Health Center Program Compliance Manual
1
Health Center Program
Compliance Manual
Last updated: August 20, 2018
Technical Revision: April 14, 2023
Health Center Program Compliance Manual
2
Table of Contents
Introduction ............................................................................................................................ 6
Applicability .............................................................................................................................. 6
Purpose ..................................................................................................................................... 6
Structure of the Health Center Program Compliance Manual ................................................... 7
Additional Health Center Responsibilities ................................................................................. 8
Chapter 1: Health Center Program Eligibility ......................................................................... 10
Non-Profit Organizations ........................................................................................................ 10
Public Agency Organizations ................................................................................................... 10
Tribal or Urban Indian Organizations ...................................................................................... 11
Additional Eligibility Requirements for Look-Alike Designation .............................................. 11
Chapter 2: Health Center Program Oversight ......................................................................... 13
Program Oversight .................................................................................................................. 13
Progressive Action Overview ................................................................................................... 15
Progressive Action Process ...................................................................................................... 16
Immediate Enforcement Actions............................................................................................. 18
Program Compliance and Application Review and Selection .................................................. 19
Chapter 3: Needs Assessment ............................................................................................... 21
Authority ................................................................................................................................. 21
Requirements .......................................................................................................................... 21
Demonstrating Compliance ..................................................................................................... 21
Related Considerations ........................................................................................................... 22
Chapter 4: Required and Additional Health Services .............................................................. 24
Authority ................................................................................................................................. 24
Requirements .......................................................................................................................... 24
Demonstrating Compliance ..................................................................................................... 24
Related Considerations ........................................................................................................... 26
Chapter 5: Clinical Staffing ..................................................................................................... 28
Authority ................................................................................................................................. 28
Requirements .......................................................................................................................... 28
Health Center Program Compliance Manual
3
Demonstrating Compliance ..................................................................................................... 28
Related Considerations ........................................................................................................... 30
Chapter 6: Accessible Locations and Hours of Operation ....................................................... 32
Authority ................................................................................................................................. 32
Requirements .......................................................................................................................... 32
Demonstrating Compliance ..................................................................................................... 32
Related Considerations ........................................................................................................... 33
Chapter 7: Coverage for Medical Emergencies During and After Hours .................................. 34
Authority ................................................................................................................................. 34
Requirements .......................................................................................................................... 34
Demonstrating Compliance ..................................................................................................... 34
Related Considerations ........................................................................................................... 35
Chapter 8: Continuity of Care and Hospital Admitting ........................................................... 36
Authority ................................................................................................................................. 36
Requirements .......................................................................................................................... 36
Demonstrating Compliance ..................................................................................................... 36
Related Considerations ........................................................................................................... 37
Chapter 9: Sliding Fee Discount Program ............................................................................... 38
Authority ................................................................................................................................. 38
Requirements .......................................................................................................................... 38
Demonstrating Compliance ..................................................................................................... 38
Related Considerations ........................................................................................................... 41
Chapter 10: Quality Improvement/Assurance ....................................................................... 43
Authority ................................................................................................................................. 43
Requirements .......................................................................................................................... 43
Demonstrating Compliance ..................................................................................................... 43
Related Considerations ........................................................................................................... 45
Chapter 11: Key Management Staff ....................................................................................... 46
Authority ................................................................................................................................. 46
Requirements .......................................................................................................................... 46
Demonstrating Compliance ..................................................................................................... 46
Related Considerations ........................................................................................................... 47
Chapter 12: Contracts and Subawards ................................................................................... 49
Health Center Program Compliance Manual
4
Authority ................................................................................................................................. 49
Requirements .......................................................................................................................... 49
Contracts: Procurement and Monitoring ............................................................................ 49
Subawards: Monitoring and Management .......................................................................... 51
Demonstrating Compliance ..................................................................................................... 52
Contracts: Procurement and Monitoring ............................................................................ 52
Subawards: Monitoring and Management .......................................................................... 53
Related Considerations ........................................................................................................... 54
Chapter 13: Conflict of Interest .............................................................................................. 56
Authority ................................................................................................................................. 56
Requirements .......................................................................................................................... 56
Demonstrating Compliance ..................................................................................................... 56
Related Considerations ........................................................................................................... 58
Chapter 14: Collaborative Relationships ................................................................................ 59
Authority ................................................................................................................................. 59
Requirements .......................................................................................................................... 59
Demonstrating Compliance ..................................................................................................... 59
Related Considerations ........................................................................................................... 60
Chapter 15: Financial Management and Accounting Systems ................................................ 61
Authority ................................................................................................................................. 61
Requirements .......................................................................................................................... 61
Demonstrating Compliance ..................................................................................................... 62
Related Considerations ........................................................................................................... 63
Chapter 16: Billing and Collections ........................................................................................ 65
Authority ................................................................................................................................. 65
Requirements .......................................................................................................................... 65
Demonstrating Compliance ..................................................................................................... 65
Related Considerations ........................................................................................................... 67
Chapter 17: Budget ................................................................................................................ 69
Authority ................................................................................................................................. 69
Requirements .......................................................................................................................... 69
Demonstrating Compliance ..................................................................................................... 69
Related Considerations ........................................................................................................... 70
Health Center Program Compliance Manual
5
Chapter 18: Program Monitoring and Data Reporting Systems .............................................. 71
Authority ................................................................................................................................. 71
Requirements .......................................................................................................................... 71
Demonstrating Compliance ..................................................................................................... 71
Related Considerations ........................................................................................................... 72
Chapter 19: Board Authority ................................................................................................. 73
Authority ................................................................................................................................. 73
Requirements .......................................................................................................................... 73
Demonstrating Compliance ..................................................................................................... 75
Related Considerations ........................................................................................................... 77
Chapter 20: Board Composition ............................................................................................. 78
Authority ................................................................................................................................. 78
Requirements
,
......................................................................................................................... 78
Demonstrating Compliance ..................................................................................................... 79
Related Considerations ........................................................................................................... 82
Chapter 21: Federal Tort Claims Act (FTCA) Deeming Requirements ...................................... 84
Authority ................................................................................................................................. 84
Requirements .......................................................................................................................... 84
Demonstrating Compliance ..................................................................................................... 85
Credentialing and Privileging / Quality Improvement and Quality Assurance ..................... 85
Risk Management ............................................................................................................... 85
Claims Management ........................................................................................................... 86
Related Considerations ........................................................................................................... 87
Appendix A: Health Center Program Non-Regulatory Policy Issuances That Remain in Effect 88
Glossary ................................................................................................................................ 89
Health Center Program Compliance Manual
6
Introduction
Applicability
This Health Center Program Compliance Manual (“Compliance Manual”) applies to all health
centers that apply for
1
or receive Federal award funds under the Health Center Program
authorized by section 330 of the Public Health Service (PHS) Act (42 U.S.C. 254b) (“section
330”), as amended (including sections 330(e), (g), (h), and (i)), as well as subrecipient
organizations
2
and Health Center Program look-alikes. Look-alikes do not receive Federal
funding under section 330 of the PHS Act; however, to receive look-alike designation and
associated Federal benefits, look-alikes must meet the Health Center Program requirements.
3
For the purposes of this document, the term “health center” refers to entities that apply for or
receive a Federal award under section 330 of the PHS Act (including section 330 (e), (g), (h) and
(i)), section 330 subrecipients, and organizations designated as look-alikes.
This Compliance Manual does not apply to activities conducted outside of a health center’s
Health Resources and Services Administration (HRSA)-approved scope of project.
4
Purpose
The purpose of the Compliance Manual is to provide a consolidated resource to assist health
centers in understanding and demonstrating compliance with Health Center Program
requirements. The Compliance Manual also addresses HRSA’s approach to determining
eligibility for and exercising oversight over the Health Center Program and details the
requirements for obtaining deemed PHS employee status under section 224 (g)-(n) and (q) of
the PHS Act.
5
The Compliance Manual identifies requirements found in the Health Center Program’s
authorizing legislation and implementing regulations, as well as certain applicable grants
regulations.
6
These requirements form the foundation of the Health Center Program and
support the core mission of this innovative and successful model of primary care. The
Compliance Manual does not provide guidance on requirements in areas beyond Health Center
1
Notices of Funding Opportunity (NOFOs) may include specified timelines for new awardees to demonstrate
compliance with the requirements specified in this Manual following receipt of the Federal Health Center Program
award.
2
42 U.S.C. 1395x(aa)(4)(A)(ii) and 42 U.S.C. 1396d(l)(2)(B)(ii).
3
Sections 1861(aa)(4)(B) and 1905(l)(2)(B) of the Social Security Act (42 U.S.C. 1395x(aa)(4)(B) and 42 U.S.C.
1396d(l)(2)(B)(iii)).
4
See Scope of Project website for more information on scope of project.
5
Health Center FTCA Medical Malpractice Program procedures and information, as set forth in the FTCA Health
Center Policy Manual, are not superseded by this Manual. See Appendix A for additional policy issuances which
remain in effect.
6
Section 330 of the PHS Act (42 U.S.C. §254b), as amended, 42 CFR Part 51c and 42 CFR Part 56 for Community
and Migrant Health Centers, respectively, and 45 CFR Part 75.
Health Center Program Compliance Manual
7
Program requirements or outside HRSA’s oversight authority. In addition, the Compliance
Manual is not intended to address best or promising practices or performance improvement
strategies that may support effective operations or organizational excellence.
Health Center Program non-regulatory policy issuances that remain in effect after release of the
Compliance Manual are listed in Appendix A. With the exception of these policies, the
Compliance Manual supersedes other previous Health Center Program non-regulatory policy
issuances (Policy Information Notices (PINs), Program Assistance Letters (PALs), Regional Office
Memoranda, Regional Program Guidance memoranda, and other non-regulatory materials)
related to Health Center Program compliance or eligibility requirements. In case of any conflict
between a provision of the Compliance Manual and other HRSA-disseminated non-regulatory
materials related to compliance and/or eligibility requirements, the provisions of the
Compliance Manual control. Previously published issuances that are superseded by this Manual
include, but are not limited to:
• PIN 1994-07: Migrant Voucher Program Guidance
• PINs 1997-27 and 1998-24: Affiliation Agreements of Community & Migrant Health
Centers and Amendment to PIN 1997-27 Regarding Affiliation Agreements of
Community and Migrant Health Centers
• PINs 2001-16 and 2002-22: Credentialing and Privileging of Health Center Practitioners
and Clarification of BPHC Credentialing & Privileging Policy Outlined in PIN 2001-16
• PAL 2006-01: Dual Status-Health Centers that are both FQHC Look-Alikes and Section
330 Grantees
• PIN 2010-01: Confirming Public Agency Status under the Health Center Program and
FQHC Look-Alike Program
• PIN 2013-01: Health Center Program Budgeting and Accounting Requirements
• PIN 2014-01: Health Center Program Governance
• PIN 2014-02: Sliding Fee Discount and Related Billing and Collections Program
Requirements
• PAL 2014-08: Health Center Program Requirements Oversight
7
7
PAL 2014-08 superseded PAL 2010-01, “Enhancements to Support Health Center Program Requirements
Monitoring,” which was issued April 8, 2010.
• PAL 2014-11: Applicability of PAL 2014-08: Health Center Program Requirements
Oversight to Look-Alikes
The Compliance Manual serves as the foundation for HRSA’s eligibility and compliance-related
determinations and for HRSA’s review processes for the Health Center Program. HRSA will
update or amend the Compliance Manual as needed to provide further policy clarification with
respect to demonstrating compliance with Health Center Program requirements.
Structure of the Health Center Program Compliance Manual
Chapters in the Compliance Manual are generally organized as follows:
Health Center Program Compliance Manual
8
• Authority: Lists the applicable statutory and regulatory citations.
8
8
These citations include requirements under the Uniform Administrative Requirements for all HHS awards (45 CFR
Part 75) which are applicable to organizations receiving Federal funding under the Health Center Program (45
C.F.R. 75.101).
• Requirements: States the statutory and regulatory requirements.
• Demonstrating Compliance: Describes how health centers would demonstrate to HRSA
their compliance with the Requirements by fulfilling all elements in this section.
Note: Health centers that fail to demonstrate compliance as described in this
Manual will receive a condition of award/designation. In responding to such
conditions, health centers could demonstrate their compliance to HRSA either by
submitting documentation as described in the Demonstrating Compliance sections
of the Manual or by the health center proposing an alternative means of
demonstrating compliance with the specified Requirements, which would include
submitting an explanation and documentation that explicitly demonstrate
compliance. All responses to conditions are subject to review and approval by HRSA
(see Chapter 2: Health Center Program Oversight).
• Related Considerations: Describes areas where health centers have discretion with
respect to decision-making or that may be useful for health centers to consider when
implementing a requirement. When specific examples are provided, they are not
intended to be an all-inclusive list. All related considerations are offered with the
understanding that health center decision-making and implementation are consistent
with all applicable statutory, regulatory, and policy requirements.
Additional Health Center Responsibilities
In addition to the requirements included in this Compliance Manual, organizations receiving
Health Center Program Federal awards, including subrecipients, are also subject to other
applicable award-related statutory, regulatory, and policy requirements (see 45 CFR Part 75 and
the U.S. Department of Health and Human Services (HHS) Grants Policy Statement (GPS),
9
Notices of Funding Opportunity (NOFOs),
10
and Notices of Award (NoAs)).
9
Further grants policy information may be found in the HHS Grants Policy Statement and the HRSA SF-424
Application Guide. See HRSA Grants website for more information.
10
Individual NOFOs may contain specific additional terms and conditions of award beyond those identified in this
Manual.
As such, the
Compliance Manual does not constitute an exhaustive listing of all requirements that may be
included in terms and conditions stated in NOFOs, NoAs, and other applicable laws, regulations,
and policies.
Health Center Program Compliance Manual
9
Health centers (including look-alikes) are subject to the distinct statutory, regulatory, and policy
requirements of other Federal programs that they may be eligible for and participate in as a
result of the Health Center Program award or designation, such as:
• Federally Qualified Health Center (FQHC) status, payment rates, and requirements
under Titles XVIII (Medicare) and XIX (Medicaid) of the Social Security Act;
11
11
42 U.S.C. 1396a(a)(15) and 42 U.S.C. 1396(a)(bb); and 42 U.S.C. 1395l(a)(1)(Z) and 42 U.S.C. 1395m(o).
• The 340B Drug Pricing Program;
12
12
Section 340B of the PHS Act, as amended (42 U.S.C. 256b).
• The National Health Service Corps (NHSC) Program; and
• The Health Center FTCA Medical Malpractice Program (with the exception of the
deeming requirements included in the Compliance Manual).
13
13
Section 224(g)-(n) and (q) of the PHS Act (42 U.S.C. 233(g)-(n), and (q)).
Each health center is responsible for maintaining its operations, including developing and
implementing its own operating procedures, in compliance with all Health Center Program
requirements and all other applicable Federal, state, and local laws and regulations.
14
14
42 CFR 51c.304(d)(3)(v).
This
includes but is not limited to those protecting public welfare, the environment and prohibiting
discrimination; state facility and licensing laws; state scope of practice laws; Centers for
Medicare and Medicaid Services (CMS) Conditions for Coverage for FQHCs;
15
and State
Medicaid requirements.
15
42 CFR Part 491.
In fulfilling all of these oversight and compliance responsibilities, a
health center may wish to consult its private legal counsel. Health centers may also direct
questions to the designated points of contact for these programs.
