What is an FQHC?
Federally Qualified Health Centers (FQHC) were created by congress to allow special Medicare and Medicaid payments for Community/Migrant Health Centers thereby ensuring that grant dollars intended for the uninsured were available for that purpose. Congress also authorized the special Medicare and Medicaid payments for clinics that operate in compliance with the requirements of the FQHC program, but that do not receive grant funding under Section 330 of the Public Health Service (PHS) Act which are known as "look-alikes." As stated in the January, 2013, MLN Fact sheet, the main purpose of the FQHC Program is to enhance the provision of primary care services in underserved urban and rural communities.

There are several criteria that must be met to qualify for FQHC Designation. This includes the following:
Is receiving a grant under Section 330 of the PHS Act.
Is receiving funding from a grant under a contract with the recipient of a grant and meets the requirements to receive a grant under Section 330 of the PHS Act.
Is not receiving a grant under Section 330 of the PHS Act but is determined by the Secretary of the Department of Health & Human Services (HHS) to meet the requirements for receiving such a grant (i.e., qualifies as a FQHC look-alike) based on the recommendation of the Health Resources and Services Administration.
Was treated by the Secretary of the Department of HHS for purposes of Medicare Part B as a comprehensive Federally funded health center as of January 1, 1990; or
Is operating as an outpatient health program or facility of a tribe or tribal organization under the Indian Self-Determination Act or as an urban Indian organization receiving funds under Title V of the Indian Health Care Improvement Act as of October 1, 1991.
FQHC Services are covered at the FQHC, the patient's place of residence, or at the scene of an accident.
FQHCs provide primary care services and preventive primary health services.
FQHCs receive cost-based reimbursement and payment is made directly to the FQHC. The FQHC all-inclusive visit rate is calculated by dividing the FQHCs total allowable cost by the total number of visits for all FQHC patients. The payment methodology includes two national per-visit upper payment limits - one for the urban FQHC and one for the rural FQHC.
Just like the RHC, FQHCs may be hospital owned or independent (owned by a not-for-profit or public entity).

RHC/FQHC Comparison of Basic Eligibility Criteria





Non-urbanized Area


Shortage Area

MUA/HPSA or Governor Designated Shortage Area


Corporate Structure

Unincorporated, public, non-profit or for-profit

Tax-exempt nonprofit or public

Board of Directors



Clinical Staffing

Mid-Level Practitioner required at least 50% of clinic open hours

No specific requirements

FQHCs are required to provide additional services when comparing to that of an RHC. These requirements must be available on-site or under arrangement and include the following:

Primary care for all life-cycle ages, emergency care, pharmacy, preventive health, preventive dental, transportation, case management, dental screening for children, and after hours care.

There are other areas of additional criteria that must be met comparing to the RHC. See the CMS website to find out more or contact HSA for more information.