Federally qualified health centers (FQHC) are federally funded nonprofit health centers or clinics that provide care to medically underserved areas and residents. FQHCs support the community by providing primary care services regardless of one's ability to pay [1]. These types of programs are intended to help decrease healthcare costs, emergency room visits, and hospitalizations in underserved communities, ultimately reducing costs for state Medicaid programs [2]. This course will provide an overview of FQHCs as a model of delivering and preserving health care. There are three types of centers: health centers, FQHC look-alikes, and FQHC clinics. For the purpose of this course, the focus will be on FQHC clinics.

The first FQHC was established in 1965 as part of President Johnson's "War on Poverty." Nearly $11 billion has been allocated to the FHQC Trust Fund as part of the Affordable Care Act since its inception [3]. Approximately 60% of patients being served by FQHCs are 18 to 64 years of age, 31% are younger than 18 years of age, and 7.4% are 65 years of age or older. Nearly 92% of those served are at an income level of at or below 200% of the federal poverty level [2]. As of 2024, there are 9,754 FQHCs in the United States, serving more than 24 million individuals [4].

The following services are provided at FQHCs [5,6]:

Preventive health services

Hospital and specialty care

Dental services

Mental health and substance abuse services

Transportation services necessary for adequate patient care

Translation services for patients with limited English proficiency

Health education (e.g., diabetes management, medical nutrition therapy)

Pharmacotherapy

Hospice services (when the physician, nurse practitioner [NP], or physician assistant/associate [PA] who is employed or under contract for an FQHC but is not employed by a hospice program provides the services)

Obstetrics/gynecology services

Telehealth services, as applicable

FQHCs qualify for funding under Section 330 of the Public Health Service Act. This Act enables the Bureau of Primary Health Care (BPHC) to grant funding to FQHCs that have met specified requirements [8]. In general, FQHCs are required to have services of primary care capability, such as those related to family practice services for all ages, obstetrics, and gynecology, along with laboratory and diagnostic services. There should also be access to emergency medical services and pharmacy services [9]. To certify as an FQHC, a facility may also operate as an outpatient health program of a tribal organization under the Indian Self-Determination Act or as an urban Indian organization getting funds under Title V of the Indian Health Care Improvement Act of October 1991. All requirements of Section 330 of the PHA must be met, including [10]:

Serving a designated medically underserved area or medically underserved population

Offer a sliding fee scale to persons with incomes below 200% of the federal poverty guidelines

Government by a board of directors, composed of a majority of members who get care at the FQHC

As discussed, funding for FQHC is based on Section 330 of the PHA. The Patient Protection and Affordable Care Act of 2010 reformed how payments were made for services at FQHCs. The prospective payment system (PPS) was initiated with FQHC for payments, which sets payments on a national rate adjusted based on the location of services furnished [21]. Upon billing, the FQHC site-specific G-code must be used in billing of the visit to properly submit the claim [22]. As of 2024, the base rate nationally for a visit without price rate changes on a sliding fee schedule is $181.19, which is 3.9% higher than the base rate in 2022 [23].

A certified FQHC clinic is required to maintain a quality improvement/assurance system (QI/QA) to assess clinical management and ensure confidentiality of patient records. The QI/QA program must address [26]:

The quality and utilization of health center services

Patient satisfaction and patient grievance processes

Patient safety, including adverse events

The FQHC board members include non-consumers, non-representative consumers, and representative consumers. As noted, at least 51% of the governing board must consist of consumers, (i.e., those who utilize the services of the center). This requirement originated during the 1960s with the intent of empowering those who are served by the center [3].

At a minimum, the board must have 9 members; it may have no more than 25 members. The board should also be representative of the patient population, with consideration to demographic characteristics such as race, ethnicity, and sex/gender. Non-consumer members of the board should represent the community in which the FQHC service area is established and should be designated for their knowledge and proficiency in community affairs, local government, finance and banking, legal affairs, trade unions, and/or other commercial and industrial concerns or social service agencies within the community. Appointed non-consumer governing board members are not allowed to receive more than 10% of their annual income from the healthcare industry [18,28,32].

The FQHC board is responsible for overseeing the operations of the health center in conjunction with the leadership of the center. The board must hold monthly meetings. It is liable for [18,28]:

The center's grant application and annual budget; selection and or dismissal of the Chief Executive Officer (CEO), including the performance evaluation of said subject

Selection of the organization's services, including the hours of operation

Measurement and annual evaluation of the FQHC's progress related to program and financial goals

Review of the mission and by-laws of the organization

Evaluation of patient satisfaction and the handling of grievances

Development of general policies for center

FQHCs must demonstrate many items to maintain certification, and this is done via an HRSA site visit. Site visits are typically conducted every 12 to 16 months, with renewal periods of one and three years, depending on compliance concerns. If compliance is of concern and a facility receives a one-year renewal period, a site visit will typically take place within two to four months of the new performance review timeframe [10,29,30,31]. A full explanation of the site visit protocol is available online at https://bphc.hrsa.gov/compliance/site-visits/site-visit-protocol.