Health Center Program Compliance Manual
10
Chapter 1: Health Center Program Eligibility
Organizations applying for funding or designation under the Health Center Program must
demonstrate that they are eligible organizations under the Health Center Program statute and
regulations. Specifically, organizations applying for funding as health centers or designation as
look-alikes must be private non-profit entities or public agencies.
1
1
Section 330(e)(1)(A) of the PHS Act, 42 CFR 51c.103, and 42 CFR 56.103.
Organizations applying for
look-alike designation are also subject to certain additional statutory eligibility requirements.
2
2
Sections 1861(aa)(4)(b) and 1905(l)(2)(B) of the Social Security Act.
In addition to the eligibility requirements described in this Chapter, organizations may be
required to comply with certain additional eligibility requirements described in Notices of
Funding Opportunity (NOFOs) or look-alike application instructions in order to receive a
Health Center Program award or look-alike designation.
Non-Profit Organizations
An organization would demonstrate to HRSA that it is a private non-profit entity by
submitting one of the following types of documentation:
• A copy of a currently valid IRS tax exemption certificate;
• A statement from a state taxing body, state attorney general, or other appropriate state
official certifying that the applicant organization has a non-profit status and that none of
the net earnings accrue to any private shareholders or individuals;
• A certified copy of the organization’s official certificate of incorporation or similar
document (for example, articles of incorporation) showing the state or tribal seal that
clearly establishes nonprofit status; or
• Any of the above documents for a state or local office of a national parent organization
and a statement signed by the parent organization that the applicant organization is a
local non-profit affiliate.
Public Agency Organizations
An organization would demonstrate to HRSA that it is a public agency by submitting one of
the following types of documentation:
• A current dated letter affirming the organization’s status as a State, territorial, county,
city, or municipal government; a health department organized at the State, territory,
county, city or municipal level; or a subdivision or municipality of a United States (U.S.)
Health Center Program Compliance Manual
11
affiliated sovereign State formally associated with the U.S. (for example, Republic of
Palau);
• A copy of the law that created the organization and that grants one or more sovereign
powers (for example, the power to tax, eminent domain, police power) to the
organization (for example, a public hospital district);
• A ruling from the State Attorney General affirming the legal status of an entity as either
a political subdivision or instrumentality of the State (for example, a public university);
or
• A “letter ruling” which provides a positive written determination by the Internal
Revenue Service of the organization’s exempt status as an instrumentality under
Internal Revenue Code section 115.
Tribal or Urban Indian Organizations
Native American tribal organizations, including those defined under the Indian Self-
Determination Act
3
or the Indian Health Care Improvement Act
4
,
5
are eligible to apply for
Health Center Program funding or designation.
3
The text of the Indian Self-Determination Act may be found at 25 U.S.C. Ch 46.
4
The text of the Indian Health Care Improvement Act may be found at 25 U.S.C. Ch 18.
5
Per section 330(k)(3)(H), tribal or urban Indian organizations are exempt from Health Center Program governance
requirements.
Such organizations would demonstrate their
eligibility to HRSA by providing applicable documentation as described in either the Non-Profit
Organizations or Public Agency Organizations sections above.
Additional Eligibility Requirements for Look-Alike Designation
In addition to demonstrating that it is either a private non-profit entity or a public agency, an
organization applying for look-alike designation must demonstrate to HRSA that it satisfies all of
the following requirements:
1. It is currently delivering primary health care services to patients within the proposed
service area.
2. It is not owned, controlled, or operated by another entity. Specifically, the organization
applying for look-alike designation:
a. Owns and controls the organization’s assets and liabilities (for example, the
organization does not have a sole corporate member, is not a subsidiary of
another organization), and as such will be able to ensure that the benefits that
accrue through look-alike designation as a Federally Qualified Health Center
(FQHC) are distributed to the Health Center Program project (for example, FQHC
Health Center Program Compliance Manual
12
payment rates, 340B Drug Pricing); and
b. Operates the Health Center Program project. At a minimum, the look-alike
applicant organization demonstrates that it maintains a Project Director/Chief
Executive Officer (CEO) who will carry out independent, day-to-day oversight of
health center activities solely on behalf of the governing board of the applicant
organization.
3. It is not currently receiving funding as a Health Center Program Federal award
recipient.
6
6
Health centers may not maintain or obtain look-alike designation if they are already receiving a Federal award
under section 330 of the Public Health Service Act. Under Section 1905(l)(2)(B) of the Social Security Act: “The term
“Federally-qualified health center” means an entity which … (i) is receiving a grant under section 254b of this
title…or (ii)(I) is receiving funding from such a grant under a contract with the recipient of such a grant, and (II)
meets the requirements to receive a grant under section 254b of this title…or (iii) based on the recommendation
of the Health Resources and Services Administration within the Public Health Service, is determined by the
Secretary to meet the requirements for receiving such a grant, including requirements of the Secretary that an
entity may not be owned, controlled, or operated by another entity.”
Organizations will not be awarded Federal funding or look-alike designation that would
result in “dual status,” whereby the organization becomes both a Federal awardee under
section 330 and a look-alike designee. For example, an organization that is currently a
Health Center Program awardee would no longer be awarded new look-alike designation
status through the Initial Designation process, nor would an organization that is
currently a Health Center Program look-alike be awarded Health Center Program
funding unless, at the same time, it proposes to include all of its health center sites
within the scope of the Health Center Program award.
Health centers that currently have dual status as of the date of release of the
Compliance manual will be permitted to maintain such status as long as subsequent
Service Area Competition and Renewal of Designation applications are approved by
HRSA.
Health Center Program Compliance Manual
13
Chapter 2: Health Center Program Oversight
Note: This chapter contains revisions based on the Bipartisan Budget Act of 2018. View the
revisions.
Health centers must comply with all Health Center Program requirements and other applicable
Federal statutes, regulations, and the terms and conditions of their award or look-alike
designation.
1
1
Section 330 of the Public Health Service (PHS) Act (42 U.S.C. 254b), as amended, 42 CFR Part 51c and 42 CFR Part
56 for Community and Migrant Health Centers, respectively, and 45 CFR Part 75.
In keeping with the Health Resources and Services Administration (HRSA)/Bureau
of Primary Health Care’s (BPHC) oversight responsibilities, HRSA/BPHC monitors and supports
health centers in complying with these requirements.
The purpose of this chapter is to:
• Set forth HRSA/BPHC’s oversight process for the purposes of monitoring compliance
with Health Center Program requirements and assists health centers in maintaining
compliance with these requirements.
• Describe when and how HRSA pursues remedies for non-compliance, including taking
enforcement action(s) in cases where health centers fail to comply with Health Center
Program requirements and other applicable Federal statutes, regulations, and the terms
and conditions of the award or look-alike designation.
• Clarify when and how compliance with program requirements and past performance
2
is
considered in award or designation decisions.
2
42 CFR 51c.305 and 45 CFR 75.205(c)(3).
HRSA/BPHC’s Progressive Action process is implemented through its Electronic Handbooks
(EHB) system. The EHB system facilitates the tracking of compliance with program conditions
placed on a health center’s award or designation.
3
3
Throughout this document, requirements or conditions of award are “requirements of Federal designation” for
organizations designated by HRSA as look-alikes (see section 1861(aa)(4)(B) and section 1905(l)(2)(B) of the Social
Security Act), which must also meet all of the requirements of the Health Center Program.
This system also communicates these
conditions through Notices of Award (NoAs) or Notices of Look-Alike Designation (NLDs),
documents the health center’s response to these conditions, and documents removal of these
conditions when appropriate.
4
4
In the EHB, a health center’s response to a condition of award/designation is referred to as a “submission”. The
removal or lifting of a condition occurs once a submission that adequately addresses the required corrective action
has been reviewed, approved by HRSA, and marked as “met” within the EHB.
Program Oversight
United States (U.S.) Department of Health and Human Services (HHS) grants regulations,
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (Uniform Regulations)
5
require HRSA to “manage and administer the Federal award in a
5
2 CFR Part 200.
Health Center Program Compliance Manual
14
manner so as to ensure that Federal funding is expended and associated programs are
implemented in full accordance with U.S. statutory and public policy requirements, including,
but not limited to, those protecting public welfare, the environment, and prohibiting
discrimination.”
6
6
45 CFR 75.300.
Consistent with applicable laws and HRSA’s program oversight responsibilities, health centers
are assessed for compliance with these requirements and are provided an opportunity to
remedy areas of non-compliance whenever reasonably possible. Immediate enforcement
action may be taken against health centers in limited circumstances that are further addressed
below.
HRSA may impose specific award conditions
7
if an applicant or recipient/designee:
7
45 CFR 75.207(a).
• Demonstrates undue risk in such areas
8
as:
8
45 CFR 75.205(c).
◦ Financial stability;
◦ Quality of management systems and ability to meet required management
standards;
◦ History of performance, specifically the applicant’s record in managing previous
Federal awards (timeliness of compliance with applicable reporting requirements
and conformance to the terms and conditions of previous Federal awards);
◦ Findings from reports and audits; and
◦ Ability to effectively implement statutory, regulatory, or other requirements
imposed on non-Federal entities.
• Has a history of failure to comply with the general or specific terms and conditions of a
Federal award/designation;
• Fails to meet expected performance goals [as prescribed in the terms or conditions of
the Federal award or designation]; or
• Is not otherwise responsible.
9
9
45 CFR 75.207(a).
Specific award conditions may include, but are not limited to, the following:
• Requiring payments as reimbursements rather than advance payments;
10
10
This is also known as “Restricted Drawdown.” When a Federal award recipient is placed on restricted drawdown,
all drawdowns of Federal funds from the Payment Management System (PMS) must have approval of HRSA’s
Office of Federal Assistance Management, Division of Grants Management Operations, and must comply with all
applicable requirements before funds are drawn.
• Withholding authority to proceed to the next phase of the project until receipt of
evidence of acceptable performance within a given period of performance;
• Requiring additional, more detailed financial reports;
• Requiring additional project monitoring;
Health Center Program Compliance Manual
15
• Requiring the non-Federal entity to obtain technical or management assistance; or
• Establishing additional prior approvals.
11
11
45 CFR 75.207(b).
If it is determined that noncompliance cannot be remedied by imposing such additional
conditions, one or more of the following actions may be taken as appropriate in the
circumstances:
• Temporarily withhold cash payments pending further action;
• Disallow all or part of the cost of the activity or action not in compliance;
• Wholly or partly suspend award activities or terminate the Federal award;
12
12
Termination means the ending of a Federal award, in whole or in part at any time prior to the planned end of
period of performance [project period] (45 CFR 75.2). Health Center Program look-alikes will receive formal
notification of de-designation as they do not receive a Federal Health Center Program award.
• Initiate suspension or debarment proceedings;
13
13
Suspension of award activities means an action by HRSA requiring the recipient to cease all activities on the
award pending corrective action by the recipient, including restricting the ability to draw down any funds
associated with the Federal award (45 CFR 75.375) and is a separate action from suspension under HHS
regulations (2 CFR Part 376) (45 CFR 75.2).
• Withhold further Federal awards for the project or program; or
• Take other remedies that may be legally available.
14
14
45 CFR 75.371.
Progressive Action Overview
In circumstances where HRSA has determined that a health center has failed to demonstrate
compliance with one or more of the Health Center Program requirements, a condition(s) will be
placed on the award/designation, which will follow the Progressive Action policy and process.
Such determinations are typically based upon findings from the review of the Service Area
Competition (SAC)/Renewal of Designation (RD) application, a site visit, other compliance-
related activities, or through other means.
15
15
HRSA may also assess compliance with requirements through audit data, Uniform Data System (UDS) or similar
performance reports, Medicare/Medicaid reports, external accreditation, or other Federal, state, or local findings
or reports as applicable, and may conduct onsite verification of compliance at any point within a
project/designation period or prior to any final Health Center Program award/designation decisions.
Program conditions placed on the health center’s
award or look-alike designation describe the:
• Nature of the finding and the requirement it relates to;
• Reason why the condition(s) is being imposed;
• Nature of the action(s) needed to remove the condition;
• Time allowed for completing the additional requirement (satisfying the condition(s)
through submission of appropriate documentation or specific actions taken), if
applicable; and
Health Center Program Compliance Manual
16
• Method for requesting reconsideration of the condition.
16
16
Imposed conditions will include the method for submitting responses to conditions, which would include an
opportunity to inform HRSA of any request to reconsider the placement of the condition.
HRSA is committed to providing a reasonable period of time for these organizations to take
corrective actions necessary to demonstrate compliance. Progressive Action is designed to
provide a time-phased approach for resolution of compliance issues with program
requirements. This Progressive Action process is not intended to address or be used for the
oversight and enforcement of all Federal requirements that may be applicable to the award or
designation, particularly those with implications for patient safety (see Immediate Enforcement
Actions below).
Should a health center fail to adequately address conditions through Progressive Action, HRSA
may utilize available remedies, including terminating all or part of the Federal
award/designation status before the health center’s current project end date.
17
17
45 CFR 75.371 and 45 CFR 75.372.
Such action
may be accompanied by a competition to identify another organization to carry out a service
delivery program consistent with Federal requirements.
18
18
Health Center Program look-alikes that have had their designation period terminated by HRSA under such
circumstances or for which HRSA has not renewed a look-alike designation may reapply for look-alike designation
through the initial designation application process at any time.
Progressive Action Process
In circumstances where HRSA has determined that a health center has failed to demonstrate
compliance with one or more Health Center Program requirements, relevant conditions are
placed on the health center’s award/designation and communicated through Notices of Award
(NoAs) or Notices of Look-Alike Designation (NLDs). In responding to such conditions, health
centers could demonstrate their compliance to HRSA either by submitting documentation as
described in the Demonstrating Compliance sections of the Manual, or by the health center
proposing an alternative means of demonstrating compliance with the specified requirements,
which would include submitting an explanation and documentation that explicitly
demonstrates compliance. All responses to conditions are subject to review and approval by
HRSA.
The Progressive Action process provides a uniform structure and a time-phased approach for
notifying health centers of the failure to demonstrate compliance and for receiving health
center responses to an identified condition(s) as supported within HRSA’s EHB. Through this
process, health centers are able to efficiently and effectively respond to conditions, and HRSA is
able to promptly review these responses and proceed to next steps, including removal of
conditions, as warranted. In addition, the EHB supports the Progressive Action process by
clearly noting condition response deadlines in the health center’s EHB task list and providing
periodic reminders to health centers during the condition response timeframe.
Health Center Program Compliance Manual
17
The Progressive Action process includes four distinct condition phases (detailed below),
structured to provide specified timeframes for health centers to provide responses that
demonstrate compliance, either in the manner prescribed by this Manual or via alternative
means. After initial notification of the compliance issue, a health center will be notified via a
NoA/NLD at each Progressive Action phase as to the acceptability of the response and whether
further action is needed. If the health center fails to respond by the specified deadline or HRSA
determines that the health center’s response does not demonstrate compliance, the health
center will be notified and the next Progressive Action phase will be activated.
• Phase One: An initial NoA/NLD is issued with a condition detailing the specific area(s)
where compliance with a requirement has not been demonstrated. Phase One provides
ninety (90) days for the health center to submit appropriate documentation that
demonstrates compliance or, where applicable, that the health center has developed an
adequate action plan (see Implementation Phase below) for how its organization will
demonstrate compliance with the requirement.
19
19
Conditions afford a 120-day Implementation Phase when a HRSA-approved corrective action plan would require
additional time for the health center to implement related programmatic and organizational changes.
