instructions and links to technical assistance resources.
How does a health center become certified as an FQHC?
With the exception of tribal organizations, which may apply to CMS directly to become an FQHC, organizations must first become a Health Center Program award recipient or Health Center Program look-alike in order to become certified as an FQHC. After receiving Health Center Program award recipient or look-alike designation, health centers may apply to CMS for Medicare FQHC certification, and to their state Medicaid office for Medicaid FQHC certification. Each health center site must separately enroll to receive FQHC certification and Medicare FQHC reimbursement. Prospective FQHC enrollees can review Information on Medicare Participation, Federally Qualified Health Center for details.
More information on certification can be found in the State Operations Manual Chapter 2, section 2826. Additional information on Medicare enrollment for FQHCs can be found in Medicare Program Integrity Manual Chapter 10 under 10.2.1.D – Federally Qualified Health Centers.
Where can I find statistics on health centers?
Each year, HRSA-funded health centers are required to report a core set of measures including patient characteristics, services provided and patient utilization, clinical processes and health outcomes, staffing, and finances as part of the Uniform Data System (UDS), a standardized reporting system. Publicly available UDS data on data.hrsa.gov includes:
- Health Center Program Award Recipient Data and Health Center Look-Alike Data – In addition to national summaries, users can drill down to view UDS award recipient and look-alike data by state/territory and by individual health centers.
- Patient Characteristics Snapshot – Provides a national summary of health center patient poverty level, insurance status, and race and ethnicity.
- Special Populations Funded Programs – Displays data on health centers that receive grant funding through the Health Care for the Homeless, Migrant Health Centers, and Public Housing Primary Care Programs to serve special populations.
- Data Comparisons Tool – Allows users to view how one state/territory compares to the national average or to another state/territory on key UDS data points: total number of patients served by service category, target populations, and other patient characteristics.
Additional UDS data resources include:
- 2020 UDS Trends Webinar Presentation and Recording – Highlights 2020 UDS data trends in health center patient demographics, staffing, and clinical quality measures, and offers insights on how health centers delivered quality primary care services to their communities during the COVID-19 pandemic.
- Uniform Data System (UDS) Resources – Features technical assistance resources for health centers that support complete, accurate, and timely submission of an annual UDS reports, including the annual UDS manuals and Program Assistance Letters, webinars, trainings, fact sheets, validations, and crosswalks.
- Uniform Data System (UDS) Mapper: A geospatial mapping tool that can help evaluate the geographic reach, penetration, and growth of the Health Center Program and its relationship to other federally linked health resources. The tool provides additional details on health center service areas, data identifying areas of high need and services available related to the opioid epidemic, and more. The UDS Mapper tool is free but requires registration to use.
The data.hrsa.gov site offers additional resources:
- Health Sites provides data on health center locations.
- Data Explorer includes additional details on location, rural status, and award recipient status.
The National Association of Community Health Centers provides these data sources:
- Community Health Center State Level Data and Maps offers state-level data on health center patients, staff, patient visits, and the number of award recipients and delivery sites.
- Community Health Center Chartbook, 2022 includes statistics on telehealth services, financial health, workforce status, and many of the data points mentioned above in chart format.
You can also look at the resources we have listed on Federally Qualified Health Centers (FQHCs) and limit by the topic “Statistics and Data” and other topics of interest for data from other organizations.
How do I apply for a Health Center Program grant?
Applying for health center funding requires significant planning and grant writing resources as the application process can be complex. For those working through the process, it may be helpful to separate the steps of development into manageable tasks. The key aspects of developing a grant proposal for a Section 330 PHS Act Health Center Program can be found in So You Want to Start a Health Center? and include the following:
- Determine you can meet the compliance requirements within the specified time period for newly funded organizations. See the Health Center Program Compliance Manual.
- Confirm your location or the population to be served is an eligible Medically Underserved Area (MUA) or Medically Underserved Population (MUP). See the MUA Find tool.
- Assess the need for health services in the service area. See page 11 of So You Want to Start a Health Center?, Developing a Needs Assessment.
- Establish and maintain community support by engaging community members, healthcare providers, and other stakeholders in the local planning and implementation process.
- Find a suitable location for your health center. See page 15 of So You Want to Start a Health Center?, Physical Space Considerations.
