Is an FQHC a Fit for Your Community?

  1. What are Federally Qualified Health Centers (FQHCs)?
  2. What are the benefits of becoming an FQHC?
  3. What are the key requirements to qualify as an FQHC?
  4. How do I apply to become an FQHC?
  5. Who is MNACHC?


1. What are Federally Qualified Health Centers (FQHCs)?

Federally Qualified Health Centers (FQHCs) – often referred to as Community Health Centers (CHCs) – are nonprofit, community-directed health care providers serving low-income and medically underserved communities. Created by Congress over 50 years ago, FQHCs provide quality, affordable primary and preventive care for those whom other providers do not serve, regardless of an individual’s ability to pay.

In Minnesota, there are 17 FQHCs in both urban and rural areas that serve over 190,000 patients each year. For a listing of Minnesota’s FQHCs click here.

2. What are the benefits of becoming an FQHC?

There are many benefits of becoming an FQHC. Briefly, some of these benefits are:

FEDERAL DOLLARS TO SERVE THE UNINSURED FQHCs receive annual ongoing grant funding from the federal government (“Section 330 Grants”) to offset the costs of uncompensated care and other key enabling services.
MALPRACTICE COVERAGE The Federal Tort Claims Act (FTCA) provides free malpractice liability coverage to FQHC Board members, employees including clinicians, and certain contracted clinicians for acts conducted within the scope of the FQHC’s project.

Click here to learn more about the FTCA.

WORKFORCE RECRUITMENT AND RETENTION The National Health Service Corps program provides FQHC providers with health profession scholarships and loan repayment. Students may become eligible for scholarships in exchange for a promise to work in a Health Professional Shortage Area (HPSA), while current health professionals can receive loan repayment assistance if they work with approved organizations in an HPSA.

Click here to learn more about the NHSC.

ENHANCED MEDICARE AND MEDICAID REIMBURSEMENT FQHCs receive cost-based reimbursement for services to Medicare patients, and Prospective Payment System (PPS) reimbursement for Medicaid patients.
“FIRST DOLLAR” REIMBURSEMENT UNDER MEDICARE FQHCS receive reimbursement by Medicare for “first dollar” of services because deductible is waived if FQHC is providing the Medicare services.
FAVORABLE PRESCRIPTION DRUG PRICES FOR PATIENTS The federal 340B program allows FQHCs to purchase covered outpatient prescription pharmaceuticals for patients at substantially discounted prices. The FQHC may distribute the pharmaceuticals through their in-house pharmacy or through contract with a retail pharmacy.

Click here to learn more about the 340B program.

CAPITAL INVESTMENTS FQHCs are eligible to receive grant support and loan guarantees for capital improvements.

3. What are the key requirements to qualify as an FQHC?

There are many requirements for FQHC designation. Broadly, an FQHC must meet the following:

NON-FOR-PROFIT CORPORATION FQHCs must be a private not-for-profit or public organization.
COMPREHENSIVE PRIMARY CARE FQHCs must provide the required primary health services listed in section 330(b)(1) of the PHS Act, directly and/or by contract. In addition, the FQHC must provide “supportive services” (e.g., patient education, translation, outreach) that promote access to care.
LOCATED OR SERVE A HIGH NEED COMMUNITY The FQHC must provide care to either a Medically Underserved Area (MUA) or serve a Medically Underserved Population (MUP).

To learn more about the MUA/ MUP designation, click here.

SLIDING FEE SCHEDULE TO THE UNINSURED The FQHC must have a schedule of fee discounts for services based upon the patient’s family income and size.
INDEPENDENT, COMMUNITY BASED BOARD OF DIRECTORS FQHCs boards must reflect the larger community using the health center. Consequently, at least 51% of board members must be regular consumers of the health center. In addition, the FQHC must have an independent Board of Directors that exercises key authorities.

In addition to these broad areas, there are Specific HRSA Requirements that all FQHCs must meet. Click here for a summary of HRSA’s Health Center Program Requirements. For a full exploration of the FQHC requirements, please visit

4. How do I apply to become an FQHC?

Funding for new FQHCs is announced periodically by HRSA based on funding allocated by Congress. As a key step in preparation, MNACHC encourages applicants to make sure your location or population served is eligible and that you have community support.

The National Association of Community Health Centers (NACHC), provides a broad range of services and trainings. NACHC has created “So You Want to Start a Health Center…? A Practical Guide for Starting a Federally Qualified Health Center” to assist those interested in starting an FQHC. HRSA has also created a webpage on “How to Become a Health Center.

5. Who is MNACHC?

The Minnesota Association of Community Health Centers (MNACHC) is a non-profit membership organization of Minnesota’s Federally Qualified Health Centers (FQHCs). MNACHC works on behalf of its members and their patients to promote the cost-effective delivery of affordable, quality primary health care services, with a special emphasis on meeting the needs of low income and medically underserved populations. Visit our About pages to learn more.