• Phase Two: Phase Two provides an additional sixty (60) days for the health center to
submit appropriate documentation that demonstrates compliance or that the health
center has developed an adequate action plan for how its organization will demonstrate
compliance with the requirement (See Implementation Phase below).
• Phase Three: Phase Three provides an additional thirty (30) days for the health center to
submit appropriate documentation that demonstrates compliance or that the health
center has developed an adequate action plan for how its organization will demonstrate
compliance with the requirement (See Implementation Phase below).
• Implementation Phase (where applicable): Implementation Phase provides one hundred
twenty (120) days for the health center to implement the HRSA-approved action plan
and submit appropriate documentation that demonstrates compliance with the
program requirement.
20
20
The implementation phase follows HRSA’s approval of an adequate action plan submitted in Phase One, Two, or
Three.
HRSA recognizes that health centers may need to make programmatic and organizational
changes in response to a condition. Therefore, the Progressive Action process is designed to
provide health centers with a reasonable amount of time to take appropriate action in response
to a condition and for prompt HRSA review and decision-making. For example, in Phase One, a
health center is given 90 days to either demonstrate compliance with the identified program
requirement or develop and submit an action plan detailing the steps the health center will
implement in order to demonstrate compliance with the requirement. If this plan is approved, a
NoA/NLD will be issued with an “Implementation Phase” condition notifying the health center
that HRSA has approved the action plan and that within 120 days it must submit documentation
that compliance with the requirement has been demonstrated in accordance with the HRSA-
approved plan.
Health Center Program Compliance Manual
18
Conditions in Phase Two (60-day) and Phase Three (30-day)
21
state that if the health center
does not adequately address the condition within the allotted timeframe (the last opportunity
being Phase Three), the organization will be determined to have failed to comply with the
terms and conditions of the Health Center Program award or designation.
21
The BPHC website includes a public Health Center Profile for each individual health center that displays data on
the status of a health center’s compliance with Health Center Program requirements based on the presence of any
active
60- and/or 30-day Progressive Action conditions. See Health Center Program UDS Data Overview website
to
view individual health center data.
As a result, the
health center’s current project end date may be shortened through the termination of all or
part of the Federal award or designation status.
Immediate Enforcement Actions
HRSA may determine that certain findings related to a health center, as a consequence of their
nature and/or urgency, cannot be remedied by imposing specific award conditions per the
Progressive Action process described above. In such cases, based on the circumstances, HRSA
may take one or more of the following immediate remedies:
• Temporarily withhold cash payments (from the Federal award) pending further action;
• Disallow all or part of the cost of the activity or action not in compliance;
• Wholly or partly suspend award activities or terminate the Federal award;
• Initiate suspension or debarment proceedings;
• Withhold further Federal awards for the project or program; or
• Take other remedies that may be legally available.
22
22
45 CFR 75.371.
Situations that cannot be remedied through use of the Progressive Action process and that may
require HRSA to apply such immediate enforcement actions include:
• Findings that a health center, in responding to the terms or conditions of
award/designation, misrepresented the actions it took to correct areas of non-
compliance. For example, a site visit reveals that HRSA lifted a Progressive Action
condition based on false or misrepresented information submitted by the health center.
• Documented public health or welfare concerns. Examples may include threats to health
center patient safety, violations of state scope of practice regulations or guidelines,
inappropriate or illegal prescribing practices, lack of appropriate infection control
procedures, and occupational or environmental hazards.
• Failure of the health center organization to demonstrate operational capacity to
continue or maintain its health center service delivery program. For example, a health
center has ceased operations and is no longer providing primary care services or is
Health Center Program Compliance Manual
19
providing only minimal services.
• A determination that continued funding would not be in the best interest of the Federal
Government. For example, a health center organization’s inclusion as an excluded entity
on the U.S. Department of Health and Human Services Office of Inspector General’s List
of Excluded Individuals/Entities (LEIE) and/or inclusion on the System for Award
Management (SAM) Excluded Parties List System (EPLS),
23
or as an organization that is
not qualified per the Federal Awardee Performance and Integrity Information System
(FAPIIS).
24
23
The Government Services Administration administers the SAM EPLS. The SAM is available at SAM.gov.
24
The FAPIIS is available at FAPIIS.
Program Compliance and Application Review and Selection
Project/designation period length is based on an assessment of a health center’s compliance
with program requirements. Therefore, an existing health center that fails to demonstrate
compliance with all Health Center Program requirements may only be awarded Federal Service
Area Competition (SAC) funding for a one-year project/designation period.
25
25
Section 330(e)(1)(B) of the PHS Act (42 U.S.C. 254b(e)(1)(B)). In addition, a health center that fails to
demonstrate compliance with all Health Center Program requirements, including those in Section 330(k)(3) of the
PHS Act, must submit, within 120 days of grant funding, an implementation plan for compliance for HRSA approval.
Additional information related to this implementation plan will be included in the applicable Notices of Funding
Opportunity and Look-Alike Designation/Renewal of Designation application instructions.
Further, if a current Health Center Program Federal award recipient has been awarded two
consecutive one-year project periods as a result of noncompliance with any Health Center
Program requirements, and review of a subsequent SAC application would result in a third
consecutive one-year project period due to noncompliance with Program requirements, HRSA
will not fund a third consecutive one-year project period.
26
26
Section 330(e)(4) of the PHS Act states that “Not more than two grants may be made under subparagraph (B) of
paragraph (1) for the same entity.” While such organizations may apply for future Health Center Program funding
under 45 CFR 75.205(c)(3), HRSA may consider factors, including an applicant’s history of performance if it has
been a prior recipient of Federal awards
or designation when making competitive awards. These factors include,
but are not limited to, unsuccessful Progressive Action condition resolution and current compliance with Health
Center Program requirements and regulations.
In such circumstances, HRSA may
announce a new competition for the service area, in order to identify an organization that can
carry out a service delivery program consistent with Health Center Program requirements.
Consistent with the approach regarding Federal award recipients, HRSA will not renew a Health
Center Program look-alike organization’s designation if the organization has received two
consecutive one-year designation periods and the review of the subsequent RD application
would result in a third consecutive one-year designation period. Look-alikes whose designation
Health Center Program Compliance Manual
20
period has not been renewed may reapply for look-alike designation through the initial
designation application process at any time.
27
27
See Health Center Program Look-Alikes website for more information on the Health Center Program look-alike
application process.
In addition, project/designation period length determinations may be impacted by a
comprehensive evaluation of the risks to the Health Center Program posed by each applicant if
it were to receive an award/designation for a new project or designation period, or for
supplemental funding. The specific criteria for determining project period length are further
detailed in the applicable Service Area Competition (SAC) Notices of Funding Opportunity
(NOFOs) and Look-Alike Renewal of Designation (RD), or supplemental funding application
instructions. A health center’s ability to demonstrate compliance with program requirements is
critical to ensuring continued Federal award support and may, in certain cases, directly impact
award decisions for supplemental funding, as outlined in the specific NOFO.
Health Center Program Compliance Manual
21
Chapter 3: Needs Assessment
Note: This chapter contains revisions based on the Bipartisan Budget Act of 2018. View the
revisions.
Authority
Section 330(k)(2) and Section 330(k)(3)(J) of the PHS Act; and 42 CFR 51c.104(b)(2-3), 42 CFR
51c.303(k), 42 CFR 56.104(b)(2), 42 CFR 56.104(b)(4), and 42 CFR 56.303(k)
Requirements
• The health center must define and annually review the boundaries of the catchment
area to be served [service area], including the identification of the medically
underserved population or populations within the catchment area in order to ensure
that the:
◦ Size of this area is such that the services to be provided through the center
(including any satellite service sites) are available and accessible to the residents
of the area promptly and as appropriate;
◦ Boundaries of such area conform, to the extent practicable, to relevant
boundaries of political subdivisions, school districts, and areas served by Federal
and State health and social service programs; and
◦ Boundaries of such area eliminate, to the extent possible, barriers resulting from
the area's physical characteristics, its residential patterns, its economic and
social groupings, and available transportation.
• The health center must assess the unmet need for health services in the catchment or
proposed catchment area of the center based on the population served, or proposed to
be served, utilizing, but not limited to, the following factors:
◦ Available health resources in relation to the size of the area and its population,
including appropriate ratios of primary care physicians in general or family
practice, internal medicine, pediatrics, or obstetrics and gynecology to its
population;
◦ Health indices for the population of the area, such as infant mortality rate;
◦ Economic factors affecting the population's access to health services, such as
percentage of the population with incomes below the poverty level; and
◦ Demographic factors affecting the population's need and demand for health
services, such as percentage of the population age 65 and over.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
Health Center Program Compliance Manual
22
a. The health center identifies and annually reviews its service area
1
based on where
current or proposed patient populations reside as documented by the ZIP codes
reported on the health center’s Form 5B: Service Sites.
1
Also referred to as “catchment area” in the Health Center Program implementing regulation in 42 CFR 51c.102.
In addition, these service area
ZIP codes are consistent with patient origin data reported by ZIP code in its annual
Uniform Data System (UDS) report (for example, the ZIP codes reported on the health
center’s Form 5B: Service Sites would include the ZIP codes in which at least 75 percent
of current health center patients reside, as identified in the most recent UDS report).
b. The health center completes or updates a needs assessment of the current or proposed
population at least once every three years,
2
for the purposes of informing and improving
the delivery of health center services.
2
Compliance may be demonstrated based on the information included in a Service Area Competition (SAC) or a
Renewal of Designation (RD) application. Note that in the case of a Notice of Funding Opportunity for a New
Access Point or Expanded Services grant, HRSA may specify application-specific requirements for demonstrating an
applicant has consulted with the appropriate agencies and providers consistent with Section 330(k)(2)(D) of the
Public Health Service Act. Such application-specific requirements may require a completed or updated needs
assessment more recent than that which was provided in an applicant’s SAC or RD application.
The needs assessment utilizes the most recently
available data
3
for the service area and, if applicable, special populations and addresses
the following:
3
In cases where data are not available for the specific service area or special population, health centers may use
extrapolation techniques to make valid estimates using data available for related areas and population groups.
Extrapolation is the process of using data that describes one population to estimate data for a comparable
population, based on one or more common differentiating demographic characteristics. Where data are not
directly available and extrapolation is not feasible, health centers should use the best available data describing the
area or population to be served.
◦ Factors associated with access to care and health care utilization (for example,
geography, transportation, occupation, transience, unemployment, income level,
educational attainment);
◦ The most significant causes of morbidity and mortality (for example, diabetes,
cardiovascular disease, cancer, low birth weight, behavioral health) as well as
any associated health disparities; and
◦ Any other unique health care needs or characteristics that impact health status
or access to, or utilization of, primary care (for example, social factors, the
physical environment, cultural/ethnic factors, language needs, housing status).
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making, or may be useful for health centers to consider when implementing these
requirements:
• The health center determines the most appropriate methodologies, tools, and formats
for conducting needs assessments (for example, quantitative or qualitative data sources,
Health Center Program Compliance Manual
23
focus groups, patient surveys).
• The health center determines how to complete or update its needs assessments (for
example, fulfilling the criteria of a Notice of Funding Opportunity (NOFO), participating
in community-wide needs assessments, responding to changes within the community).
• The health center may choose to include additional indicators relevant to its service
area and population within its needs assessments.
• The health center may choose to include an additional focus on a specific underserved
subset of the service area population (for example, children; persons living with
HIV/AIDS; elderly persons), as part of its overall assessment of need in its service area.
Health Center Program Compliance Manual
24
Chapter 4: Required and Additional Health Services
Note: This chapter contains revisions based on the Bipartisan Budget Act of 2018. View the
revisions.
Authority
Section 330(a)-(b), Section 330(h)(2), and Section 330(k)(3)(K) of the PHS Act; and 42 CFR
51c.102(h) and (j), 42 CFR 56.102(l) and (o), and 42 CFR 51c.303(l)
Requirements
• The health center must provide the required primary health services listed in section
330(b)(1) of the PHS Act.
• A health center that receives a Health Center Program award or look-alike designation
under section 330(h) of the PHS Act to serve individuals experiencing homelessness
must, in addition to these required primary health services, provide substance use
disorder services.
• The health center may provide additional (supplemental) health services that are
appropriate to meet the health needs of the population served by the health center,
subject to review and approval by HRSA.
• All required and applicable additional health services must be provided through one or
more service delivery method(s): directly, or through written contracts and/or
cooperative arrangements (which may include formal referrals).
• A health center which serves a population that includes a substantial proportion of
individuals of limited English-speaking ability must:
◦ Develop a plan and make arrangements for interpretation and translation that
are responsive to the needs of such populations for providing health center
services to the extent practicable in the language and cultural context most
appropriate to such individuals; and
◦ Provide guidance to appropriate staff members with respect to cultural
sensitivities and bridging linguistic and cultural differences.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
Health Center Program Compliance Manual
25
a.
The health center provides access to all services included in its HRSA-approved scope of
project
1
(Form 5A: Services Provided) through one or more service delivery methods,
2
as described below:
3
1
In accordance with 45 CFR 75.308 (Uniform_Administrative_Requirements: Revision of Budget and Program
Plans), health centers must request prior approval from HRSA for a change in the scope or the objective of the
project or program (even if there is no associated budget revision requiring prior written approval). This prior
approval requirement applies, among other things, to the addition or deletion of a service within the scope of
project. These changes require prior approval from HRSA and must be submitted by the health center as a formal
change in scope request. See
Scope of Project website for further details on scope of project, including
descriptions of the services listed on Form 5A: Services Provided available at: Form 5A: Service Descriptors.
2
The Health Center Program statute states that health centers may provide services “either through the staff and
supporting resources of the center or through contracts or cooperative arrangements.” 42 U.S.C. 254b(a)(1) The
Health Center Program Compliance Manual utilizes the terms “Formal Written Contract/Agreement” and “Formal
Written Referral Arrangement” to refer to such “contracts or cooperative arrangements.” For more information on
documenting service delivery methods within the HRSA-approved scope of project on Form 5A: Services Provided,
see: Form 5A Column Descriptors
.
Other Health Center Program requirements apply when providing services through contractual agreements and
formal referral arrangements. Such requirements are addressed in other chapters of the Manual where applicable.
3
See Chapter 9: Sliding Fee Discount Program for more information on sliding fee discount program requirements
and how they apply to the various service delivery methods.
◦ Direct: If a required or additional service is provided directly by health center
employees
4
or volunteers, this service is accurately recorded in Column I on
Form 5A: Services Provided, reflecting that the health center pays for and bills
for direct care.
4
For purposes of the HRSA-approved scope of project (Form 5A: Services Provided), HRSA/BPHC utilizes Internal
Revenue Service (IRS) definitions to differentiate contractors and employees. Typically, an employee receives a
salary on a regular basis and a W-2 from the health center with applicable taxes and benefit contributions
withheld.
◦ Formal Written Contract/Agreement:
5
5
See Chapter 12: Contracts and Subawards for more information on program requirements around contracting.
If a required or additional service is
provided on behalf of the health center via a formal contract/agreement
between the health center and a third party (including a subrecipient),
6
this
service is accurately recorded in Column II on Form 5A: Services Provided,
reflecting that the health center pays for the care provided by the third party via
the agreement.