- Establish and engage a patient-majority governing board that meets federal requirements as outlined in the Health Center Program Compliance Manual.
- Identify staffing needs and policies for employment practices, including the recruitment and retention of provider staff.
- Develop a business plan identifying the population groups to be served, management and organizational structure, projected demand for services, and expected expenses and revenue.
- Develop a Sliding Fee Discount Program and other mechanisms to ensure no one is turned away for the inability to pay.
It may be helpful to contact training and technical assistance organizations such as the Health Center Program’s National Training and Technical Assistance Partners (NTTAP), Health Center Controlled Networks (HCCN), and/or your regional or state Primary Care Association (PCA). These entities are funded by HRSA to provide training and technical assistance to health centers, and they have the resources to assist in the growth of health centers within their state or geographic area.
Specific information regarding Section 330 award application procedures can be accessed from the technical assistance sites for New Access Points or Service Area Competition.
Keep in mind you can only apply at a time that HRSA is accepting applications for New Access Points or for Service Area Competition (Section 330 federal awards). However, Health Center Program Look-Alike Initial Designation applications are accepted on a rolling basis.
Are Health Center Program awards granted on a competitive basis?
Yes. Based upon federal appropriations, HRSA announces if funding is available for New Access Points (NAPs) competition, which support new sites that are either the satellite site of an existing Section 330 health center, or a new health center organization, including Health Center Program look-alikes. In addition, once every 3 years (and more often if necessary), existing Health Center Program award recipients have their service areas re-competed. If the existing award recipient would like to continue receiving the award, they must re-apply for it, but it is possible another organization could be granted the Health Center Program award for that service area as SAC is a competitive award opportunity.
Which special populations can be served by healthcare organizations applying for funding through Section 330 of the Public Health Service Act?
Healthcare organizations can apply for awards under Section 330 of the Public Health Service Act to specifically serve statutorily defined special populations.
Migratory and Seasonal Agricultural Worker Health Centers provide comprehensive and culturally competent primary health services to migratory and seasonal agricultural workers and their families. Additional services of this program include disease prevention and occupational health and safety.
The Healthcare for the Homeless Program serves patients who are at risk for experiencing homelessness, are currently experiencing homelessness, or live in shelters or temporary housing. They provide comprehensive healthcare services, including substance abuse and mental health services.
Public Housing Primary Care Health Centers provide residents of public housing and individuals living in areas immediately accessible to public housing access to comprehensive primary care services. Often these services are provided on the public housing premises or within easy access to residents.
What are school-based health centers and how would I set one up?
School-based health centers (SBHCs), also known as School-Based Service Sites (SBSS), provide primary care and other services in or near schools, reducing scheduling and transportation barriers for students, and are often located in communities with higher rates of free or reduced lunches. School-Based Health Centers in an Era of Health Care Reform: Building on History found that common services include chronic illness management, immunizations, reproductive health services, oral health, substance abuse and mental health treatment.
SBHCs at minimum have a primary care provider on staff and a majority of them also have a behavioral health professional. They may also have dental providers, health educators, dietitians, outreach coordinators, and vision care providers, according to the 2016-17 National School-Based Health Care Census Report from the School-Based Health Alliance.
While health centers often have sites based in schools, SBHCs are more commonly sponsored by a health center. However, it is important to note that SBHCs are separate from the Health Center Program. SBHCs may also be sponsored by organizations, such as a local health department or hospital. Twenty Years of School-Based Health Care Growth and Expansion reported that of the 2,584 SBHCs in the United States in 2016-2017 school year, 1,181 were sponsored by an FQHC and 823 were located in rural areas. In addition, approximately 20% of SBHCs used telehealth that year. The Evidence on School-Based Health Centers: A Review also found that SBHCs may be well-suited to reach American Indian and Alaskan Native communities.
A number of organizations offer planning guides and tools for starting SBHCs. General tips provided include:
- Involve the community in the planning process. This could include establishment of a School Health Advisory Committee, which often includes school leadership, the school nurse, students, parents, and others.
- Conduct a needs assessment. Who is your target audience and what are their primary unmet needs?
