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Alternative Medicaid Options

Federally Qualified Health Centers are important safety net providers in rural areas. FQHCs are outpatient clinics that qualify for specific reimbursement systems under Medicare and Medicaid. They include federally designated Health Center Program awardees, and certain outpatient clinics associated with tribal organizations.

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Federally Qualified Health Centers (FQHCs)

Approximately 1 in 6 rural residents are served by the Health Center Program, according to the Health Resources and Services Administration (HRSA) Bureau of Primary Health Care (BPHC). Health centers provide a comprehensive set of health services including primary care, behavioral health, chronic disease management, preventive care, and other specialty, enabling, and ancillary services, which may include radiology, laboratory services, dental, transportation, translation, and social services. In order to be a qualified entity in the federal Health Center Program, an organization must:

  • Offer services to all, regardless of the person’s ability to pay
  • Establish a sliding fee discount program
  • Be a nonprofit or public organization
  • Be community-based, with the majority of its governing board of directors composed of patients
  • Serve a Medically Underserved Area or Population
  • Provide comprehensive primary care services
  • Have an ongoing quality assurance program

The Bureau of Primary Health Care (BPHC) Health Center Compliance Manual provides additional information on health center requirements.

There are several distinctions that should be understood related to health centers:

  • Health Center Program Awardee:
    • Health Center Grantee: Health centers that receive grant funding from the Health Resources and Services Administration (HRSA) Bureau of Primary Health Care, under the Health Center Program, as authorized by Section 330 of the Public Health Service (PHS) Act. Most grants provide support to contribute to serving an entire underserved community (or service area), while others fund specific underserved populations as mandated in the Section 330 authorization, such as agricultural workers, persons experiencing or at risk for homelessness, and residents of public housing.
    • Health Center Look-Alikes: Look-alikes are health centers that have been certified by the federal government as meeting all the Health Center Program requirements, but do not receive grant funding under the Health Center Program.
  • Federally Qualified Health Center (FQHC): FQHCs are outpatient clinics that qualify for specific reimbursement systems under Medicare and Medicaid. FQHCs include federally-supported health centers (both grantees and look-alikes) as well as certain outpatient clinics associated with tribal organizations. Note that different rules may apply to outpatient clinics associated with tribal organizations who enroll in Medicare or Medicaid as FQHCs.
  • Health Center: A non-specific term that does not identify whether a health facility is a Health Center Program grantee, a health center look-alike, or an FQHC.

For the remainder of this guide, the term health centers will be used to refer to Health Center Program grantees, look-alikes, and FQHCs.

If you are interested in becoming an FQHC, see How to Become a Health Center and So You Want to Start a Health Center…? A Practical Guide for Starting a Federally Qualified Health Center.


Information Source: Federally Qualified Health Centers (FQHCs)


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