6
For purposes of the HRSA-approved scope of project (Form 5A: Services Provided), services provided via
“contract/formal agreement” are those provided by practitioners who are not employed by or volunteers of the
health center (for example, an individual provider with whom the health center has a contract; a group practice
with which the health center has a contract; a locum tenens staffing agency with which the health center
contracts; a subrecipient organization). Typically, a health center will issue an Internal Revenue Service (IRS) Form
1099 to report payments to an individual contractor. See the FTCA Health Center Policy Manual
for information
about eligibility for Federal Tort Claims Act (FTCA) coverage for covered activities by covered individuals, which
extends liability protections for eligible “covered individuals,” including governing board members and officers,
employees, and qualified individual contractors).
In addition, the health center ensures that such contractual
agreements for services include:
Health Center Program Compliance Manual
26
• How the service will be documented in the patient’s health center record;
and
• How the health center will pay for the service.
◦ Formal Written Referral Arrangement: If access to a required or additional
service is provided and billed for by a third party with which the health center
has a formal referral arrangement, this service is accurately recorded in Column
III on Form 5A: Services Provided, reflecting that the health center is responsible
for the act of referral for health center patients and any follow-up care for these
patients provided by the health center subsequent to the referral.
7
7
For purposes of the HRSA-approved scope of project (Form 5A: Services Provided), access to services provided via
“formal referral arrangements” are those referred by the health center but provided and billed for by a third party.
Although the service itself is not included within the HRSA-approved scope of project, the act of referral and any
follow-up care provided by the health center subsequent to the referral are considered to be part of the health
center’s HRSA-approved scope of project. For more information on documenting service delivery methods within
the HRSA-approved scope of project on Form 5A: Services Provided, see: Form 5A Column Descriptors
.
In addition,
the health center ensures that such formal referral arrangements for services, at
a minimum, address:
• The manner by which referrals will be made and managed; and
• The process for tracking and referring patients back to the health center
for appropriate follow-up care (for example, exchange of patient record
information, receipt of lab results).
b. Health center patients with limited English proficiency are provided with interpretation
and translation (for example, through bilingual providers, on-site interpreters, high
quality video or telephone remote interpreting services) that enable them to have
reasonable access to health center services.
c. The health center makes arrangements and/or provides resources (for example,
training) that enable its staff to deliver services in a manner that is culturally sensitive
and bridges linguistic and cultural differences.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center governing board determines which, if any, additional health services
to offer in order to meet the health needs of the population served by the health center
(subject to review and approval by HRSA).
Health Center Program Compliance Manual
27
• The health center determines how to make services accessible in a culturally and
linguistically appropriate manner,
8
based on its patient population.
8
See the National Standards for Culturally and Linguistically Appropriate Services (CLAS) published by the U.S.
Department of Health and Human Services at Think Cultural Health. For additional information and guidance.
Additional cultural/linguistic competency and health literacy tools, resources and definitions are available online at
HRSA: Culture, Language, and Health Literacy and HRSA: Health Literacy.
• The health center determines the level or intensity of required and additional services,
as well as the method for delivering these services, based on factors such as the needs
of the population served, demonstrated unmet need in the community, provider
staffing, and collaborative arrangements.
• The health center may, through policies and operating procedures, prioritize the
availability of additional services within the approved scope of project to individuals
who utilize the health center as their primary care medical home.
Health Center Program Compliance Manual
28
Chapter 5: Clinical Staffing
Authority
Sections 330(a)(1), (b)(1)-(2) of the PHS Act; and 42 CFR 51c.303(a), 42 CFR 51c.303(p), 42 CFR
56.303(a), and 42 CFR 56.303(p)
Requirements
• The health center must provide the required primary and approved additional health
services
1
of the center through staff and supporting resources of the center or through
contracts or cooperative arrangements.
1
These terms are defined in section 330(b) of the Public Health Service (PHS) Act. For more information, see Scope
of Project website.
• The health center must provide the health services of the center so that such services
are available and accessible promptly, as appropriate, and in a manner that will assure
continuity of service to the residents of the center's catchment area.
• The health center must utilize staff that are qualified by training and experience to carry
out the activities of the center.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
a. The health center ensures that it has clinical staff
2
and/or has contracts or formal
referral arrangements in place with other providers or provider organizations to carry
out all required and additional services included in the HRSA-approved scope of
project.
3
2
Clinical staff includes licensed independent practitioners (for example, Physician, Dentist, Physician Assistant,
Nurse Practitioner), other licensed or certified practitioners (for example, Registered Nurse, Licensed Practical
Nurse, Registered Dietitian, Certified Medical Assistant), and other clinical staff providing services on behalf of the
health center (for example, Medical Assistants or Community Health Workers in states, territories or jurisdictions
that do not require licensure or certification).
3
Health centers seeking coverage for themselves and their providers under the Health Center FTCA Medical
Malpractice Program should review the statutory and policy requirements for coverage, as discussed in the FTCA
Health Center Policy Manual.
b. The health center has considered the size, demographics, and health needs (for
example, large number of children served, high prevalence of diabetes) of its patient
Health Center Program Compliance Manual
29
population in determining the number and mix of clinical staff necessary to ensure
reasonable patient access to health center services.
c. The health center has operating procedures for the initial and recurring review (for
example, every two years) of credentials for all clinical staff members (licensed
independent practitioners (LIPs), other licensed or certified practitioners (OLCPs), and
other clinical staff providing services on behalf of the health center) who are health
center employees, individual contractors, or volunteers. These credentialing procedures
would ensure verification of the following, as applicable:
◦ Current licensure, registration, or certification using a primary source;
◦ Education and training for initial credentialing, using:
• Primary sources for LIPs
4
4
In states in which the licensing agency, specialty board or registry conducts primary source verification of
education and training, the health center would not be required to duplicate primary source verification when
completing the credentialing process.
• Primary or other sources (as determined by the health center) for OLCPs
and any other clinical staff;
◦ Completion of a query through the National Practitioner Data Bank (NPDB);
5
5
The NPDB is an electronic information repository authorized by Congress. It contains information on medical
malpractice payments and certain adverse actions related to health care practitioners, entities, providers, and
suppliers. For more information, see National Practitioner Data Bank
.
◦ Clinical staff member’s identity for initial credentialing using a government-
issued picture identification;
◦ Drug Enforcement Administration (DEA) registration; and
◦ Current documentation of basic life support training.
d. The health center has operating procedures for the initial granting and renewal (for
example, every two years) of privileges for clinical staff members (LIPs, OLCPs, and other
clinical staff providing services on behalf of the health center) who are health center
employees, individual contractors, or volunteers. These privileging procedures would
address the following:
◦ Verification of fitness for duty, immunization, and communicable disease status;
6
6
The CDC has published recommendations and many states have their own recommendations or standards for
provider immunization and communicable disease screening. For more information about CDC recommendations,
see CDC: Recommended Vaccines for Healthcare Workers
.
◦ For initial privileging, verification of current clinical competence via training,
education, and, as available, reference reviews;
◦ For renewal of privileges, verification of current clinical competence via peer
review or other comparable methods (for example, supervisory performance
reviews); and
◦ Process for denying, modifying or removing privileges based on assessments of
clinical competence and/or fitness for duty.
Health Center Program Compliance Manual
30
e. The health center maintains files or records for its clinical staff (for example, employees,
individual contractors, and volunteers) that contain documentation of licensure,
credentialing verification, and applicable privileges, consistent with operating
procedures.
f. If the health center has contracts with provider organizations (for example, group
practices, locum tenens staffing agencies, training programs) or formal, written referral
agreements with other provider organizations that provide services within its scope of
project, the health center ensures
7
that such providers are:
7
This may be done, for example, through provisions in contracts and cooperative arrangements with such
organizations or health center review of the organizations’ credentialing and privileging processes.
◦ Licensed, certified, or registered as verified through a credentialing process, in
accordance with applicable Federal, state, and local laws; and
◦ Competent and fit to perform the contracted or referred services, as assessed
through a privileging process.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center determines its staffing composition (for example, use of nurse
practitioners, physician assistants, certified nurse midwives) and its staffing levels (for
example, full- and/or part-time staff).
• The health center determines who has approval authority for credentialing and
privileging of its clinical staff.
• The health center determines how credentialing will be implemented (for example, a
health center may contract with a credentials verification organization (CVO) to perform
credentialing activities or it may have its own staff conduct credentialing), including
whether to have separate credentialing processes for LIPs versus other provider types.
• The health center determines how it assesses clinical competence and fitness for duty of
its staff (for example, regarding clinical competence, a health center may utilize peer
review conducted by its own providers or may contract with another organization to
conduct peer review).
• The health center determines (consistent with its established privileging criteria)
whether to deny, modify, or remove privileges of its staff; whether to use an appeals
process in conjunction with such determinations; and whether to implement corrective
action plans in conjunction with the denial, modification, or removal of privileges.
Health Center Program Compliance Manual
31
• The health center determines (consistent with its contracts/cooperative arrangements)
whether to disallow individual providers or organizations from providing health services
on the health center’s behalf.
Health Center Program Compliance Manual
32
Chapter 6: Accessible Locations and Hours of Operation
Authority
Section 330(k)(3)(A) of the PHS Act; and 42 CFR 51c.303(a) and 42 CFR 56.303(a)
Requirements
• The required primary health services of the health center must be available and
accessible in the catchment [service] area of the center promptly, as appropriate, and in
a manner which ensures continuity of service to the residents of the center’s catchment
area.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
a. The health center’s service site(s) are accessible to the patient population relative to
where this population lives or works (for example, in areas immediately accessible to
public housing for health centers targeting public housing residents, or in shelters for
health centers targeting individuals experiencing homelessness, or at migrant camps for
health centers targeting agricultural workers). Specifically, the health center considers
the following factors to ensure the accessibility of its sites:
◦ Access barriers (for example, barriers resulting from the area's physical
characteristics, residential patterns, or economic and social groupings); and
◦ Distance and time taken for patients to travel to or between service sites in
order to access the health center’s full range of in-scope services.
b. The health center’s total number and scheduled hours of operation across its service
sites are responsive to patient needs by facilitating the ability to schedule appointments
and access the health center’s full range of services within the HRSA-approved scope of
project
1
(for example, a health center service site might offer extended evening hours 3
days a week based on input or feedback from patients who cannot miss work for
appointments during normal business hours).
1
Services provided by a health center are defined at the awardee/designee level, not by individual site. Thus, not
all services must be available at every health center service site; rather, health center patients must have
reasonable access to the full complement of services offered by the center as a whole, either directly or through
formal written established arrangements. See
Scope of Project website for further details on scope of project,
including services and column descriptors listed on Form 5A: Services Provided.
Health Center Program Compliance Manual
33
c. The health center accurately records the sites in its HRSA-approved scope of project
2
on
its Form 5B: Service Sites in HRSA’s Electronic Handbooks (EHB).
2
In accordance with 45 CFR 75.308(c)(1)(i), health centers must request prior approval from HRSA for a “Change in
the scope or the objective of the project or program (even if there is no associated budget revision requiring prior
written approval).” This prior approval requirement applies to the addition, deletion, or replacement of a service
site. These changes require prior approval from HRSA and must be submitted by the health center as a formal
change in scope request. See Scope of Project website
for further details on scope of project.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center determines which methods to use for obtaining patient input on the
accessibility of its service sites and hours of operation (for example, annual survey, focus
groups, input from patient board members).
• The health center determines how to measure and consider distance and travel time to
or between the health center’s sites when assessing its impact on patient access to the
health center’s services.
• The health center determines how to support patient access to the various service sites
included within its HRSA-approved scope of project (for example, whether to provide
patient transportation between service sites or use mobile service sites). The health
center also determines which service(s) to provide at each site within its HRSA-approved
scope of project.
Health Center Program Compliance Manual
34
Chapter 7: Coverage for Medical Emergencies During and After Hours
Authority
Section 330(b)(1)(A)(IV) and Section 330(k)(3)(A) of the PHS Act; and 42 CFR 51c.102(h)(4), 42
CFR 56.102(l)(4), 42 CFR 51c.303(a), and 42 CFR 56.303(a)
Requirements
• To assure continuity of the required primary health services of the center, the health
center must have:
◦ Provisions for promptly responding to patient medical emergencies during the
health center’s regularly scheduled hours; and
◦ Clearly defined arrangements for promptly responding to patient medical
emergencies after the health center’s regularly scheduled hours.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
a. The health center has at least one staff member trained and certified in basic life
support present at each HRSA-approved service site (as documented on Form 5B:
Service Sites) to ensure the health center has the clinical capacity to respond to patient
medical emergencies
1
during the health center’s regularly scheduled hours of
operation.
2
1
Medical emergencies may, for example, include those related to physical, oral, behavioral, or other emergent
health needs.
2
See Chapter 6: Accessible Location and Hours of Operation for more information on hours of operation.
b. The health center has and follows its applicable operating procedures when responding
to patient medical emergencies during regularly scheduled hours of operation.
c. The health center has after-hours coverage operating procedures, which may include
formal arrangements
3
with non-health center providers/entities, that ensure:
3
See Chapter 12: Contracts and Subawards for more information on oversight over such arrangements.
◦ Coverage is provided via telephone or face-to-face by an individual with the
qualification and training necessary to exercise professional judgment in
assessing a health center patient's need for emergency medical care;
◦ Coverage includes the ability to refer patients either to a licensed independent
practitioner for further consultation or to locations such as emergency rooms or
urgent care facilities for further assessment or immediate care as needed; and
Health Center Program Compliance Manual
35
◦ Patients, including those with limited English proficiency,
4
are informed of and
are able to access after-hours coverage, based on receiving after-hours coverage
information and instructions in the language(s), literacy levels, and formats
appropriate to the health center’s patient population needs.
4
Under Section 602 of Title VI of the Civil Rights Act and the Department of Health and Human Services
implementing regulations (45 C.F.R. Section 80.3(b)(2)), recipients of Federal financial assistance, including health
centers, must take reasonable steps to ensure meaningful access to their programs, services, and activities by
eligible Limited English Proficient (LEP) persons. See
Office of Civil Rights: Guidance to Federal Financial Assistance
Recipients Regarding Title VI and the Prohibition Against National Origin Discrimination Affecting Limited English
Proficient Persons -Summary for further guidance on translating vital documents for LEP persons.
d. The health center has documentation of after-hours calls and any necessary follow-up
resulting from such calls for the purposes of continuity of care.
5
5
See Chapter 8: Continuity of Care and Hospital Admitting for more information on continuity of care.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center determines the means by which after-hours coverage is provided to
health center patients. Examples include: telephone coverage by health center
providers, primary care services after hours to address urgent medical conditions on an
extended or 24-hour basis at certain service sites, after-hours phone coverage
arrangements with other community providers,
6
or “nurse call” lines.
6
Health centers that are deemed under the Federal Tort Claims Act (FTCA) should ensure that they are familiar
with the applicable restrictions on FTCA coverage for services provided to non-health center patients. Review the
FTCA Health Center Policy Manual
for further information.
• The health center determines how to make patients aware of the availability of, and
procedures for, accessing professional coverage after hours. Examples include after-
hours instructions that are: integrated into an automated message on the health
center’s main phone line explaining how to access after-hours coverage, posted on the
door of all health center service sites, provided as part of the initial patient registration
process, posted on the health center’s website, and/or provided as patient brochures or
cards.
Health Center Program Compliance Manual
36
Chapter 8: Continuity of Care and Hospital Admitting
Authority
Section 330(k)(3)(A) and 330(k)(3)(L) of the PHS Act; and 42 CFR 51.c.303(a) and 42 CFR
56.303(a)
Requirements
• The health center must provide the required primary health services of the center
promptly and in a manner which will assure continuity of service to patients within the
center's catchment area (service area).
