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Federally Qualified Health Center

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A Federally Qualified Health Center (FQHC) is a community-based health care organization that provides comprehensive primary care and support services to underserved populations in the United States. These centers serve patients regardless of immigration status, insurance coverage, or ability to pay. FQHCs are a key component of the nation’s primary care safety net and aim to reduce barriers to health care access for low/moderate-income and minority populations.

Defined by Medicare and Medicaid statutes, FQHCs include organizations i) receiving grants under Section 330 of the Public Health Service Act (PHSA), ii) clinics meeting certification requirements (known as FQHC "Look-Alikes"), and iii) outpatient facilities operated by tribal or urban Indian organizations. FQHC services, as outlined by Medicare, include rural health clinic services (such as physician services, those provided by physician assistants, nurse practitioners, nurse midwives, visiting nurses, clinical psychologists, social workers, and related services and supplies), diabetes self-management training, medical nutrition therapy, and preventive primary health services mandated under Section 330 of the PHSA.

History

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Federally Qualified Health Centers (FQHCs) were established in 1965 as part of President Lyndon Johnson's War on Poverty to improve health care access in low-income and medically underserved areas.[1][2]

During the 1980s, health centers faced challenges in securing reimbursements from Medicare and Medicaid due to restrictive state payment rates and eligibility criteria, limiting their financial resources. A major turning point came at the end of the decade with the creation of the Federally Qualified Health Center designation, under the Omnibus Budget Reconciliation Act.[3] Introduced for Medicaid in 1989 and Medicare in 1990, this designation allowed HRSA-funded health centers to receive cost-based reimbursement rates. Covered services included those provided by physicians, physician assistants, nurse practitioners, certified nurse midwives, clinical psychologists, and clinical social workers. The FQHC designation also introduced "Health Center Program look-alikes," which meet all HRSA funding requirements under Section 330 of the Public Health Service Act but do not receive direct HRSA funding. These look-alikes are eligible for FQHC reimbursement rates and other benefits available to HRSA-funded centers.[4]

FQHCs demonstrated notable success in delivering high-quality, cost-effective health care to vulnerable populations despite the challenges involved. In recognition of this, Congress permanently authorized the program.[1] The Affordable Care Act (ACA) significantly expanded FQHCs by allocating $11 billion through the Community Health Center Fund between 2011 and 2015, supporting the establishment and expansion of delivery sites.[5] By 2014, the number of FQHCs grew by 82.7% to 6,376, with most new sites in urban areas. A 2019 study shows that new markets were less likely to serve rural or high-poverty populations compared to earlier ones.[3]

FQHCs have evolved into comprehensive medical homes offering person-centered care and addressing disparities among low/moderate-income and minority populations.[5] Federal initiatives, including the Health Center Growth Initiative in 2002, the $11 billion Community Health Center Fund under the 2010 Affordable Care Act, the 2009 American Recovery and Reinvestment Act, and subsequent investments, have further increased the number of FQHC sites to over 8,000, serving approximately 1 in 13 Americans.[3]

Before FQHCs were established in the 1980s, structural factors such as redlining-perpetuated segregation, contributing to ongoing inequities in healthcare access for communities that historically faced barriers and were excluded from quality, trustworthy medical services.[6]

Overview

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FQHCs adhere to an "open door" policy, offering care regardless of patients' financial ability to pay, and predominantly serve uninsured individuals and Medicaid beneficiaries.[7] As defined under Medicare and Medicaid statutes, FQHCs include organizations receiving grants under Section 330 of the Public Health Service Act (PHSA), FQHC Look-Alikes (certified clinics meeting Section 330 requirements but without HRSA funding), and outpatient facilities operated by tribal or urban Indian organizations. These centers provide a range of services, including those offered by physicians, physician assistants, nurse practitioners, nurse midwives, clinical psychologists, social workers, and other health professionals. They also deliver diabetes self-management training, medical nutrition therapy, and preventive primary health services mandated by Section 330.[8]

