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Federally Qualified Health Centers (FQHCs)

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 federally designated Health Center Program awardees, and certain outpatient clinics associated with tribal organizations.

Approximately 1 in 6 rural residents are served by the Health Center Program, according to the Health Resources and Services Administration (HRSA) Bureau of Primary Health Care (BPHC). Health centers provide a comprehensive set of health services including primary care, behavioral health, chronic disease management, preventive care, and other specialty, enabling, and ancillary services, which may include radiology, laboratory services, dental, transportation, translation, and social services. In order to be a qualified entity in the federal Health Center Program, an organization must:

  • Offer services to all, regardless of the person's ability to pay
  • Establish a sliding fee discount program
  • Be a nonprofit or public organization
  • Be community-based, with the majority of its governing board of directors composed of patients
  • Serve a Medically Underserved Area or Population
  • Provide comprehensive primary care services
  • Have an ongoing quality assurance program

The Bureau of Primary Health Care (BPHC) Health Center Compliance Manual provides additional information on health center requirements.

There are several distinctions that should be understood related to health centers:

  • Health Center Program Awardee:
    • Health Center Grantee: Health centers that receive grant funding from the Health Resources and Services Administration (HRSA) Bureau of Primary Health Care, under the Health Center Program, as authorized by Section 330 of the Public Health Service (PHS) Act. Most grants provide support to contribute to serving an entire underserved community (or service area), while others fund specific underserved populations as mandated in the Section 330 authorization, such as agricultural workers, persons experiencing or at risk for homelessness, and residents of public housing.
    • Health Center Look-Alikes: Look-alikes are health centers that have been certified by the federal government as meeting all the Health Center Program requirements, but do not receive grant funding under the Health Center Program.
  • Federally Qualified Health Center (FQHC): FQHCs are outpatient clinics that qualify for specific reimbursement systems under Medicare and Medicaid. FQHCs include federally-supported health centers (both grantees 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 grantee, 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 grantees, look-alikes, and FQHCs.

If you are interested in becoming an FQHC, see How to Become a Health Center and So You Want to Start a Health Center...? A Practical Guide for Starting a Federally Qualified Health Center.

Frequently Asked Questions


What are the benefits of being a health center?

The main purpose of the FQHC program, under both Medicare and Medicaid, is to enhance the provision of primary care services in underserved communities. Health centers must fall under one of the following categories before they are eligible for FQHC program benefits:

  • Is a health center grantee that meets the requirements of the Health Center Program under Section 330 of the Public Health Service (PHS) Act
  • Is a health center look-alike, meaning that it meets the requirements of the Health Center Program but does not receive grant funding under Section 330 of the PHS Act
  • Is an outpatient health program or facility operated by a tribe or tribal organization

Health center grantees, look-alikes, and certain tribal organizations, once certified by the Centers for Medicare and Medicaid (CMS) as an FQHC or FQHC look-alike, 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 which is adjusted based on the location of where the services are furnished
  • Medicaid reimbursement under the Prospective Payment System (PPS) or other state-approved Alternative Payment Methodology (APM) for services provided under Medicaid
  • 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

Additional benefits are available for Health Center Program grantees, including:

  • Grant funding under Section 330 of the Public Health Service (PHS) Act
  • Medical malpractice coverage is provided for the health center organization, their employees, and eligible contractors under the Federal Tort Claims Act (FTCA). See HRSA's Health Center Program Federal Tort Claims Act (FTCA) and Chapter 21 of the Health Center Compliance for additional information. Note that FTCA coverage is available only to Health Center Program grantees, not FQHC look-alikes.

What is the Health Center Program?

Section 330 of the Public Health Service (PHS) Act defines the Federal Health Center Program as a funding opportunity for organizations to provide healthcare services to underserved populations. Some of the benefits to health centers participating in this program include funding to help with the costs of uncompensated care and malpractice coverage under Federal Torts Claim Act.

Two Section 330 PHS Act grants supporting the development of health center programs are disbursed by HRSA through the Bureau of Primary Health Care.

  • New Access Point (NAP) funding opportunities are intended to improve the health of the underserved communities and vulnerable populations by increasing access to comprehensive, culturally competent, quality primary healthcare in new service delivery sites. The NAP program 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 the program.
  • Service Area Competition (SAC) funding opportunities are for maintaining accessible and affordable quality healthcare services in areas of need that are 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.

Types of organizations that may apply are public and nonprofit private organizations that meet the Section 330 Compliance Requirements. Once they receive the grants, they become responsible for serving the general community, and/or statutorily mandated special populations of agricultural, homeless, or public housing populations.

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).


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…? A Practical Guide for Starting a Federally Qualified Health Center and include the following:

  • Determine you can meet the compliance requirements within the specified time period for new starts. 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 catchment area. See Needs Assessment And Planning.
  • Establish and maintain community support by engaging citizens, healthcare providers and other stakeholders in the local planning and implementation process.
  • Find a suitable location for your health center. See Looking For a Home Organizationally and Physically.
  • Select a patient-majority governing board that meets federal requirements.
  • 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.

It may be helpful to contact the infrastructure organizations known as National Cooperative Agreement (NCA) holders, Health Center Controlled Networks (HCCN), and/or your state's Primary Care Association (PCA). These entities are charged by HRSA to provide technical assistance and training 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 grant application procedures can be accessed from the technical assistance sites for New Access Points or Service Area Competition. Also, How to Become a Health Center provides additional information regarding Health Center Program funding.

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 grants).