• The health center must develop an ongoing referral relationship with one or more
hospitals.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
a. The health center has documentation of:
◦ Health center provider
1
hospital admitting privileges (for example, provider
employment contracts or other files indicate the provider(s) has admitting
privileges at one or more hospitals);
1
In addition to physicians, various provider types may have admitting privileges, if applicable, based on scope of
practice in their State (for example, Nurse Practitioners, Certified Nurse Midwives).
and/or
◦ Formal arrangements between the health center and one or more hospitals or
entities (for example, hospitalists, obstetrics hospitalist practices) for the
purposes of hospital admission of health center patients.
b. The health center has internal operating procedures and, if applicable, related
provisions in its formal arrangements with non-health center provider(s) or entity(ies)
that address the following areas for patients who are hospitalized as inpatients or who
visit a hospital’s emergency department (ED):
2
2
Health center patients may be admitted to a hospital setting through a variety of means (for example, a visit to
the Emergency Department (ED) may lead to an inpatient hospital admission, or a health center patient may be
directly admitted to a unit of the hospital, such as labor and delivery).
◦ Receipt and recording of medical information related to the hospital or ED visit,
such as discharge follow-up instructions and laboratory, radiology, or other
results; and
◦ Follow-up actions by health center staff, when appropriate.
Health Center Program Compliance Manual
37
c. The health center follows its operating procedures and formal arrangements as
documented by:
◦ Receipt and recording of medical information related to the hospital or ED visit,
such as discharge follow-up instructions and laboratory, radiology, or other
results; and
◦ Evidence of follow-up actions taken by health center staff based on the
information received, when appropriate.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center determines the number and type(s) of hospitals with which its
providers will have admitting arrangements based on the services included in the HRSA-
approved scope of project (Form 5A: Services Provided), the patient population served,
and the service area.
• The health center determines whether the most appropriate means for hospital
admitting is to use its own providers, have arrangements with non-health center
providers, or both.
• The health center determines the most appropriate formats and mechanisms for
discharge planning and tracking (for example, use of community-wide shared electronic
health record, patient hospitalization tracking log).
Health Center Program Compliance Manual
38
Chapter 9: Sliding Fee Discount Program
Note: This chapter contains revisions based on a technical correction. View the revisions.
Authority
Section 330(k)(3)(G) of the PHS Act; 42 CFR 51c.303(f), 42 CFR 51c.303(g), 42 CFR 51c.303(u), 42
CFR 56.303(f), 42 CFR 56.303(g), and 42 CFR 56.303(u)
Requirements
• The health center must operate in a manner such that no patient shall be denied service
due to an individual’s inability to pay.
1
1
See Chapter 16: Billing and Collections for more information on waiving or reducing charges due to a patient’s
inability to pay.
• The health center must prepare a schedule of fees or payments for the provision of its
services consistent with locally prevailing rates or charges and designed to cover its
reasonable costs of operation and must prepare a corresponding schedule of discounts
[sliding fee discount schedule (SFDS)] to be applied to the payment of such fees or
payments, by which discounts are adjusted on the basis of the patient's ability to pay.
• The health center must establish systems for [sliding fee] eligibility determination.
• The health center’s schedule of discounts must provide for:
◦ A full discount to individuals and families with annual incomes at or below those
set forth in the most recent Federal Poverty Guidelines (FPG) [100 percent of the
FPG], except that nominal charges for service may be collected from such
individuals and families where imposition of such fees is consistent with project
goals; and
◦ No discount to individuals and families with annual incomes greater than twice
those set forth in such Guidelines [200 percent of the FPG].
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
Health Center Program Compliance Manual
39
a. The health center has a sliding fee discount program
2
that applies to all required and
additional health services
3
within the HRSA-approved scope of project for which there
are distinct fees.
4
2
A health center’s sliding fee discount program consists of the schedule of discounts that is applied to the fee
schedule and adjusts fees based on the patient’s ability to pay. A health center’s sliding fee discount program also
includes the related policies and procedures for determining sliding fee eligibility and applying sliding fee
discounts.
3
See Chapter 4: Required and Additional Health Services for more information on requirements for services within
the scope of the project.
4
A distinct fee is a fee for a specific service or set of services, which is typically billed for separately within the local
health care market.
b. The health center has board-approved policy(ies) for its sliding fee discount program
that apply uniformly to all patients and address the following areas:
◦ Definitions of income
5
and family;
5
Income is defined as earnings over a given period of time used to support an individual/household unit based on
a set of criteria of inclusions and exclusions. Income is distinguished from assets, as assets are a fixed economic
resource while income is comprised of earnings.
◦ Assessment of all patients for sliding fee discount eligibility based only on
income and family size, including methods for making such assessments;
◦ The manner in which the health center’s sliding fee discount schedule(s)
(SFDS(s)) will be structured in order to ensure that patient charges are adjusted
based on ability to pay; and
◦ Only applicable to health centers that choose to have a nominal charge for
patients at or below 100 percent of the FPG: The setting of a flat nominal
charge(s) at a level that would be nominal from the perspective of the patient
(for example, based on input from patient board members, patient surveys,
advisory committees, or a review of co-pay amount(s) associated with Medicare
and Medicaid for patients with comparable incomes) and would not reflect the
actual cost of the service being provided.
6
6
Nominal charges are not “minimum fees,” “minimum charges,” or “co-pays.”
c. For services provided directly by the health center (Form 5A: Services Provided, Column
I), the health center’s SFDS(s) is structured consistent with its policy and provides
discounts as follows:
◦ A full discount is provided for individuals and families with annual incomes at or
below 100 percent of the current FPG, unless a health center elects to have a
nominal charge, which would be less than the fee paid by a patient in the first
sliding fee discount pay class above 100 percent of the FPG.
◦ Partial discounts are provided for individuals and families with incomes above 100
percent of the current FPG and at or below 200 percent of the current FPG, and
Health Center Program Compliance Manual
40
those discounts adjust based on gradations in income levels and include at least
three discount pay classes.
7
7
For example, a SFDS with discount pay classes of 101 percent to 125 percent of the FPG, 126 percent to 150
percent of the FPG, 151 percent to 175 percent of the FPG, 176 percent to 200 percent of the FPG, and over 200
percent of the FPG would have four discount pay classes between 101 percent and 200 percent of the FPG.
◦ No discounts are provided to individuals and families with annual incomes above
200 percent of the current FPG.
8
8
See Chapter 16: Billing and Collections, if the health center has access to other grants or subsidies that support
patient care.
d. For health centers that choose to have more than one SFDS, these SFDSs would be
based on services (for example, having separate SFDSs for broad service types, such as
medical and dental, or distinct subcategories of service types, such as preventive dental
and additional dental services) and/or on service delivery methods (for example, having
separate SFDSs for services provided directly by the health center and for in-scope
services provided via formal written contract) and no other factors.
e. The health center’s SFDS(s) has incorporated the most recent FPG.
f. The health center has operating procedures for assessing/re-assessing all patients for
income and family size consistent with board-approved sliding fee discount program
policies.
g. The health center has records of assessing/re-assessing patient income and family size
except in situations where a patient has declined or refused to provide such
information.
h. The health center has mechanisms for informing patients of the availability of sliding fee
discounts (for example, distributing materials in language(s) and literacy levels
appropriate for the patient population, including information in the intake process,
publishing information on the health center’s website).
i. For in-scope services provided via contracts (Form 5A: Services Provided, Column II,
Formal Written Contract/Agreement), the health center ensures that fees for such
services are discounted as follows:
◦ A full discount is provided for individuals and families with annual incomes at or
below 100 percent of the current FPG, unless a health center elects to have a
nominal charge, which would be less than the fee paid by a patient in the first
sliding fee discount pay class above 100 percent of the FPG.
◦ Partial discounts are provided for individuals and families with incomes above 100
percent of the current FPG and at or below 200 percent of the current FPG, and
those discounts adjust based on gradations in income levels and include at least
three discount pay classes.
Health Center Program Compliance Manual
41
◦ No discounts are provided to individuals and families with annual incomes above
200 percent of the current FPG.
j. For services provided via formal referral arrangements (Form 5A: Services Provided,
Column III), the health center ensures that fees for such services are either discounted
as described in element “c.” above or discounted in a manner such that:
◦ Individuals and families with incomes above 100 percent of the current FPG and
at or below 200 percent of the FPG receive an equal or greater discount for
these services than if the health center’s SFDS were applied to the referral
provider’s fee schedule; and
◦ Individuals and families at or below 100 percent of the FPG receive a full
discount or a nominal charge for these services.
k. Health center patients who are eligible for sliding fee discounts and have third-party
coverage are charged no more for any out-of-pocket costs than they would have paid
under the applicable SFDS discount pay class.
9
Such discounts are subject to potential
legal and contractual restrictions.
10
9
For example, an insured patient receives a health center service for which the health center has established a fee
of $80, per its fee schedule. Based on the patient’s insurance plan, the co-pay would be $60 for this service. The
health center also has determined, through an assessment of income and family size, that the patient’s income is
150 percent of the FPG and thus qualifies for the health center’s SFDS. Under the SFDS, a patient with an income at
150 percent of the FPG would receive a 50 percent discount of the $80 fee, resulting in a charge of $40 for this
service. Rather than the $60 co-pay, the health center would charge the patient no more than $40 out-of-pocket,
consistent with its SFDS, as long as this is not precluded or prohibited by the applicable insurance contract.
10
Such limitations may be specified by applicable Federal or state programs, or private payor contracts.
l. The health center evaluates, at least once every three years, its sliding fee discount
program. At a minimum, the health center:
◦ Collects utilization data that allows it to assess the rate at which patients within
each of its discount pay classes, as well as those at or below 100 percent of the
FPG, are accessing health center services;
◦ Utilizes this and, if applicable, other data (for example, results of patient
satisfaction surveys or focus groups, surveys of patients at various income levels)
to evaluate the effectiveness of its sliding fee discount program in reducing
financial barriers to care; and
◦ Identifies and implements changes as needed.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
Health Center Program Compliance Manual
42
• The health center determines whether to establish a nominal charge for individuals and
families at or below 100 percent of the FPG.
• The health center determines how to document income and family size in health center
records.
• The health center determines whether to take into consideration the characteristics of its
patient population when developing definitions for income and family size and
procedures for assessing patient eligibility for SFDS. For example, the health center may
consider the availability of income documentation for individuals experiencing
homelessness, build in cost of living considerations when calculating income, permit self-
declaration of income and family size.
• The health center determines how and with what frequency to re-assess patient eligibility
for the SFDS.
• The health center determines whether to identify individuals who refuse to provide
information on income and family size as ineligible for SFDS.
• The health center determines how to make patients aware of sliding fee discounts (for
example, signage, registration process).
• The health center determines:
◦ Whether to establish more than three discount pay classes above 100 percent of
the FPG and up to and including 200 percent of the FPG;
◦ What income range to establish for each discount pay class above 100 percent of
the FPG and up to and including 200 percent of the FPG;
◦ What method to use for discounting fees above 100 percent of the FPG and up to
and including 200 percent of the FPG (for example, percentage of fee, fixed/flat
fee per discount pay class); and
◦ Whether to establish multiple SFDSs (for example, separate SFDSs for medical
services and dental services) including, if appropriate, different nominal charges
for each SFDS.
Health Center Program Compliance Manual
43
Chapter 10: Quality Improvement/Assurance
Authority
Section 330(k)(3)(C) of the PHS Act; and 42 CFR 51c.110, 42 CFR 51c.303(b), 42 CFR 51c.303(c),
42 CFR 51c.304(d)(3)(iv-vi), 42 CFR 56.111, 42 CFR 56.303(b), 42 CFR 56.303(c), and 42 CFR
56.304(d)(4)(v-vii)
Requirements
• The health center must have an ongoing quality improvement/assurance (QI/QA)
system that includes clinical services and [clinical] management and maintains the
confidentiality of patient records.
• The health center’s ongoing QI/QA system must provide for all of the following:
◦ Organizational arrangements, including a focus of responsibility, to support the
quality assurance program and the provision of high quality patient care; and
◦ Periodic assessment of the appropriateness of the utilization of services and the
quality of services provided or proposed to be provided to individuals served by
the center. Such assessments must:
• Be conducted by physicians or by other licensed health professionals
under the supervision of physicians;
• Be based on the systematic collection and evaluation of patient records;
• Assess patient satisfaction, achievement of project objectives, and
include a process for hearing and resolving patient grievances; and
• Identify and document the necessity for change in the provision of
services by the center and result in the institution of such change, where
indicated.
• The health center must maintain the confidentiality of patient records, including all
information as to personal facts and circumstances obtained by the health center staff
about recipients of services. Specifically, the health center must not divulge such
information without the individual's consent except as may be required by law or as
may be necessary to provide service to the individual or to provide for medical audits by
the Secretary of HHS or his/her designee with appropriate safeguards for confidentiality
of patient records.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
Health Center Program Compliance Manual
44
a. The health center has a board-approved policy(ies) that establishes a QI/QA program.
1
1
See Chapter 19: Board Authority for more information on the health center governing board’s role in approving
policies.
This QI/QA program addresses the following:
◦ The quality and utilization of health center services;
◦ Patient satisfaction and patient grievance processes; and
◦ Patient safety, including adverse events.
b. The health center designates an individual(s) to oversee the QI/QA program established
by board-approved policy(ies). This individual’s responsibilities would include, but would
not be limited to, ensuring the implementation of QI/QA operating procedures and
related assessments, monitoring QI/QA outcomes, and updating QI/QA operating
procedures.
c. The health center has operating procedures or processes that address all of the
following:
◦ Adhering to current evidence-based clinical guidelines, standards of care, and
standards of practice in the provision of health center services, as applicable;
◦ Identifying, analyzing, and addressing patient safety and adverse events and
implementing follow-up actions, as necessary;
◦ Assessing patient satisfaction;
◦ Hearing and resolving patient grievances;
◦ Completing periodic QI/QA assessments on at least a quarterly basis to inform
the modification of the provision of health center services, as appropriate; and
◦ Producing and sharing reports on QI/QA to support decision-making and
oversight by key management staff and by the governing board regarding the
provision of health center services.
d. The health center’s physicians or other licensed health care professionals conduct
QI/QA assessments on at least a quarterly basis, using data systematically collected
from patient records, to ensure:
◦ Provider adherence to current evidence-based clinical guidelines, standards of
care, and standards of practice in the provision of health center services, as
applicable; and
◦ The identification of any patient safety and adverse events and the
implementation of related follow-up actions, as necessary.
e. The health center maintains a retrievable health record (for example, the health center
has implemented a certified Electronic Health Record (EHR))
2
for each patient, the
2
CMS and the Office of the National Coordinator for Health Information Technology (ONC) have established
standards and other criteria for structured data that Electronic Health Records (EHRs) must use in order to qualify
for CMS incentive programs. For health centers that participate in these CMS Incentive Programs, further
information is available at CMS Promoting Interoperability Programs
.
Health Center Program Compliance Manual
45
format and content of which is consistent with both Federal and state laws and
requirements.
f. The health center has implemented systems (for example, certified EHRs and
corresponding standard operating procedures) for protecting the confidentiality of
patient information and safeguarding this information against loss, destruction, or
unauthorized use, consistent with Federal and state requirements.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center determines whether the position designated with responsibility for
the QI/QA program (for example, Clinical Director, QI Director) is full-time, part-time, or
combined with another position, and whether it is filled by an employee or via contract.