FQHCs serve as essential health care providers, offering medical, dental and behavioral health care[9] to individuals irrespective of their insurance status or income. They also address non-financial barriers to health care through enabling services, such as housing support, transportation, and nutritional assistance.[9] FQHCs must comply with standards set by the HRSA, including governance, quality reporting, and operational criteria, and ensure accessibility through a sliding fee scale based on patients' income.[10] Federal regulations partially determine FQHC locations, requiring them to be situated in medically underserved areas (MUAs) or regions with medically underserved populations. According to the HRSA, MUAs are characterized by a shortage of primary care providers, elevated infant mortality rates, high poverty levels, or a significant elderly population. However, many MUAs lack FQHCs, likely due to insufficient investment at the state and health system levels in developing FQHC networks.[11]

FQHCs are a key recruitment stream of underrepresented biomedical research participants.[12]

Organization

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Consumer governance is a defining feature of FQHCs, mandating that at least 51% of governing board members must be patients of the center. According to the HRSA, which administers the FQHC program:

“Since the intent is for consumer board members to give substantive input into the health center’s strategic direction and policy, these members should utilize the health center as their principal source of primary health care…[Additionally,] the board should be comprised of members with a broad range of skills and expertise. Finance, legal affairs, business, health, managed care, social services, labor relations and government are some examples of the areas of expertise needed by the board to fulfill its responsibilities (Bureau of Primary Health Care 1998a: 22)."

This structure, inspired by the participatory democracy ethos of the Civil Rights Movement and a strong sentiment of "antiprofessionalism" aimed at empowering the poor, seeks to make FQHCs more attuned to community needs by amplifying the voices of underrepresented patients. The principle of consumer governance emphasizes that representatives who share key characteristics with those they serve (descriptive representation) are more likely to advocate effectively for their interests (substantive representation). Challenges such as socioeconomic disparities among board members and gaps in the technical expertise needed for governance have complicated its implementation. A 2012 study indicated that while many board members are FQHC patients, a notable portion did not reflect the socioeconomic profile of typical FQHC users. Despite this, FQHCs have achieved a degree of descriptive representation, with approximately 20-25% of board members being representative of the patient population.[1]

Health centers face challenges in care integration, particularly in coordination with hospitals. Federally required governance by independent, community-based boards can impede consolidation with larger health systems, leaving health centers reliant on formal agreements for coordination. Studies suggest that better integration of care processes between hospitals and health centers enhances communication during acute care episodes, but many centers struggle to establish effective notification agreements. Improved electronic health record sharing and health information exchange capabilities could bolster these efforts. Integration levels vary by health center size and market competitiveness, with greater integration activity linked to improved communication during and after inpatient stays and emergency visits. New payment models may provide additional incentives to strengthen care coordination between health centers and hospitals.[13]

Funding

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The federal government serves as the primary funder of FQHCs,[14] providing reimbursement through Medicaid and Medicare for comprehensive primary care services.[15] FQHCs are reimbursed by Medicare on a cost-based system, subject to a per-visit payment cap and productivity standards. Payments are made on an all-inclusive per-visit rate, except for certain vaccines, which are reimbursed at cost. Final payment rates are calculated by dividing total allowable costs by the total number of visits, capped by an annual payment limit adjusted by the Medicare Economic Index (MEI) and differentiated between urban and rural centers.[16]

While the majority of FQHCs are operated by non-profits, public agencies, such as municipal governments, also operate clinics. Federal health center grants for public agencies are capped at 5% under Section 330 of the US Public Health Service Act (as of 2022), though the rationale for this limit is unclear.[17] Publicly operated FQHCs, comprising 7% of all FQHCs, serve 1.8 million patients and receive 5% of federal health center grants. These entities include local health departments, city/county governments, public hospital systems, and universities. Public and private FQHCs serve similar numbers of patients and share comparable proportions of racial/ethnic minorities and individuals below the federal poverty line, although public FQHCs tend to serve a higher proportion of uninsured patients, fewer Medicare patients, and slightly fewer individuals with diabetes and hypertension.[17]

Medicaid is the largest revenue source for FQHCs, but Medicare offers financial incentives, such as higher per-visit fees compared to non-FQHC providers, making FQHC status attractive. Under the Affordable Care Act, Medicare transitioned to a Prospective Payment System (PPS) in 2014, offering additional payments for preventive services and new Medicare patients. With an aging U.S. population, FQHCs are expected to play a growing role in caring for elderly Medicare beneficiaries, particularly those with chronic conditions. Between 2005 and 2014, the number of FQHC patients aged 55–64 and 65–74 increased by 132% and 92%, respectively.[18]

