What is an FQHC in Healthcare?

Posted By Steve Alder on Aug 13, 2024

An FQHC in healthcare is a Federally Qualified Health Center that provides low cost “safety net” medical services in an underserved area or to an underserved population. Qualifying FQHCs are funded by Federal grants and receive cost-based reimbursement for Medicare and Medicaid patients. They also qualify for malpractice coverage under the Federal Tort Claims Act (FTCA).

FQHCs in healthcare are more commonly known as Community Health Centers as they were originally privately funded non-profit clinics serving the poorest urban areas. Federal support for Community Health Centers started in the 1960s; and, in 1990, the term Federally Qualified Health Center was added to the Social Security Code to distinguish Community Health Centers that provided services for patients under Medicare and Medicaid.

In 1996, the Health Centers Consolidation Act expanded the definition of an FQHC in healthcare to include Migrant Health Centers, Health Care for the Homeless Programs, and Public Housing Primary Care Programs that received federal grants. The Act also added a new Section to the Public Health Act (Section 330) which specified the nature of services to be provided by an FQHC in healthcare and the conditions for funding.

What is a Qualifying FQHC in Healthcare?

A qualifying FQHC in healthcare is a Community Health Center that provides mostly preventative services to low-income, uninsured, and vulnerable populations that would otherwise not have access to healthcare. The services must be provided regardless of an individual’s ability to pay and on a sliding scale of fees according to the individual’s income compared to HHS’ Poverty Guidelines.

In addition, a qualifying FQHC in healthcare must be governed by a board of directors, of whom at least 51% receive care at the Community Health Center. This requirement dates back to the 1960s when, in order to qualify for federal funding, Community Health Centers had to have extensive community involvement to ensure they remained responsive to the needs of the community and community-specific health issues.

What Services Can an FQHC Provide?

Because FQHCs in healthcare are community-based, the services provided by one FQHC could be very different from the services provided by another FQHC depending on the location, the demographic being served, and factors such as age, gender, and ethnicity. In most cases, an FQHC must provide “required primary health services”, and substance use disorder services if providing health care for homeless populations.

In addition, an FQHC can provide or organize additional services appropriate to meet the health needs of the community provided the additional services are approved by HHS’ Health Resources and Services Administration (HRSA). The additional services do not have to be medical and can include environmental services such as sewage treatment or injury preventions programs (i.e., for migrant agricultural communities).

What is a Look-Alike FQHC in Healthcare

A Look-Alike FQHC in healthcare is a Community Health Center that meets the requirements to qualify as an FQHC but does not receive grant funding nor malpractice coverage. There are several reasons why a Look-Alike might not receive grant funding. It could be – for example – that the health center is a hybrid organization, that it is waiting to receive FQHC accreditation, or that it does not meet the criteria for available grants.

Although they do not receive grant funding, a Look-Alike FQHC in healthcare still benefits from reimbursements based on the Medicare Prospective Payment System and eligibility to purchase outpatient drugs at reduced cost under the 340B Drug Pricing Program. In addition, members of a Look-Alike FQHC’s workforce benefit from training scholarships and financial assistance through the National Health Service Corps program.

HIPAA Training for Federally Qualified Health Centers (FQHC)

Federally Qualified Health Centers must provide HIPAA training to all workforce members and maintain documentation that training covers the HIPAA Privacy Rule, HIPAA Security Rule, and HIPAA Breach Notification Rule. Training must be provided during onboarding for new workforce members who create, access, use, disclose, or safeguard protected health information in clinical, administrative, and operational activities. Annual HIPAA training is industry best practice for refresher coverage and reinforcement of baseline requirements. Training on HIPAA rules and regulations is a first step that establishes workforce understanding before additional internal policies and procedures are introduced. The HIPAA Journal Training for Employees is online, comprehensive, and suitable for onboarding and annual refresher training, with completion records that support compliance tracking and audit documentation.

What Does FQHC Compliance Consist Of?

In addition to the compliance requirements that are standard to all healthcare organizations (i.e., HIPAA compliance, CMS Conditions of Participation, etc.). FQHCs and Look-Alike FQHCs are required to comply with HRSA’s Standards for Health Centers. These include maintaining their eligibility to qualify as an FQHC in healthcare, fulfilling the criteria for clinical staffing, and ensuring emergency out-of-hours coverage.

Furthermore, FQHCs and Look-Alike FQHCs are required to submit an annual progress reports and renew their FQHC designations every three years. Health centers wishing to find out more about becoming a Federally Qualified Health Center can find out more about the FQHC compliance requirements in the HRSA’s Compliance Manual, or by speaking with a healthcare compliance professional.