• The health center determines whether the position designated with responsibility for
the QI/QA program is filled by a physician, other licensed health care professional (for
example, registered nurse, nurse practitioner), or other qualified individual (for
example, an individual with a Master of Public Health or a Master of Healthcare
Administration).
• The health center determines which QI/QA methodology(ies) to use.
• The health center determines the type of patient health record system that it will use.
• The health center determines the format, content, and focus of QI/QA reports.
Health Center Program Compliance Manual
46
Chapter 11: Key Management Staff
Note: This chapter contains revisions based on the Bipartisan Budget Act of 2018. View the
revisions.
Authority
Section 330(k)(3)(H)(ii), and 330(k)(3)(I)(i) of the PHS Act; 42 CFR 51c.104(b)(4), 42 CFR
51c.303(p), 42 CFR 56.104(b)(5), and 42 CFR 56.303(p); and 45 CFR 75.308(c)(1)(ii)(iii)
Requirements
• The health center must have position descriptions for key personnel [also referred to as
key management staff] that set forth training and experience qualifications necessary to
carry out the activities of the health center.
• The health center must maintain sufficient key personnel [also referred to as key
management staff] to carry out the activities of the health center.
• The health center must request prior approval from HRSA for a change in the key person
specified in the Health Center Program award or Health Center Program look-alike
designation.
• The health center must directly employ its Project Director/CEO.
1
1
While the position title of the key person who is specified in the award/designation may vary, for the purposes of
the Health Center Program, this Chapter will utilize the term “Project Director/CEO” when referring to this key
person. Under 45 CFR 75.2, the term “Principal Investigator/Program Director (PI/PD)” means the individual(s)
designated by the recipient to direct the project or program being supported by the
grant. The PI/PD is responsible
and accountable to officials of the recipient organization for the proper conduct of the project, program, or
activity. For the purposes of the Health Center Program, “Project Director/CEO” is synonymous with the term
“PI/PD.”
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
a. The health center has determined the makeup of and distribution of functions among its
key management staff
2
and the percentage of time dedicated to the Health Center
2
Examples of key management staff may include Project Director/CEO, Clinical Director/Chief Medical Officer,
Chief Financial Officer, Chief Operating Officer, Nursing/Health Services Director, or Chief Information Officer.
Health Center Program Compliance Manual
47
Program project for each position, as necessary to carry out the HRSA-approved scope
of project.
b. The health center has documented the training and experience qualifications, as well as
the duties or functions, for each key management staff position (for example, in position
descriptions).
c. The health center has implemented, as necessary, a process for filling vacant key
management staff positions (for example, vacancy announcements have been published
and reflect the identified qualifications).
d. The health center’s Project Director/CEO is directly employed by the health center,
3
reports to the health center’s governing board
4
and is responsible for overseeing other
key management staff in carrying out the day-to-day activities necessary to fulfill the
HRSA-approved scope of project.
3
Public agency health centers utilizing a co-applicant structure would demonstrate compliance with the statutory
requirement for direct employment of the Project Director/CEO by demonstrating that the public agency, as the
Health Center Program awardee/designee of record, directly employs the Project Director/CEO. Refer to related
requirements in Chapter 19: Board Authority
regarding public agencies with co-applicants.
4
Refer to related requirements in Chapter 19: Board Authority regarding the selection and dismissal of the Project
Director/CEO by the health center board as part of its oversight responsibilities for the Health Center Program
project.
e. If there has been a post-award change in the Project Director/CEO position,
5
the health
center requests and receives prior approval from HRSA.
5
Such changes include situations in which the current Project Director/CEO will be disengaged from involvement
in the Health Center Program project for any continuous period for more than 3 months or will reduce time
devoted to the project by 25 percent or more from the level that was approved at the time of award [see: 45 CFR
75.308(c)(1)(ii) and (iii)].
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center’s governing board determines when a less than full time Project
Director/CEO position is sufficient to oversee the day-to-day activities of the HRSA-
approved scope of project.
• The health center determines when and if it is appropriate and necessary to contract for
key management staff positions (other than the CEO, who may not be a contractor),
rather than directly employ such individuals.
Health Center Program Compliance Manual
48
• The health center determines key management staff position titles (for example,
utilizing the title “CEO” or “Project Director”) and how functions are distributed among
its key management staff positions (for example, determining in a smaller health center
whether it is appropriate to combine the CEO and CFO functions).
Health Center Program Compliance Manual
49
Chapter 12: Contracts and Subawards
Note: This chapter contains revisions based on the Bipartisan Budget Act of 2018. View the
revisions.
Authority
Section 330(k)(3)(I) and Section 330(q) of the PHS Act; 42 CFR 51c.113, 42 CFR 56.114, 42 CFR
51c.303(t), and 42 CFR 56.303(t); 45 CFR Part 75 Subpart D; and Section 1861(aa)(4)(A)(ii) and
Section 1905(l)(2)(B)(ii) of the Social Security Act
Requirements
Contracts: Procurement and Monitoring
1
1
All procurement standards included in 45 CFR Part 75 apply for procurement actions paid for in whole or in part
under the Federal award. These standards do not relieve the non-Federal entity of any contractual responsibilities
under its contracts. HRSA will not substitute its judgment for that of the non-Federal entity unless the matter is
primarily a Federal concern. Violations of law will be referred to the local, tribal, state, or Federal authority having
proper jurisdiction.
• The health center must determine
2
whether an individual agreement that will result in
disbursement of Federal funds will be carried out through a contract or a subaward and
structure the agreement accordingly.
3
2
Per 45 CFR 75.351(c): “In determining whether an agreement between a pass-through entity [Health Center
Program awardee] and another non-Federal entity casts the latter as a subrecipient or a contractor, the substance
of the relationship is more important than the form of the agreement. All of the characteristics listed above [see
45 CFR 75.351(a) and (b)] may not be present in all cases, and the pass-through entity [Health Center Program
awardee] must use judgment in classifying each agreement as a subaward or a procurement
contract.”
3
Specifically, the purpose of a subaward is to carry out a portion of the Federal award and creates a Federal
assistance relationship with the subrecipient, while the purpose of a contract is to obtain goods or services for the
health center‘s own use and creates a procurement relationship with the contractor.
• The health center must request and receive approval from HRSA to contract for
[substantive programmatic] work
4
under its Health Center Program award.
4
For the purposes of the Health Center Program, contracting for substantive programmatic work applies to
contracting with a single entity for the majority of health care providers. The acquisition of supplies, material,
equipment, or general support services is not considered programmatic work. Substantive programmatic work
may be further defined within HRSA Notices of Funding Opportunity (NOFOs) and applications.
• The health center must use its own documented procurement procedures which reflect
applicable State, local, and tribal laws and regulations, provided that for procurement
actions paid for in whole or in part under the Federal award, the procurements conform
with 45 CFR Part 75.
Health Center Program Compliance Manual
50
• The health center must perform a cost or price analysis in connection with every
procurement action paid for in whole or in part by the Federal award in excess of the
Simplified Acquisition Threshold.
5
5
Simplified acquisition threshold means the dollar amount below which a non-Federal entity may purchase
property or services using small purchase methods. Non-Federal entities adopt small purchase procedures in order
to expedite the purchase of items costing less than the simplified acquisition threshold. The simplified acquisition
threshold is set by the Federal Acquisition Regulation at 48 CFR subpart 2.1 and in accordance with 41 U.S.C. 1908.
The acquisition threshold is periodically adjusted for inflation.
• The health center must conduct all procurement transactions paid for in whole or in
part by the Federal award, in a manner that provides full and open competition
consistent with the standards of 45 CFR 75.328. Procurements by non-competitive
proposals
6
are allowable only when:
6
As defined by 45 CFR 75.329(f), procurement by “noncompetitive proposals” is procurement through solicitation
of a proposal from only one source.
◦ The item is available only from a single source;
◦ The public exigency or emergency for the requirement will not permit a delay
resulting from competitive solicitation;
◦ The non-competitive proposal is specifically authorized by HRSA (or, in the case
of a subrecipient, the Federal award recipient) in response to a written request
from the Federal award recipient or subrecipient; or
◦ Competition is determined to be inadequate after soliciting a number of sources.
• Health center contracts with other providers for the provision of health services within
the HRSA-approved scope of project must include a schedule of rates and method of
payment for such services.
• The health center must oversee contractors to ensure their performance is in
accordance with the terms, conditions, and specifications of their contracts and to
assure compliance with applicable Federal requirements.
7
7
The health center is responsible, in accordance with good administrative practice and sound business judgment,
for the settlement of all contractual and administrative issues arising out of procurements paid for in whole or in
part under the Federal award. These issues include, but are not limited to, source evaluation, protests, disputes,
and claims.
• The health center must retain financial records, supporting documents, statistical
records, and all other records pertinent to the Health Center Program award carried out
under contracts for a period of three years from the date of the submission of the final
expenditures report to HHS.
Health Center Program Compliance Manual
51
Subawards: Monitoring and Management
• The Health Center Program awardee must determine whether an individual agreement
that will result in disbursement of Federal funds will be carried out through a contract or
a subaward and structure the agreement accordingly.
8
8
Specifically, the purpose of a subaward is to carry out a portion of the Federal award and create a Federal
assistance relationship with the subrecipient, while the purpose of a contract is to obtain goods or services for the
health center’s own use and creates a procurement relationship with the contractor.
With respect to subawards:
◦ The health center awardee must make documented, case-by-case
determinations whether the agreement it makes for the disbursement of Federal
program funds casts the party receiving the funds in the role of a subrecipient,
consistent with the characteristics outlined in 45 CFR 75.351;
9
9
Per 45 CFR 75.351(c): “In determining whether an agreement between a pass-through entity [Health Center
Program awardee] and another non-Federal entity casts the latter as a subrecipient or a contractor, the substance
of the relationship is more important than the form of the agreement. All of the characteristics listed above [see
45 CFR 75.351(a) and (b)] may not be present in all cases, and the pass-through entity [Health Center Program
awardee] must use judgment in classifying each agreement as a subaward or a procurement contract.”
◦ The health center awardee must identify subawards as such to the subrecipient,
and provide all applicable information to the subrecipient as described in 45 CFR
75.352(a)(1), including the total amount of the Federal Award committed to the
subrecipient by the health center awardee;
◦ If any of the data elements contained in 45 CFR 75.352(a)(1) change, the health
center awardee must include the change(s) in a subsequent subaward
modification.
• The Health Center Program awardee must request and receive approval from HRSA to
make a subaward under the Federal award.
• The Health Center Program awardee must ensure that, at the time of making a
subaward, each subrecipient, which is a subawardee of Federal funds, complies with all
applicable requirements specified in the Federal award (including those found in section
330 of the PHS Act, implementing program regulations, and grants regulations in 45 CFR
Part 75).
• The Health Center Program awardee must monitor the ongoing activities of the
subrecipient to ensure that the subaward is used for authorized purposes and that the
subrecipient maintains compliance with all applicable requirements specified in the
Federal award (including those found in section 330 of the PHS Act, implementing
program regulations, and grants regulations in 45 CFR Part 75).
• The Health Center Program awardee must retain financial records, supporting
documents, statistical records, and all other records pertinent to the Health Center
Program award as carried out under any subawards for a period of three years from the
date of the submission of the final expenditures report to the health center awardee.
Health Center Program Compliance Manual
52
• The Health Center Program awardee must consider whether the results of the
subrecipient's audits, on-site reviews, or other monitoring indicate conditions that
necessitate adjustments to the Health Center Program awardee's own records and
whether the Health Center Program awardee must consider taking enforcement action
against noncompliant subrecipients as described in 45 CFR 75.371.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
Contracts: Procurement and Monitoring
a. The health center has written procurement procedures that comply with Federal
procurement standards, including a process for ensuring that all procurement costs
directly attributable to the Federal award are allowable, consistent with Federal Cost
Principles.
10
10
See 45 CFR 75 Subpart E: Cost Principles.
b. The health center has records for procurement actions paid for in whole or in part under
the Federal award that include the rationale for method of procurement, selection of
contract type, contractor selection or rejection, and the basis for the contract price. This
would include documentation related to noncompetitive procurements.
c. The health center retains final contracts and related procurement records, consistent
with Federal document maintenance requirements, for procurement actions paid for in
whole or in part under the Federal award.
11
11
See 45 CFR 75.361 for HHS retention requirements for records.
d. The health center has access to contractor records and reports related to health center
activities in order to ensure that all activities and reporting requirements are being
carried out in accordance with the provisions and timelines of the related contract (for
example, performance goals are achieved, Uniform Data System (UDS) data are
submitted by appropriate deadlines, funds are used for authorized purposes).
e. If the health center has arrangements with a contractor to perform substantive
programmatic work,
12
the health center requested and received prior approval from
HRSA as documented by:
12
For the purposes of the Health Center Program, contracting for substantive programmatic work applies to
contracting with a single entity for the majority of health care providers. The acquisition of supplies, material,
equipment, or general support services is not considered programmatic work. Substantive programmatic work
may be further defined within HRSA Notices of Funding Opportunity (NOFOs) and applications.
Health Center Program Compliance Manual
53
◦ An approved competing continuation/renewal of designation application or
other competitive application, which included such an arrangement; or
◦ An approved post-award request for such arrangements submitted within the
project period (for example, change in scope).
f. The health center’s contracts that support the HRSA-approved scope of project include
provisions that address the following:
◦ The specific activities or services to be performed or goods to be provided;
◦ Mechanisms for the health center to monitor contractor performance; and
◦ Requirements for the contractor to provide data necessary to meet the
recipient’s applicable Federal financial and programmatic reporting
requirements, as well as provisions addressing record retention and access,
audit, and property management.
13
13
For further guidance on these requirements, see HHS Grants Policy Statement.
Subawards: Monitoring and Management
g. If the health center has made a subaward, the health center requested and received
prior approval from HRSA as documented by:
◦ An approved competing continuation/renewal of designation application or
other competitive application, which included the subrecipient arrangement; or
◦ An approved post-award request for such subrecipient arrangements submitted
within the project period (for example, change in scope).
h. The health center’s subaward(s) that supports the HRSA-approved scope of project
includes provisions that address the following:
◦ The specific portion of the HRSA-approved scope of project to be performed by
the subrecipient;
◦ The applicability of all Health Center Program requirements to the subrecipient;
◦ The applicability to the subrecipient of any distinct statutory, regulatory, and
policy requirements of other Federal programs associated with their HRSA-
approved scope of project;
14
14
Subrecipients are generally eligible to receive FQHC payment rates under Medicaid and Medicare, 340B Drug
Pricing, and Federal Tort Claims Act (FTCA) coverage. However, such benefits are not automatically conferred and
may require additional actions and approvals (for example, submission and approval of a subrecipient FTCA
deeming application).
◦ Mechanisms for the health center to monitor subrecipient compliance and
performance;
◦ Requirements for the subrecipient to provide data necessary to meet the health
center’s applicable Federal financial and programmatic reporting requirements,
as well as provisions addressing record retention and access, audit, and property
management;
15
15
For further guidance on these requirements, see the HHS Grants Policy Statement.
and
Health Center Program Compliance Manual
54
◦ Requirements that all costs paid for by the Federal subaward are allowable
consistent with Federal Cost Principles.