To achieve FQHC certification, health centers must apply for grants from the HRSA Health Center Program. Certified FQHCs often operate multiple delivery sites. Data on FQHC expansion is typically organized by grantee rather than service site, limiting insights into individual delivery locations.[18]

Billions of federal dollars have been allocated through the Affordable Care Act's Community Health Center Fund and the American Rescue Plan to establish, expand, and sustain FQHCs nationwide.[19]

Funded programs

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Health programs funded include:[20]

  • Community Health Centers which serve a variety of federally designated Medically Underserved Areas/Populations (MUA or MUP).
  • Migrant Health Centers which provide culturally competent and primary preventive medical care to migrant and seasonal agricultural workers.[21]
  • Health Care for the Homeless Programs which reach out to homeless individuals and families and provide primary and preventive care and substance abuse services[21] and
  • Public Housing Primary Care Programs that serve residents of public housing and are located in or adjacent to the communities they serve.[21]

Leadership

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FQHCs operate under a consumer Board of Directors governance structure and function under the supervision of the Health Resources and Services Administration (HRSA), which is part of the United States Department of Health and Human Services (HHS). FQHCs were originally meant to provide comprehensive health services to the medically underserved to reduce the patient load on hospital emergency rooms.

Their mission has changed since their founding. Their mission now is to enhance primary care services in underserved urban and rural communities.[22] In particular, they serve underserved, underinsured, and uninsured Americans, including migrant workers and non-U.S. citizens.[23]

FQHCs provide their services to all persons regardless of ability to pay, and charge for services on a community board approved sliding-fee scale that is based on patients' family income and size. FQHCs must comply with Section 330 program requirements.[23]

In return for serving all patients regardless of ability to pay, the centers receive from the Federal government cash grant, cost-based reimbursement for their Medicaid patients, and malpractice coverage under the Federal Tort Claims Act (FTCA).[24]

Look-Alikes

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The government also designates a category of health centers as "FQHC Look-Alikes." These health centers do not receive grants under Section 330 but are determined by the Secretary of the Department of Health and Human Services (HHS) to meet the requirements for receiving a grant based on the Health Resources and Services Administration recommendations.[22] Also, FQHC Look-Alikes receive cost-based reimbursement for their Medicaid services, but do not receive malpractice coverage under FTCA or a cash grant. Look-Alikes also qualify as health professional shortage areas (HPSA) automatically.

Services under Medicare

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FQHC benefit under Medicare became effective October 1, 1991, when Section 1861(aa) of the Social Security Act was amended by Section 4161 of the Omnibus Budget Reconciliation Act of 1990.[22] FQHCs provide Medicare beneficiaries with preventive primary health services such as immunizations, visual acuity and hearing screenings, and prenatal and post-partum care.[22] However, eyeglasses, hearing aids, and preventive dental services are not covered under the FQHC preventive primary services. A FQHC Prospective Payment System (PPS) was scheduled to be implemented in 2014.[22] The Patient Protection and Affordable Care Act (ACA) mandates that the Centers for Medicare and Medicaid Services (CMS) collect and analyze health services data prior to developing and implementing the new payment system. This requires that the appropriate revenue code and Healthcare Common Procedure Coding System (HCPCS) code be listed with each service provided.[22] Currently,[when?] Medicare pays FQHC directly based on an all-inclusive per visit payment.[22]

Advanced Primary Care Practice demonstration project

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In June 2011, the Department of Health and Human Services announced the Federally Qualified Health Center Advanced Primary Care Practice (FQHC APCP) demonstration project.[25] This demonstration project is conducted under the authority of Section 1115A of the Social Security Act, which was added by section 3021 of the ACA and establishes the Center for Medicare and Medicaid Innovation (Innovation Center).[26] The CMS and Innovation Center in partnership with HRSA will operate the demonstration.[22][26] This initiative was designed to evaluate the impact of the advanced primary care practice (APCP) model, also referred to as the patient-centered medical home (PCMH) on improving health, quality of care and lowering the cost of care provided to Medicare beneficiaries.[22][26] The ACA will pay an estimated $42 million over three years (November 1, 2011 to October 31, 2014) to 500 FQHCs to coordinate care for 195,000 Medicare patients.[22][25][26] Participating FQHCs agree to adopt care coordination practices set by the National Committee for Quality Assurance (NCQA) and are expected to achieve Level 3 patient-centered medical home recognition.[22][25]