Are Health Center Program grants awarded on a competitive basis?

Yes. Based upon federal appropriations, HRSA announces if they have funding available for New Access Points (NAPs) competition, which are new sites that are either the satellite site of an existing Section 330 health center, or a new health center organization. In addition, once every 3 years (and more often if necessary), existing service area awards are re-competed. This means that any organization can apply for the Service Area Competition (SAC) Funding for Health Center Program, and the decision regarding who receives this grant is made by HRSA on a competitive basis. If the existing grantee would like to continue receiving the grant, they must re-apply for it, but it is possible another organization could win the competition and be awarded the Health Center Program grant for that service area.


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 grants under Section 330 of the Public Health Service Act that serve special populations. Agricultural Worker Health Centers, Health Care for the Homeless Programs, and Public Housing Primary Care Programs are community-based and patient-directed health centers providing primary care to low-income, underserved populations with limited access to healthcare.

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 homelessness, are homeless, or live in shelters or temporary housing. They provide comprehensive healthcare services that include substance abuse and mental health services.

Public Housing Primary Care Health Centers provide residents of public housing access to comprehensive primary care services. Often these services are provided on the public housing premises or within easy access to residents.


Can a for-profit clinic be a health center?

No. A health center must be a public entity or a private nonprofit.


Is a board of directors required?

Yes, a health center must be governed by a board of directors. The board must include a majority (at least 51%) of active, registered patients of the health center who are representative of the populations served by the center. The governing board ensures that the 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 Compliance Manual.


Are there location requirements for health centers?

It depends. Each health center that receives PHS 330 Health Center Program grant funding must meet the service area location requirements of that grant. Health centers must be located in or serve a designated Medically Underserved Area (MUA) or serve a designated Medically Underserved Population (MUP). Agricultural Worker Health Centers, Health Care for the Homeless, and Public Housing Primary Care Programs do not need to meet the MUA/MUP restriction. FQHCs may be located in rural or urban areas.


Are there special staffing requirements for health centers?

No, there are no specific requirements for staffing mix at a health center. These 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 Compliance Manual.


What types of services do health centers provide?

Health centers must provide primary care services for all age groups. Health centers must provide preventive health services on site, or by arrangement with another provider. Other services that must be provided directly by a health center or by arrangement with another provider include:

  • Preventive dental services
  • Emergency medical services
  • Referrals to specialty care providers
  • Pharmaceutical services as appropriate
  • Referrals to mental health and substance abuse services
  • Patient case management to establish eligibility for health and related services
  • Transportation services necessary for adequate patient care
  • Translation services for limited English speaking patients
  • Health education of patients and the general population

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 to be 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:

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?

By law, health centers may charge no more than a nominal fee to individuals whose incomes are below the Federal Poverty Level (FPL). Individuals with incomes between 101% and 200% FPL must be charged using a sliding fee scale with discounts based on patient family size and income. For more information about sliding fee scales and nominal fees, see Chapter 9: Sliding Fee Discount Program of the Health Center 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. However, some health centers may refuse service to patients who have violated health center policies.


How does a health center become certified as an FQHC or an FQHC look-alike?

Health centers that receive grant funding under Section 330 of the PHS Act can enroll as Medicare providers and be certified as FQHCs by the Centers for Medicare and Medicaid Services (CMS).

HRSA designated health center look-alikes that meet health center requirements, but do not receive Section 330 funding, can apply to receive FQHC prospective payment system (PPS) reimbursement through CMS. For more information on the health center look-alike program, requirements, and application procedures, see HRSA's Health Center Program Look-Alikes. Detailed application instructions and links to technical assistance resources can be found on HRSA's Look-Alike Initial Designation Technical Assistance.


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 for eligible healthcare facilities in recruiting and retaining qualified clinicians.
  • J-1 Visa Waiver – allows international medical graduates pursuing residency and fellowship training to remain in the U.S. once their training is complete 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 FQHCs and FQHC look-alikes.

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 professionals
    FQHCs 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 FQHCs. 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
    FQHCs and FQHC look-alikes are eligible to contract with private dentists for dental services provided within their own dental facilities. Increasing Access to Dental Care Through Public Private Partnerships: Contracting Between Private Dentists and Federally Qualified Health Centers provides detailed information regarding the implementation of a contract with dentists to provide oral health services for underserved populations. This manual includes statutory information on contracting, how grant money from the FQHC program can be used, setting rates for contracted services, and the scope of services that can be contracted. 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 telemental health services
    Telemental health, or telebehavioral 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.
  • Integration and co-location of behavioral health services
    Most FQHCs 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, FQHCs may use outsourced staff from another facility, or a combination of staff who are outsourced and employed staff. Most FQHC sites provide these services on site, integrated with primary care services. NACHC 2010 Assessment of Behavioral Health Services in Federally Qualified Health Centers looks more closely at the integration of mental health and substance abuse services in FQHCs.

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). 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, own an FQHC?

In general, no. However, a city- or county-owned public hospital or a 501(c)(3) Critical Access Hospital can own an FQHC if the governing body or board of directors is developed to meet the federal requirements of an FQHC.


Are there funding opportunities available for the expansion, renovation, purchase of major equipment, or new construction of health centers?

The Health Resources and Services Administration has offered grants to support expansion, renovation, purchase of major equipment, or new construction. These grants are posted on HRSA's Health Center Capital Development Programs website. 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 Federally Qualified Health Centers and related programs contact one or more of the following:


Last Reviewed: 4/13/2018