- Determine the SBHC's organization. What services will you provide? Where? With what staff? How will the SBHC interact with the school? School-Based Health Centers: A Funder's View of Effective Grant Making recommends at minimum a primary care provider and front-office staff member for staffing, and to provide space for a small waiting room, two exam rooms, a bathroom, and an office, as well as internal and external doors to allow for flexible hours. The school nurse and/or school counselor most often facilitates regular communication between school staff and the SBHC.
- Plan funding sources. Foundation grants may provide funding for start-up costs. Medicaid/Children's Health Insurance Program billing is common for ongoing costs; Section 330 health center funding, Title X of the Public Health Service Act, and state funding are additional options. Strategizing how to get parent/guardian consent forms for student enrollment was also identified as an important step.
- SBHC 101: Making an Informed Decision about Starting a School-Based Health Center – Webinar slides from the School-Based Health Alliance.
- Going Where The Kids Are: Starting, Growing and Expanding School Based Health Centers – Webinar recording from Community Health Center, Inc. about the benefits and challenges of health centers adopting SBHCs, as well as strategies for integrating behavioral and oral health.
- A set of modules from the Youth Healthcare Alliance on starting a SBHC.
- Opening a School-Based Health Center: A How-To Guide for West Virginia and start-up tools – While specific to West Virginia, it provides updates from an earlier New Mexico resource.
- Sustainability tools from the School-Based Health Alliance.
See How can healthcare services be provided in rural schools? for additional information, including how SBHCs collaborate with school nurses.
Can a for-profit clinic be a health center?
No. A health center must be a public entity or a private nonprofit organization.
Is a board of directors required?
Yes, a health center must be governed by a board of directors. The majority (at least 51%) of the health center board members must be patients of the health center and demographically representative of the populations served by the health center. The remaining board members must be representative of the community being served by the health center and must be selected for their expertise in relevant subject areas. The governing board ensures that the health center is community-based and responsive to the community's healthcare needs. Health centers under the management of American Indian tribes, organizations, or tribal groups are exempt from specific board composition requirements. For detailed information about board development and management, see Chapter 20: Board Composition of the Health Center Program Compliance Manual. The Health Center Resource Clearinghouse also offers resources related to health center governance.
Are there location requirements for health centers?
Each health center that receives Health Center Program award funding must meet the service area location requirements outlined in the notice of funding opportunity. Health centers must be located in or serve a designated Medically Underserved Area (MUA) or serve a designated Medically Underserved Population (MUP). Migrant and Seasonal Agricultural Worker Health Centers, Health Care for the Homeless, and Public Housing Primary Care Programs do not need to meet the MUA/MUP restriction. Health centers may be located in rural or urban areas.
Are there specific staffing requirements for health centers?
No, there are no specific requirements for staffing mix at a health center. Health centers must maintain a core staff that is able to carry out the required and additional health services of the health center. This may vary based on the needs of the community. Additional information about clinical staffing and demonstrating compliance is available in Chapter 5: Clinical Staffing of the Health Center Program Compliance Manual.
What types of services do health centers provide?
Health centers must provide comprehensive primary care and preventative health services for all age groups. Health centers must also provide enabling services, such as case management and transportation services. Examples of clinical and enabling services that must be provided directly by a health center or by formal arrangement with another provider include:
- Preventive dental services
- Well child visits
- Pharmaceutical services
- Translation services for limited English-speaking patients
- Health education
For more information, please see HRSA's Health Center Program Compliance Manual.
Are there minimum hours that a health center must be open?
While there are no specific requirements on hours, health centers are required, on an organizational level, to provide services at times and locations that assure accessibility and meet the needs of the population served, and to record their hours of operation in the current scope of project (as described on Form 5B).
However, health centers may be subject to minimum hour requirements to receive certain benefits. For example:
- Minimum hours are required in order for providers to receive Federal Tort Claims Act (FTCA) coverage, which is discussed in HRSA's Federal Tort Claims Act Health Center Policy Manual.
- Minimum patient-care hours are required for National Health Service Corp (NHSC) providers.
Specific funding opportunities may have related eligibility requirements. Additionally, individual state Medicaid agencies, CMS, and private third-party insurers may have their own policies regarding operational hours and schedules. Each health center is responsible for ensuring that it complies with the requirements of the benefit/third-party payer programs it participates in.
Is a sliding fee scale required?