President Bush launched the Health Centers Initiative to significantly increase access to primary health care services in 1,200 communities through new or expanded health center sites. Between 2001 and 2006, the number of patients treated at health centers increased by over 4.7 million, representing a nearly 50 percent increase in just five years. In 2006 the number of patients served topped the 15 million mark for the first time.[citation needed]

Throughout the United States there are over 1,000 health centers that operate approximately 6,000 sites.[27] In 2010, the health centers served an estimated 20 million patients.[21] The data collected via the Uniform Data System (UDS) reports that of those patients served, 62 percent were members of a racial or ethnic minority (predominantly Hispanic), 93 percent lived at or below 200 percent of the federal poverty level, 72 percent lived at or below 100 percent of the federal poverty level, and 38 percent were uninsured.[28] In particular, during 2010 health centers served 862,775 migrant and seasonal farm workers and their families; more than 1 million individuals experiencing homelessness; and 172,731 residents of public housing.[21]

Total centers by location

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FQHCs in 2016[29]
State or Territory FQHCs
Alabama 14
Alaska 28
American Samoa 1
Arizona 21
Arkansas 12
California 176
Colorado 20
Connecticut 16
Delaware 3
District of Columbia 8
Fed. States of Micronesia 3
Florida 48
Georgia 35
Guam 1
Hawaii 14
Idaho 14
Illinois 45
Indiana 25
Iowa 14
Kansas 18
Kentucky 23
Louisiana 34
Maine 18
Marshall Islands 1
Maryland 17
Massachusetts 39
Michigan 39
Minnesota 16
Mississippi 21
Missouri 28
Montana 17
Nebraska 7
Nevada 5
New Hampshire 11
New Jersey 23
New Mexico 17
New York 65
Northern Marianas 1
North Carolina 38
North Dakota 4
Ohio 45
Oklahoma 20
Oregon 31
Pennsylvania 44
Puerto Rico 20
Republic of Palau 1
Rhode Island 8
South Carolina 22
South Dakota 5
Tennessee 29
Texas 73
Utah 13
Vermont 11
Virgin Islands 2
Virginia 26
Washington 28
West Virginia 27
Wisconsin 17
Wyoming 6
Total 1,367