16
16
See 45 CFR 75 Subpart E: Cost Principles.
i. The health center monitors the activities of its subrecipient to ensure that the subaward
is used for authorized purposes and that the subrecipient maintains compliance with all
applicable requirements specified in the Federal award (including those found in section
330 of the PHS Act, implementing program regulations and grants regulations in 45 CFR
Part 75). Specifically, the health center’s monitoring of the subrecipient includes:
◦ Reviewing financial and performance reports required by the health center in
order to ensure performance goals are achieved, UDS data are submitted by
appropriate deadlines, and funds are used for authorized purposes;
◦ Ensuring that the subrecipient takes timely and appropriate action on all
deficiencies pertaining to the subaward that may be identified through audits,
on-site reviews, and other means; and
◦ Issuing a management decision for audit findings pertaining to the subaward.
17
17
Per 45 CFR 75.521, the management decision [issued by the health center to the subrecipient] must clearly state
whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to
repay disallowed costs, make financial adjustments, or take other action.
j. The health center retains final subrecipient agreements and related records, consistent
with Federal document maintenance requirements.
18
18
See 45 CFR 75.361 for HHS retention requirements for records.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center determines the methods it will utilize to monitor contractor activities
and performance. Such monitoring could include:
◦ Periodic evaluations of contractor performance (for example, results from
reviews of invoices and records, reports from staff of contractor activity) that are
shared with the board and management staff; and/or
◦ Documentation at the time of contract completion or renewal that the
contractor has met the terms, conditions, and specifications of the contract.
• The health center determines the methods it will utilize to settle any contractual or
administrative issues arising out of procurements, with respect to contracts (for
example protests, disputes, claims) or how to take enforcement actions in the case of
subawards.
Health Center Program Compliance Manual
55
• The health center determines the methods it will utilize to monitor subrecipient
compliance and performance with Health Center Program requirements. Such
monitoring could include:
◦ Receiving/reviewing copies of the subrecipient governing board’s meeting
minutes;
◦ Performing site visits;
◦ Conducting regular check-in calls and updates regarding Health Center Program
requirements or new Health Center Program policies;
◦ Receiving/reviewing the subrecipient’s annual audit;
◦ Conducting periodic joint meetings between the two entities’ boards, or
between the health center’s key management staff and the subrecipient’s board;
◦ Receiving/reviewing periodic written reports from the subrecipient; and/or
◦ Sharing data and creating systems for the sharing of financial and medical
records for the purpose of Health Center Program data reporting.
Health Center Program Compliance Manual
56
Chapter 13: Conflict of Interest
Authority
Section 330(a)(1) and 330(k)(3)(D) of the PHS Act; 42 CFR 51c.113 and 42 CFR 56.114; and 45
CFR 75.327
Requirements
• The health center must maintain written standards of conduct covering conflicts of
interest
1
and governing the actions of its employees engaged in the selection, award, or
administration of contracts that comply with all applicable Federal requirements.
1
A conflict of interest arises when the employee, officer, or agent (including but not limited to any member of the
governing board), any member of his or her immediate family, his or her partner, or an organization which
employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible
personal benefit from a firm considered for a contract. See: 45 CFR 75.327(c)1.
• No employee, officer, or agent
2
of the health center may participate in the selection,
award, or administration of a contract supported by a Federal award if he or she has a
real or apparent conflict of interest.
2
An agent of the health center includes, but is not limited to, a governing board member, an employee, officer, or
contractor acting on behalf of the health center.
• Officers, employees, and agents of the health center may neither solicit nor accept
gratuities, favors, or anything of monetary value from contractors or parties to
subcontracts.
• The health center’s standards of conduct must provide for disciplinary actions to be
applied for violations of such standards by officers, employees, or agents of the health
center.
• If the health center has a parent, affiliate, or subsidiary organization that is not a State,
local government, or Indian tribe, the health center also must maintain written
standards of conduct covering organizational conflicts of interest.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
Health Center Program Compliance Manual
57
a. The health center has and implements written standards of conduct that apply, at a
minimum, to its procurements paid for in whole or in part by the Federal award. Such
standards:
◦ Apply to all health center employees, officers, board members, and agents
involved in the selection, award, or administration of such contracts;
◦ Require written disclosure of real or apparent conflicts of interest;
◦ Prohibit individuals with real or apparent conflicts of interest with a given
contract from participating in the selection, award, or administration of such
contract;
3
3
This includes, but is not limited to, prohibiting board members that are employees or contractors of a
subrecipient of the health center from participating in the selection, award, or administration of that subaward.
This also includes prohibiting board members who are employees of an organization that contracts with the health
center from participating in the selection, award, or administration of that contract.
◦ Restrict health center employees, officers, board members, and agents involved
in the selection, award, or administration of contracts from soliciting or
accepting gratuities, favors, or anything of monetary value for private financial
gain from such contractors or parties to sub-agreements (including subrecipients
or affiliate organizations);
4
4
Health centers may set standards for situations in which the financial interest is not substantial or the gift is an
unsolicited item of nominal value. See
and
R
elated Considerations in this chapter.
◦ Enforce disciplinary actions on health center employees, officers, board
members, and agents for violating these standards.
b. If the health center has a parent, affiliate, or subsidiary that is not a State, local
government, or Indian tribe, the health center has and implements written standards of
conduct covering organizational conflicts of interest
5
that might arise when conducting
a procurement action involving a related organization.
5
Organizational conflicts of interest mean that because of relationships with a parent company, affiliate, or
subsidiary organization, the health center is unable or appears to be unable to be impartial in conducting a
procurement action involving a related organization. See: 45 CFR 75.327(c)(2).
These standards of conduct
require:
◦ Written disclosure of conflicts of interest that arise in procurements from a
related organization; and
◦ Avoidance and mitigation of any identified actual or apparent conflicts during
the procurement process.
c. The health center has mechanisms or procedures for informing its employees, officers,
board members, and agents of the health center’s standards of conduct covering
conflicts of interest, including organizational conflicts of interest, and for governing its
actions with respect to the selection, award and administration of contracts.
d. In cases where a conflict of interest was identified, the health center’s procurement
records document adherence to its standards of conduct (for example, an employee
Health Center Program Compliance Manual
58
whose family member was competing for a health center contract was not permitted to
participate in the selection, award, or administration of that contract).
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center determines the appropriate methods for employees, officers, board
members, and agents to disclose real or apparent conflicts of interest, as it applies to
the procurement process.
• The health center determines how to inform its employees, officers, board members,
and agents about the health center’s standards of conduct (for example, inclusion
within operating procedures or staff manuals, as part of disclosure forms/statements,
employee and board orientations or trainings).
• The health center determines whether to establish additional standards of conduct that
are not addressed by Federal requirements.
• The health center determines whether to set standards that define when a financial
interest is not substantial or a gift is an unsolicited item of nominal value and, therefore,
could be accepted by employees, officers, board members, and agents of the health
center.
Health Center Program Compliance Manual
59
Chapter 14: Collaborative Relationships
Note: This chapter contains revisions based on the Bipartisan Budget Act of 2018. View the
revisions.
Authority
Section 330(k)(3)(B) of the PHS Act; and 42 CFR 51c.303(n), 42 CFR 56.303(n), and 42 CFR
51c.305(h)
Requirements
• The health center has made and must continue to make every reasonable effort to
establish and maintain collaborative relationships, including with other health care
providers that provide care within the catchment area [service area], local hospitals, and
specialty providers in the catchment area of the center, to provide access to services not
available through the health center and to reduce the non-urgent use of hospital
emergency departments.
•
To the extent possible, the health center must coordinate and integrate project
activities with the activities of other federally-funded, as well as State and local, health
services delivery projects and programs serving the same population.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
a. The health center documents its efforts to collaborate with other providers or programs
in the service area, including local hospitals, specialty providers, and social service
organizations (including those that serve special populations), to provide access to
services not available through the health center in order to support
◦ Reductions in the non-urgent use of hospital emergency departments;
◦
Continuity of care across community providers; and
◦ Access to other health or community services that impact the patient
population.
b. The health center documents its efforts to coordinate and integrate activities with other
federally-funded, as well as State and local, health services delivery projects and
programs serving similar patient populations in the service area (at a minimum, this
would include establishing and maintaining relationships with other health centers in
the service area).
Health Center Program Compliance Manual
60
c. If the health center expands
1,2
its HRSA-approved scope of project:
1
Expanding the HRSA-approved scope of project may occur by adding sites or services through change-in-scope
requests, New Access Point competitive applications, or other supplemental funding applications.
2
Additional requirements for documented collaboration may apply based on specific Notices of Funding
Opportunity (NOFOs), Notices of Award (NOAs), look-alike designation instructions, or other Federal statutes,
regulations, or policies.
◦ The health center obtains letters or other appropriate documents specific to the
request or application that describe areas of coordination or collaboration with
health care providers serving similar patient populations in the service area
(health centers, rural health clinics, local hospitals including critical access
hospitals, health departments, other providers including specialty providers, as
applicable); or
◦ If such letters or documents cannot be obtained from these providers, the health
center documents its attempts to coordinate or collaborate with these health
care providers (health centers, rural health clinics, local hospitals including
critical access hospitals, health departments, other providers including specialty
providers, as applicable) on the specific request or application proposal.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center determines how to document collaboration or coordination with
providers and organizations in its service area (for example, through a memorandum of
agreement, letters, membership on a city-wide community health planning council).
Health Center Program Compliance Manual
61
Chapter 15: Financial Management and Accounting Systems
Note: This chapter contains revisions based on the Bipartisan Budget Act of 2018. View the
revisions.
Authority
Sections 330(e)(5)(D), 330(k)(3)(D), 330(k)(3)(N), and 330(q) of the PHS Act; 42 CFR 51c.113, 42
CFR 56.114, 42 CFR 51c.303(d), and 42 CFR 56.303(d); and 45 CFR Part 75 Subparts D, E and F
Requirements
• The health center must maintain effective control over, and accountability for, all funds,
property, and other assets in order to adequately safeguard all such assets and ensure
that they are used solely for authorized purposes.
• The health center must have written policies and procedures in place to ensure the
appropriate use of Federal funds in compliance with applicable Federal statutes,
regulations, and the terms and conditions of the Federal award.
• The health center must develop and utilize financial management and control systems
in accordance with sound financial management procedures which ensure at a
minimum:
◦ The fiscal integrity of grant financial transactions and reports; and
◦ Ongoing compliance with Federal statutes, regulations, and the terms and
conditions of the Health Center Program award or designation.
• The health center’s financial management system must specifically identify in its
accounts all Federal awards, including the Federal award made under the Health Center
Program, received and expended and the Federal programs under which they were
received (see 45 CFR 75.302). This financial management system must also provide for
all of the following:
◦ Accurate, current, and complete disclosure of the financial results of each
Federal award or program in accordance with the reporting requirements (see
45 CFR 75.341 and 75.342);
◦ Records that identify the source (receipt) and application (expenditure) of funds
for federally-funded activities. These records must contain information
pertaining to Federal awards, authorizations, obligations, unobligated balances,
assets, expenditures, income, and interest, and be supported by source
documentation (see: 45 CFR 75.302(b)(3));
Health Center Program Compliance Manual
62
◦ Written procedures that minimize the time elapsing between the transfer of
Federal award funds from HHS and the disbursement of these funds by the
health center (see 45 CFR 75.305);
◦ Written procedures for assuring that expenditures of Federal award funds are
allowable in accordance with the terms and conditions of the Federal award and
with the Federal Cost Principles (see 45 CFR Part 75 Subpart E).
• A health center that expends $750,000 or more in Federal awards during its fiscal year
must have a single or program-specific audit conducted for that year in accordance with
the provisions of 45 CFR Part 75 Subpart F.
• The health center must use any non-grant funds as permitted under section 330, and
may use such funds for such other purposes as are not specifically prohibited under
section 330, if such use furthers the objectives of the [health center] project.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
a. The health center has and utilizes a financial management and internal control system
that reflects Generally Accepted Accounting Principles (GAAP) for private non-profit
health centers or Government Accounting Standards Board (GASB) principles for public
agency health centers
1
and that ensures at a minimum:
1
GAAP and GASB are used as defined in 45 CFR Part 75.
◦ Health center expenditures are consistent with the HRSA-approved total budget
2
and with any additional applicable HRSA approvals that have been requested
and received;
3
2
A health center’s “total budget” includes the Health Center Program Federal award funds and all other sources of
revenue in support of the HRSA-approved Health Center Program scope of project. For additional detail, see
Chapter 17: Budget.
3
Per 45 CFR 75.308, post-award, Federal award recipients are required to report significant deviations from
budget or project scope or objective, and are required to request prior approvals from HHS awarding agencies for
budget and program plan revisions (re-budgeting). “Re-budgeting, or moving funds between direct cost budget
categories in an approved budget, is considered significant when cumulative transfers for a single budget period
exceeds 25 percent of the total approved budget (inclusive of direct and indirect costs and Federal funds and
required matching or cost sharing). The base used for determining significant re-budgeting excludes carryover
balances but includes any amounts awarded as supplements.”
◦ Effective control over, and accountability for, all funds, property, and other
assets associated with the Health Center Program project;
◦ The safeguarding of all assets to assure they are used solely for authorized
purposes in accordance with the terms and conditions of the Health Center
Health Center Program Compliance Manual
63
Program award/designation;
4
4
The requirement to safeguard federal assets as described in this bullet substantially reflects the requirement to
have written policies and procedures in place to ensure the appropriate use of Federal funds in compliance with
applicable Federal statutes, regulations, and the terms and conditions of the Federal award.
See Section
330(k)(3)(N) of the Public Health Service Act.
and
◦ The capacity to track the financial performance of the health center, including
identification of trends or conditions that may warrant action by the
organization to maintain financial stability.
b. The health center’s financial management system is able to account for all Federal
award(s) (including the Federal award made under the Health Center Program) in order
to identify the source
5
(receipt) and application (expenditure) of funds for federally-
funded activities in whole or in part.
5
Federal program and Federal award identification would include, as applicable, the Catalog of Federal Domestic
Assistance (CFDA) title and number, Federal award identification number and year, name of the HHS awarding
agency, and name of the pass-through entity
, if any.
Specifically, the health center’s financial records
contain information and related source documentation pertaining to authorizations,
obligations, unobligated balances, assets, expenditures, income, and interest under the
Federal award(s).
c. The health center has written procedures for:
◦ Drawing down Federal award funds in a manner that minimizes the time elapsing
between the transfer of the Federal award funds from HRSA and the
disbursement of these funds by the health center; and
◦ Assuring that expenditures of Federal award funds are allowable in accordance
with the terms and conditions of the Federal award and with the Federal Cost
Principles
6
in 45 CFR Part 75 Subpart E.
6
The cost principles are set forth in 45 CFR Part 75, Subpart E.
d. If a health center expends $750,000 or more in award funds from all Federal sources
during its fiscal year, the health center ensures a single or program-specific audit is
conducted and submitted for that year in accordance with the provisions of 45 CFR Part
75, Subpart F: Audit Requirements and ensures that subsequent audits demonstrate
corrective actions have been taken to address all findings, questioned costs, reportable
conditions, and material weaknesses cited in the previous audit report, if applicable.
e. The health center can document that any non-grant funds generated from Health
Center Program project activities, in excess of what is necessary to support the HRSA-
approved total Health Center Program project budget, were utilized to further the
objectives of the project by benefiting the current or proposed patient population and
were not utilized for purposes that are specifically prohibited by the Health Center
Program.