Yes, health centers are required to have a sliding fee discount program. Health centers may offer a full discount or elect to have a nominal charge for individuals and families whose incomes are at or below 100% of the Federal Poverty Guidelines (FPG). For individuals with incomes above 100% and at or below 200% FPG, partial discounts are provided using a sliding fee scale with discounts based solely on the patient’s family size and income. No sliding fee program discounts are provided to individuals and families with annual incomes above 200% of the current FPG. For more information about sliding fee scales and nominal charges, see Chapter 9: Sliding Fee Discount Program of the Health Center Program Compliance Manual.
Must health centers accept all patients, regardless of their ability to pay?
Yes. This is a key requirement of the Health Center Program.
Are there special programs to assist health centers in attracting and retaining healthcare providers to their organization?
Health centers are eligible for a variety of federal programs that can be used to attract and retain healthcare providers within their organization, including:
- National Health Service Corps Recruitment and Retention Assistance – A scholarship and loan repayment program that exchanges financial support for years of service at eligible healthcare facilities recruiting and retaining qualified clinicians.
- J-1 Visa Waiver – Allows foreign medical graduates who have completed residency and fellowship training to remain in the U.S. and practice in a federally-designated Health Professional Shortage Area (HPSA) or Medically Underserved Area (MUA).
- Teaching Health Center Graduate Medical Education Program – Funds medical education expenses for training residents in community-based primary care residency programs that include health centers.
Can FQHCs be reimbursed by Medicare for telehealth services?
Traditionally, Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) could only bill Medicare for telehealth services if the clinic was serving as an originating site, which means where a Medicare beneficiary was located for a telehealth visit with a provider in a different location. FQHC providers could not serve as distant sites, or the location of the provider furnishing telehealth services to Medicare beneficiaries.
In response to the COVID-19 pandemic, however, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27, 2020. The CARES Act allowed FQHCs and RHCs to furnish distant site telehealth services to Medicare patients at any location, including their homes, for the duration of the COVID-19 public health emergency. The Consolidated Appropriations Act, 2023 extended the ability of RHCs and FQHCs to serve as distant site providers through December 31, 2024.
According to Rural Federally Qualified Health Centers Financial and Operational Performance Analysis 2018-2021, rural FQHCs conducted 4.9 million visits via telehealth in 2021. This publication also notes that the median percentage of total patient visits delivered by telehealth services at rural FQHCs in 2021 was 13%.
The CY 2022 Medicare Physician Fee Schedule Final Rule updated federal regulations to make permanent the ability of FQHCs and RHCs to be reimbursed by Medicare for mental health visits that use interactive, real-time audio-visual and audio-only technology. Beginning January 1, 2022, RHCs and FQHCs are paid for these services at the same rates they are paid for in-person mental health services.
For more information on changes to rural healthcare and telehealth as a result of COVID-19, see RHIhub's Rural Response to Coronavirus Disease 2019 (COVID-19) and Telehealth Use in Rural Healthcare topic guide.
What strategies have rural health centers used to provide behavioral health and dental health services to meet the needs of their patient population?
Many strategies have been developed related to the provision of behavioral health services and dental health services. The most common strategies include:
Using the National Health Service Corps to recruit and retain dental and behavioral healthcare
Health Center Program award recipients and look-alikes are eligible to participate in the National Health Service Corps (NHSC) programs. The NHSC loan repayment program is not limited to primary care providers; they also accept and recruit licensed dental and mental/behavioral healthcare providers to NHSC approved sites, which include health centers. The NHSC scholarship program will pay for a variety of school expenses for students in fully-accredited training programs for physicians, dentists, nurse practitioners, certified nurse midwives, and physician assistants.
Contractual agreements with local dental service providers
Health centers are eligible to contract with private dentists for dental services provided within their own dental facilities. The National Network for Oral Health Access provides resources to help health centers plan and implement contracts for dental services. Case Studies of 8 Federally Qualified Health Centers: Strategies to Integrate Oral Health with Primary Care includes examples of contracted oral health services integrated with primary care.