References

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  1. ^ a b c Wright, Brad (2012-10-10). "Who Governs Federally Qualified Health Centers?". Journal of Health Politics, Policy and Law. 38 (1): 27–55. doi:10.1215/03616878-1898794. PMC 5602556. PMID 23052684.
  2. ^ Alexander, Abbye E.; Tellner, Christopher J.; Van Embden, Talya (May 2, 2023). "End of a pandemic era: What now for Federally Qualified Health Centers?". Reuters.
  3. ^ a b c Chang, Chiang-Hua; P.W. Bynum, Julie; Lurie, Jon D. (June 2019). "Geographic Expansion of Federally Qualified Health Centers 2007–2014". The Journal of Rural Health. 35 (3): 385–394. doi:10.1111/jrh.12330. ISSN 0890-765X. PMC 6478577. PMID 30352132.
  4. ^ "Health Center Program History: The 1980s | Bureau of Primary Health Care". Health Resources and Services Adminstration. Retrieved 2024-12-26.
  5. ^ a b Ford, Mary M.; Allard, Angela; Goldberg, Jordan; Summers, Cynthia (2022-01-01). "Federally Qualified Health Center Penetration Associated With Reduced Community COVID-19 Mortality in Four United States Cities". Journal of Primary Care & Community Health. 13: 21501319221138422. doi:10.1177/21501319221138422. ISSN 2150-1319. PMC 9716186. PMID 36448474.
  6. ^ Lee, Eun Kyung; Donley, Gwendolyn; Ciesielski, Timothy H.; Freedman, Darcy A.; Cole, Megan B. (2023-07-01). "Spatial availability of federally qualified health centers and disparities in health services utilization in medically underserved areas". Social Science & Medicine. 328: 116009. doi:10.1016/j.socscimed.2023.116009. ISSN 0277-9536. PMID 37301106.
  7. ^ Cite error: The named reference :92 was invoked but never defined (see the help page).
  8. ^ "Medicare Provisions in the Patient Protection and Affordable Care Act (PPACA): Summary and Timeline" (PDF). Congressional Research Service. November 3, 2010.
  9. ^ a b Cite error: The named reference :42 was invoked but never defined (see the help page).
  10. ^ Conway, Sarah J.; Murphy, Jacob; Efron, Jonathan E. (January 2024). "Academic Medical Centers and Federally Qualified Health Centers: Collaboration for the Care of Underserved Communities". Journal of Primary Care & Community Health. 15. doi:10.1177/21501319241266121. ISSN 2150-1319. PMC 11273575. PMID 39051652.
  11. ^ Cite error: The named reference :102 was invoked but never defined (see the help page).
  12. ^ Kini, Soumya; Cawi, Kimberly Marie; Duluk, Dave; Yamazaki, Katrina; McQueen, Matthew B. (2024-06-04). "Understanding the use of CATI and web-based data collection methods during the pandemic among digitally challenged groups at FQHCs: data from the All of Us Research Program". Frontiers in Digital Health. 6. doi:10.3389/fdgth.2024.1379290. ISSN 2673-253X. PMC 11183497. PMID 38895514.
  13. ^ Timbie, Justin W.; Kranz, Ashley M.; Mahmud, Ammarah; Setodji, Claude M.; Damberg, Cheryl L. (September 2019). "Federally Qualified Health Center Strategies for Integrating Care with Hospitals and Their Association with Measures of Communication". The Joint Commission Journal on Quality and Patient Safety. 45 (9): 620–628. doi:10.1016/j.jcjq.2019.06.004. PMC 6997610. PMID 31422904.
  14. ^ "Federally Qualified Health Centers Can Help Address the Opioid Crisis". Pew Charitable Trusts. 2024-01-30. Retrieved 2024-12-25.
  15. ^ Cite error: The named reference :22 was invoked but never defined (see the help page).
  16. ^ Cite error: The named reference :62 was invoked but never defined (see the help page).
  17. ^ a b Kishore, Sanjay; Johnson, Micah; Nayak, Rahul (March 2022). "Characteristics of Public vs. Private Federally Qualified Health Centers". Journal of General Internal Medicine. 37 (4): 987–989. doi:10.1007/s11606-021-06761-1. ISSN 0884-8734. PMC 8904670. PMID 33904048.
  18. ^ a b Cite error: The named reference :52 was invoked but never defined (see the help page).
  19. ^ Cite error: The named reference :103 was invoked but never defined (see the help page).
  20. ^ "About the Health Center Program". bphc.hrsa.gov. Retrieved 2018-03-28.
  21. ^ a b c d e "Special Populations". Department of Health and Human Services. Health Resources and Services Administration. Archived from the original on 12 January 2012.
  22. ^ a b c d e f g h i j k "Federally Qualified Health Center". Department of Health and Human Services. Centers for Medicare and Medicaid Services. November 2011.
  23. ^ a b "Health Center Program Compliance Manual" (PDF). bphc.hrsa.gov. 2017. Retrieved 2018-03-27.
  24. ^ "About the Federal Tort Claims Act (FTCA)". bphc.hrsa.gov. Retrieved 2018-03-28.
  25. ^ a b c "New Affordable Care Act support to improve care coordination for nearly 200,000 people with Medicare". Department of Health and Human Services. June 2011.
  26. ^ a b c d "Medicare Demonstrations: FQHC APCP FAQs". Centers for Medicare and Medicaid Services. Archived from the original on 2012-03-16. Retrieved 2012-02-01.
  27. ^ Michelle M. Doty; Melinda K. Abrams; Susan E. Hernandez; Kristof Stremikis; Anne C. Beal (May 2010). "Enhancing the Capacity of Community Health Centers to Achieve High Performance". The Commonwealth Fund.
  28. ^ "Health Center Data". Department of Health and Human Services. Health Resources and Services Administration. Archived from the original on 2012-02-01. Retrieved 2012-02-01.
  29. ^ "Number of Federally-Funded Federally Qualified Health Centers, 2016". The Henry J. Kaiser Family Foundation.
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