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Federally Qualified Health Centers (FQHC) or Health Centers (HC) are non-profit private or public entities that serve medically underserved populations. FQHCs are also called Community Health Centers (CHC). 

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  • Community based non-profit or public primary health care center
  • Located in or serving a designated Medically Under served Area (MUA) or within a Medically Under served Population (MUP)
  • Majority Consumer Board governance structure
  • Provide comprehensive scope of health services to individuals in all stages of life
  • Provide services to individuals regardless of ability to pay
  • Offer fee discount program based on family income and size
  • Comply with federal operational and clinical standards


  • Access to limited federal uncompensated care to support costs through Section 330 of the Public Health Service Act
  • Bundled Medicare and Medicaid reimbursement through Prospective Payment System
  • Access to medical malpractice coverage under Federal Tort Claims Act (FTCA)
  • Eligibility to purchase prescription and non-prescription medications at reduced cost through the 340B Drug Program
  • Access to competitive grant and loan guarantees/opportunities for capital improvements
  • Right to have Medicaid eligibility workers on-site to provide enrollment services Medicaid and Child Health Insurance Program (CHIP)
  • Reimbursement by Medicare for “first dollar” of services (deductible is waived)
  • Access to Vaccines for Children (VFC) Program for uninsured children
  • Access to National Health Service Corps (NHSC) Provider Placements;


There are 18 Core Health Center Program Requirements for which health centers must demonstrate ongoing compliance. These requirements are divided into the categories of Need, Services, Management and Finance, and Governance.

1. Need

Health center must demonstrate and document the health care needs of its service population and update its service area, when appropriate. Compliance requires that health centers perform. Periodic needs assessments, a needs assessment typically includes, but is not limited to a review of data on:

  • Population to Primary Care Physician FTE ratio
  • Percent of population at or below 200% of poverty 
  • Percent of uninsured population 
  • Proximity to providers who accept Medicaid and/or uninsured patients 
  • Health indicators (e.g., diabetes, hypertension, low birthweight, immunization rates) 
  • Assess and document the needs of its target population in order to improve the delivery of services most in need and appropriate for its service area.

2. Services

Health centers are required to provide mandatory services including primary, preventive, enabling health services and additional health services as appropriate and necessary to meet the needs of the target population. Services may be provided either directly or through established written arrangements and referral agreements with other providers.

  • Required and additional services-Mandatory services include primary care, dental, mental health, substance abuse, diagnostic lab and x-ray, prenatal and perinatal, cancer and other disease screening, education and treatment of communicable diseases, prenatal and perinatal, well child services, child and adult immunizations, eye and ear screening for children, family planning services, emergency medical services, obstetrical care, pharmaceutical, case management, outreach and education, eligibility/ Enrollment services, transportation and interpretation, and referrals. 
  • Staffing Requirements-Health center maintains a core staff as necessary to carry out all required primary, preventive, enabling health services and additional health services as appropriate. Staff must be appropriately credentialed and licensed. 
  • Accessible Hours of Operation/Location-Health center provides services at times and locations that assure accessibility and meet the needs of the population to be served.
  • After Hours Coverage-Health center provides professional coverage during hours when the center is closed. 
  • Hospital Admitting Privileges and Continuum of Care-Health center physicians have admitting privileges at one or more referral hospitals, or other such arrangement to ensure continuity of care. 
  • Sliding Fee Discount Program-Health center has a system in place to determine eligibility for patient discounts adjusted on the basis of the patient ability to pay. 
  • Quality Improvement and Assurance Plan-Health center has an ongoing Quality Improvement/Quality Assurance (QI/QA) program that includes clinical services and management. 
  • 3. Management and Finance 

  • Key Management Staff-Health center maintains a fully staffed health center management team as appropriate for the size and needs of the center. 
  • Contractual/Affiliation Agreements-Health center exercises appropriate oversight and authority over all contracted services, including assuring that any subrecipient(s) meets Health Center Program requirements. 
  • Collaborative Relationships-Health center makes effort to establish and maintain collaborative relationships with other health care providers, including other health centers, in the service area of the center. • Financial Management and Control Policies-Health center maintains accounting and internal control systems appropriate to the size and complexity of the organization and separates functions appropriate to organizational size to safeguard assets and maintain financial stability. 
  • Billing and Collections-Health center has systems in place to maximize collections and reimbursement for its costs in providing health services, including written billing, credit and collection policies and procedures. 
  • Budget-Health center has developed a budget that reflects the costs of operations, expenses, and revenues (including the Federal grant) necessary to accomplish the service delivery plan, including the number of patients to be served. 
  • Program Data Reporting Systems -Health center has systems which accurately collect and organize data for program reporting and which support management decision making. 
  • Scope of Project-Health center maintains its funded scope of project (sites, services, service area, target population, and providers), including any increases based on recent grant awards. 
  • 4. Governance

  • Board Authority- Health center governing board maintains appropriate authority to oversee the operations of the center, including: 
  • Carries legal and fiduciary responsibility for health center operations and grants
  • Strategic planning and evaluation of progress toward organizational goals 
  • Approve Annual Budget & Grant Application 
  • Full authority over all aspects of health center operations 
  • Board Composition-The health center governing board is composed of individuals, a majority of whom (at least 51%) are being served by the center and, who as a group, represent the individuals being served by the center in terms of demographic factors such as race, ethnicity, and sex.
  • Conflict of Interest Policy
  • Health center bylaws include provisions that prohibit conflict of interest by board members, employees, consultants, and those who furnish goods or services to the health center.