Implementation of telebehavioral health services
Telebehavioral health, or telemental health, may be implemented in an FQHC to expand their behavioral health services. Increasing Access to Behavioral Health Care Through Technology discusses how to plan, implement, and further develop a telebehavioral health program. According to 2019 HRSA Health Center Program Data, 592 health centers, or 42.74% of health centers, utilized telemedicine technologies. Of those health centers, 446 used telemedicine for mental health services, and 192 used telemedicine for substance use disorder services. In light of the COVID-19 public health emergency, 1,362 health centers, or 99% of all health centers, utilized telemedicine services in 2020, including 1,283 that provided telemental health services and 893 used telemedicine for substance use disorder services.
Expansion of dental services to offsite locations
Mobile units and school-based programs are some examples of how health centers have expanded their dental services. The Oral Health Infrastructure Toolkit provides additional tools and information on how to establish these programs.
Integration and co-location of behavioral health services
Most health centers integrate behavioral health (mental health and substance abuse) services within their facility (co-location) and use staff employed by the center to provide onsite behavioral health services. However, health centers may use outsourced staff from another facility, or a combination of staff who are outsourced and employed staff. Most health centers provide these services onsite, integrated with primary care services. For examples of health centers that integrated behavioral health, see Case Studies of 6 Safety Net Organizations that Integrate Oral and Mental/Behavioral Health with Primary Care Services.
For additional resources, see the Health Center Resource Clearinghouse priority topic, Behavioral Health.
What do we know about the financial and operational performance of health centers?
Rural Federally Qualified Health Centers Financial and Operational Performance Analysis 2018-2021, a 2023 report from Capital Link, a National Training and Technical Assistance Partner (NTTAP) organization, examines financial and operational characteristics of rural Federally Qualified Health Centers (FQHCs), including patient and payer mix, revenue mix, financial performance, and quality of care, among other topics. This report shows that the operating margins for both rural and urban FQHCs declined between 2018 and 2021. However, rural FQHCs consistently had higher margins than urban facilities during this period. In 2019, the margins for rural FQHCs ranged from -2.5% in the 25th percentile to 10.8% in the 75th percentile. In 2021, the median percentage of operating budgets spent on personnel-related expenses at rural health centers was 64.2%, compared to 66.8% in urban facilities. This analysis also highlights that rural health centers receive a lower median percentage of patient revenue from Medicaid at 46%, compared to 69% at urban health centers, but receive a higher percentage of patient revenue from private insurance than urban facilities (22% versus 11%).
Community Health Centers in a Time of Change: Results from an Annual Survey, a 2019 analysis from the Kaiser Family Foundation, notes that 51% of health centers reported receiving more federal funding in the previous year. This report also states that 52% of health centers reported increasing operating costs and workforce recruitment were among the top three challenges facing health centers, followed by 31% citing inadequate physical space. Rural health centers were more likely than urban health centers to include workforce recruitment (60% vs. 45%) and inadequate physical space (36% vs. 27%) in this list.
The COVID-19 pandemic had a negative impact on the financial performance of rural FQHCs. Financial Impact of COVID-19 on Rural Federally Qualified Health Centers estimates that rural FQHC had $1.4 billion in COVID-19 related expenses and $1.7 billion in lost revenue between April 2020 and June 2021. The Centers for Disease Control and Prevention (CDC) developed a list of resources to help healthcare facilities respond to COVID-19 and maintain healthcare services during the COVID-19 pandemic.
What are the Medicare Administrative Contractors (MACs), and what is their role in administering Medicare Part A and Part B for health centers?
Medicare Administrative Contractors (MACs) are selected by the Centers for Medicare & Medicaid Services (CMS) to administer and process Medicare Part A and Medicare Part B claims. MACs serve as the primary contact between the Medicare Fee-For-Service program and healthcare providers enrolled in the Medicare program, including healthcare providers affiliated with FQHCs. MACs also support and work with FQHCs by enrolling providers in the Medicare program, educating providers on Medicare billing requirements, handling provider reimbursement and auditing institutional provider cost reports, managing the initial claims appeals process, and establishing local coverage determinations (LCDs). Organizations can also use the online Provider Enrollment, Chain and Ownership System (PECOS) to enroll as an FQHC in Medicare. For more information, please see the CMS overview of Medicare Administrative Contractors. To access a CMS Medicare Administrative Contractor within your state, see the CMS Review Contractor Directory - Interactive Map.
Can another healthcare organization, such as a Critical Access Hospital, operate an FQHC?
In general, no. However, a city- or county-owned public hospital or a 501(c)(3) Critical Access Hospital (CAH) may be able to operate an FQHC if the CAH's governing body or board of directors is developed to meet the Health Center Program requirements, the organization meets all other eligibility requirements, and the organization successfully applies for the program. Other healthcare organizations, such as Critical Access Hospitals and Rural Health Clinics, are not eligible to operate a health center look-alike.
What is the difference between a Federally Qualified Health Center (FQHC) and a Rural Health Clinic (RHC)?
Although FQHCs and RHCs both provide primary care to underserved populations, there are some fundamental differences. For example, RHCs must meet prescribed staffing requirements, are not required to charge based on a sliding fee scale unless it is a National Health Service Corps-approved site, and receive an interim all-inclusive rate (AIR) payment per visit throughout the clinic's fiscal year. For an additional comparison of FQHCs and RHCs, see Module 1 – An Introduction to the Rural Health Clinic Program from the National Organization of State Offices of Rural Health's Rural Health Clinic Technical Assistance Educational Series.
|Federally Qualified Health Centers||Rural Health Clinics|
|Nonprofit or public facility||For-profit, nonprofit, or public facility|
|Required to provide care for all age groups||May be limited to a specific type of primary care practice (e.g., OB-GYN, Pediatrics)|
|Must be located in or serve an area with a medically underserved population or experiencing a shortage of healthcare providers||Must be located in a rural area designated as a Health Professional Shortage Area, Medically Underserved Area, or Governor-designated and Secretary-certified shortage area.|
|FQHCs may operate in both non-urbanized and urbanized areas||RHCs must be located in non-urbanized areas, as defined by the U.S. Census Bureau. May retain RHC status if designation of service area changes.|
|Required to have a board of directors – at least 51% must be patients of the health center||Not required to have a board of directors|
|Minimum services required including, but not limited to, maternity and prenatal care, preventive health and dental services, emergency care, and pharmaceutical services||No minimum service requirements|
|Required to treat all residents in their service area with charges based on a sliding fee scale, and no patient can be denied service for the inability to pay||Not required to charge based on a sliding fee scale unless a National Health Service Corps-approved site|
|Must provide after-hours coverage to respond to patient medical emergencies by telephone, face-to-face, or by arrangement with another healthcare provider||Not required to provide a minimum of hours or emergency coverage|
|Eligible for the Health Center Federal Tort Claims Act (FTCA) Medical Malpractice Program through the approval of an annual application to HRSA||Not eligible for FTCA liability protection|
|Required to have ongoing quality assurance program||Required to conduct a biennial program evaluation regarding quality improvement|
|Required to submit an annual cost report and, if more than $750,000 in Federal funds are spent in the fiscal year, audited financial reports||Required to submit an annual cost report; however, auditing of financial reports is not required|
Are there funding opportunities available for the expansion, renovation, purchase of equipment, or new construction of health centers?
The Health Resources and Services Administration (HRSA) has offered grants to support expansion, renovation, purchase of equipment, or new construction. These grants are posted on HRSA's Capital Development Grant Technical Assistance website. In addition, HRSA administers the Health Center Facility Loan Guarantee Program (LGP), which facilitates health centers' access to capital funding and reduces financing costs for the construction, expansion, alteration, renovation, and modernization of health center medical facilities. Capital Link also receives funding from HRSA to provide health centers with tools, resources, and services related to capital funding and needs. Other funders may support capital projects and can be found listed on the Funding and Opportunities section of this guide and the Capital Funding for Rural Healthcare guide.
Who can I contact for additional information about health centers?
For additional information about health centers and related programs contact one or more of the following:
For award questions:
Bureau of Primary Health Care
Health Resources and Services Administration
Health Center Program Support or call 877.464.4772
7:00 am to 8:00 pm ET, Monday through Friday (except Federal holidays)
For technical, policy, and operational assistance for new and established health centers including CMS
CMS Regional Office Rural Health Coordinators
For training, technical assistance, research papers, policy, and advocacy issues:
National Association of Community Health Centers (NACHC)
For assistance in the establishment of geographic eligibility and the development of a health center:
State and Regional Primary Care Associations
Last Reviewed: 12/13/2021