Related Considerations
Health Center Program Compliance Manual
64
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center determines which accounting software and related systems to use for
financial management.
• The health center determines the type, frequency, and format of financial reports used
to support the board and the key management staff’s ability to carry out its oversight
responsibilities.
• The health center determines which specific actions to take in response to negative
financial trending and its method for monitoring the results of those actions.
Health Center Program Compliance Manual
65
Chapter 16: Billing and Collections
Authority
Section 330(k)(3)(E), (F), and (G) of the PHS Act; and 42 CFR 51c.303(e), (f), and (g) and 42 CFR
56.303(e), (f), and (g)
Requirements
• The health center must prepare a schedule of fees for the provision of its services
consistent with locally prevailing rates or charges and designed to cover its reasonable
costs of operation.
• The health center must assure that any fees or payments required by the center for
health care services will be reduced or waived in order to assure that no patient will be
denied such services due to an individual’s inability to pay for such services.
• The health center must establish systems for eligibility determination and for billing and
collections [with respect to third party payors].
• The health center must make every reasonable effort to enter into contractual or other
arrangements to collect reimbursement of its costs with the appropriate agency(s) of
the State which administers or supervises the administration of:
◦ A State Medicaid plan approved under title XIX of the Social Security Act (SSA) [42
U.S.C. 1396, et seq.] for the payment of all or a part of the center's costs in providing
health services to persons who are eligible for such assistance; and
◦ The Children’s Health Insurance Program (CHIP) under title XXI of the SSA [42 U.S.C.
1397aa, et seq.] with respect to individuals who are State CHIP beneficiaries.
• The health center must make and continue to make every reasonable effort to collect
appropriate reimbursement for its costs on the basis of the full amount of fees and
payments for health center services without application of any discount when providing
health services to persons who are entitled to:
◦ Medicare coverage under title XVIII of the SSA [42 U.S.C. 1395 et seq.];
◦ Medicaid coverage under a State plan approved under title XIX of the SSA [42
U.S.C. 1396 et seq.]; or
◦ Assistance for medical expenses under any other public assistance program (for
example, CHIP), grant program, or private health insurance or benefit program.
• The health center must make and continue to make every reasonable effort to secure
payment for services from patients, in accordance with health center fee schedules and
the corresponding schedule of discounts.
Demonstrating Compliance
Health Center Program Compliance Manual
66
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
a. The health center has a fee schedule for services that are within the HRSA-approved
scope of project and are typically billed for in the local health care market.
b. The health center uses data on locally prevailing rates and actual health center costs to
develop and update its fee schedule.
c. The health center participates in Medicaid, CHIP, Medicare, and, as appropriate, other
public or private assistance programs or health insurance.
d. The health center has systems, which may include operating procedures, for billing and
collections that address:
◦ Educating patients on insurance and, if applicable, related third-party coverage
options available to them;
◦ Billing Medicare, Medicaid, CHIP, and other public and private assistance programs
or insurance in a timely manner, as applicable;
1
1
For information on Federal Tort Claims Act (FTCA) coverage in cases where health centers are using alternate
billing arrangements in which the covered provider is billing directly for services provided to covered entity
patients, refer to the FTCA Health Center Policy Manual
, Section I.E: Eligibility and Coverage, Coverage Under
Alternate Billing Arrangements.
and
◦ Requesting applicable payments from patients, while ensuring that no patient is
denied service based on inability to pay.
e. If a health center elects to offer additional billing options or payment methods (for
example, payment plans, grace periods, prompt or cash payment incentives), the health
center has operating procedures for implementing these options or methods and for
ensuring they are accessible to all patients regardless of income level or sliding fee
discount pay class.
f. The health center has billing records that show claims are submitted in a timely and
accurate manner to the third party payor sources with which it participates (Medicaid,
CHIP, Medicare, and other public and private insurance) in order to collect
reimbursement for its costs in providing health services
2
consistent with the terms of
such contracts and other arrangements.
2
This includes services that the health center provides directly (Form 5A: Services Provided, Column I) or provides
through a formal written contract/agreement (Form 5A: Services Provided, Column II).
g. The health center has billing records or other forms of documentation that reflect that
the health center:
◦ Charges patients in accordance with its fee schedule and, if applicable, the
sliding fee discount schedule;
3
3
See Chapter 9: Sliding Fee Discount Program for more information on the sliding fee discount schedule.
and
Health Center Program Compliance Manual
67
◦ Makes reasonable efforts to collect such amounts owed from patients.
h. The health center has and utilizes board-approved policies, as well as operating
procedures, that include the specific circumstances when the health center will waive or
reduce fees or payments required by the center due to any patient’s inability to pay.
i. If a health center provides supplies or equipment that are related to, but not included
in, the service itself as part of prevailing standards of care
4
(for example, eyeglasses,
prescription drugs, dentures) and charges patients for these items, the health center
informs patients of such charges (“out-of-pocket costs”) prior to the time of service.
5
4
These items differ from supplies and equipment that are included in a service as part of prevailing standards of
care and are reflected in the fee schedule (e.g., casting materials, bandages).
5
See Chapter 15: Financial Management and Accounting Systems for related information on revenue generated
from such charges.
j. If a health center elects to limit or deny services based on a patient’s refusal to pay, the
health center has a board-approved policy that distinguishes between refusal to pay and
inability to pay and notifies patients of:
◦ Amounts owed and the time permitted to make such payments;
◦ Collection efforts that will be taken when these situations occur (for example,
meeting with a financial counselor, establishing payment plans); and
◦ How services will be limited or denied when it is determined that the patient has
refused to pay.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center determines how to consider both locally prevailing charges and actual
costs for services when setting the fee schedule, as well as the data used to determine
locally prevailing charges (for example, Medicare, Medicaid, private providers, or
commercial sources).
• The health center determines whether to charge a single fee for related health center
services, medically-related supplies, and/or equipment. Examples include, but are not
limited to, charging a single fee for a well-child visit and the immunizations provided
during that visit or combining all prenatal care visits and labs into a single fee.
• The health center determines whether to participate in a specific insurance plan based
on its patient population and the costs and benefits of such participation.
Health Center Program Compliance Manual
68
• If a health center has a funding source that subsidizes or covers all or part of the fees for
certain services for specific patients (in accordance with the terms and conditions of
such funding sources), the health center may use such funding sources to support
discounts greater than those available through the health center’s sliding fee discount
program.
6
6
Health centers that have questions on the appropriate use of other Federal, state, local, or private funds should
refer to those program sources for additional guidance. See Chapter 9: Sliding Fee Discount Program for
information on the Health Center Program requirements related to the sliding fee discount program.
• If a health center elects to provide its patients access to supplies or equipment (for
example, eyeglasses, prescription drugs, dentures) that are related to, but not included
in, the service itself as part of prevailing standards of care, the health center determines
how to charge its patients for such supplies or equipment (for example, flat discounts, at
cost, sliding fee discounts).
• If a health center limits or denies services to patients based on refusal to pay, the health
center determines how and when such patients may be permitted to rejoin the
practice.
Health Center Program Compliance Manual
69
Chapter 17: Budget
Authority
Section 330(e)(5)(A) and Section 330(k)(3)(I)(i) of the PHS Act; and 45 CFR 75.308(a) and 45 CFR
75 Subpart E
Requirements
• The health center must develop an annual budget that:
◦ Identifies the projected costs of the Health Center Program project;
◦ Identifies the projected costs to be supported by Health Center Program [award]
funds, consistent with Federal Cost Principles
1
and any other requirements or
restrictions on the use of Federal funding;
1
See 45 CFR Part 75 Subpart E: Cost Principles.
and
◦ Includes all other non-Federal revenue sources that will support the Health
Center Program project, including:
• State, local, and other operational funding; and
• Fees, premiums, and third-party reimbursements which the health center
may reasonably be expected to receive for its operation of the Health Center
Program project.
• The health center must submit this budget annually by a date specified by HRSA for
approval through the Federal award or designation process.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
a. The health center develops and submits to HRSA (for new or continued funding or
designation from HRSA) an annual budget, also referred to as a “total budget,”
2,3
that
reflects projected costs and revenues necessary to support the health center’s proposed
or HRSA-approved scope of project.
2
A health center’s “total budget” includes the Health Center Program Federal award funds and all other sources of
revenue in support of the health center scope of project.
3
Any aspects of the requirement that relate to the use of Health Center Program Federal award funds are not
applicable to look-alikes.
b. In addition to the Health Center Program award, the health center’s annual budget
includes all other projected revenue sources that will support the Health Center
Program project, specifically:
Health Center Program Compliance Manual
70
◦ Fees, premiums, and third-party reimbursements and payments that are
generated from the delivery of services;
◦ Revenues from state, local, or other Federal grants (for example, Ryan White,
Healthy Start) or contracts;
◦ Private support or income generated from contributions; and
◦ Any other funding expected to be received for purposes of supporting the Health
Center Program project.
c. The health center’s annual budget identifies the portion of projected costs to be
supported by the Federal Health Center Program award. Any proposed costs supported
by the Federal award are consistent with the Federal Cost Principles
4
and the terms and
conditions
5
of the award.
4
See 45 CFR Part 75 Subpart E: Cost Principles.
5
For example, health centers may not use HHS Federal award funds to support salary levels above the salary
limitations on Federal awards.
d. If the health center organization conducts other lines of business (i.e., activities that are
not part of the HRSA-approved scope of project), the costs of these other activities are
not included in the annual budget for the Health Center Program project.
6
6
As these other lines of business are not included in the health center’s total budget, they are not subject to
Health Center Program requirements and not eligible for related Health Center Program benefits (for example,
payment as a FQHC
under Medicare/Medicaid/CHIP, 340B Program eligibility, Federal Tort Claims Act (FTCA)
coverage).
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center determines how to allocate projected costs between Health Center
Program award funds, consistent with Federal requirements, and other projected
revenue sources within the annual budget.
Health Center Program Compliance Manual
71
Chapter 18: Program Monitoring and Data Reporting Systems
Authority
Section 330(k)(3)(I)(ii) of the PHS Act; 42 CFR 51c.303(j) and 42 CFR 56.303(j); and 45 CFR
75.342(a) and (b)
Requirements
• The health center must establish systems for monitoring program performance to
ensure:
◦ Oversight of the operations of the Federal award [or designation]-supported
activities in compliance with applicable Federal requirements;
◦ Performance expectations [as described in the terms or conditions of the Federal
award or designation] are being achieved; and
◦ Areas for improvement in program outcomes and productivity [efficiency and
effectiveness] are identified.
• The health center must compile and report data and other information as required by
HRSA, relating to:
◦ Costs of health center operations;
◦ Patterns of health center service utilization;
◦ Availability, accessibility, and acceptability of health center services; and
◦ Other matters relating to operations of the Health Center Program project, as
required.
• The health center must submit required data and information to HRSA in a timely
manner and with such frequency as prescribed by HRSA.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
a. The health center has a system in place for overseeing the operations of the Federal
award-supported activities to ensure compliance with applicable Federal requirements
and for monitoring program performance. Specifically:
◦ The health center has a system in place to collect and organize data related to
the HRSA-approved scope of project, as required to meet HHS reporting
requirements, including those data elements for Uniform Data System (UDS)
reporting; and
Health Center Program Compliance Manual
72
◦ The health center submits timely, accurate, and complete UDS reports in
accordance with HRSA instructions and submits any other required HHS and
Health Center Program reports.
b. The health center produces data-based reports on: patient service utilization; trends
and patterns in the patient population;
1
and overall health center performance, as
necessary to inform and support internal decision-making and oversight by the health
center’s key management staff and by the governing board.
1
Examples of data health centers may analyze as part of such reports may include patient access to and
satisfaction with health center services, patient demographics, quality of care indicators, and health outcomes.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• In fulfilling HRSA reporting obligations, the health center determines the type of data
system(s) (for example, type of Electronic Health Record software, use of practice
management system) it will utilize based on its needs and the size and complexity of the
health center’s operations.
• The health center determines the number, format, and types of reports the system
generates to support governing board and key management staff internal decision
making.
Health Center Program Compliance Manual
73
Chapter 19: Board Authority
Note: This chapter contains revisions based on the Bipartisan Budget Act of 2018. View the
revisions.
Authority
Section 330(k)(3)(H) of the PHS Act; 42 CFR 51c.303(i), 42 CFR 56.303(i), 42 CFR 51c.304(d), and
42 CFR 56.304(d); and 45 CFR 75.507(b)(2)
Requirements
1
1
The governing board of a health center operated by Indian tribes, tribal groups, or Indian organizations under the
Indian Self-Determination Act or Urban Indian Organizations under the Indian Health Care Improvement Act is
exempt from the specific board authority requirements discussed in this chapter. Section 330(k)(3)(H) of the PHS
Act.
• The health center must establish a governing board
2
that has specific responsibility for
oversight of the Health Center Program project.
2
For public agencies that elect to have a co-applicant, these authorities and functions apply to the co-applicant
board.
• The health center governing board must develop bylaws which specify the
responsibilities of the board.
• The health center governing board must assure that the center is operated in
compliance with applicable Federal, State, and local laws and regulations.
• The health center governing board must hold monthly meetings
3,4
and record in
meeting minutes the board’s attendance, key actions, and decisions.
3
Where geography or other circumstances make monthly, in-person participation in board meetings burdensome,
monthly meetings may be conducted by telephone or other means of electronic communication where all parties
can both listen and speak to all other parties.
4
Boards of organizations receiving a Health Center Program award/designation only under section 330(g) may
meet less than once a month during periods of the year, as specified in the bylaws, where monthly meetings are
not practical due to health center patient migration out of the area. 42 CFR 56.304(d)(2).
• The health center governing board must approve the selection and
termination/dismissal of the health center’s Project Director/Chief Executive Officer
(CEO).
• The health center governing board must have authority for establishing or adopting
policies for the conduct of the Health Center Program project and for updating these
Health Center Program Compliance Manual
74
policies when needed. Specifically, the health center governing board must have
authority for:
◦ Adopting policies for financial management practices and a system to ensure
accountability for center resources (unless already established by the public
agency as the Federal award or designation recipient), including periodically
reviewing the financial status of the health center and the results of the annual
audit to ensure appropriate follow-up actions are taken;
5
5
See Chapter 15: Financial Management and Accounting Systems for more information on the related
requirements.
◦ Adopting policy for eligibility for services including criteria for partial payment
schedules;
6
6
See Chapter 9: Sliding Fee Discount Program for more information on the related requirements.
◦ Establishing and maintaining general personnel policies for the health center
(unless already established by the public agency as the Federal award or
designation recipient), including those addressing selection and dismissal
procedures, salary and benefit scales, employee grievance procedures, and equal
opportunity practices; and
◦ Adopting health care policies including quality-of-care audit procedures.
• The health center governing board must adopt health care policies including the:
◦ Scope and availability of services to be provided within the Health Center
Program project, including decisions to subaward or contract for a substantial
portion of the services;
7,8
7
See Chapter 4: Required and Additional Health Services for more information on the requirements associated
with providing services within the HRSA-approved scope of project.
8
See Chapter 12: Contracts and Subawards for more information on the requirements associated with such
arrangements.
◦ Service site location(s);
9
9
See Chapter 6: Accessible Locations and Hours of Operation for more information on the requirements associated
with health center service sites and hours of operation.
and
◦ Hours of operation of service sites.
• The health center governing board must review and approve the annual Health Center
Program project budget.
10
10
See Chapter 17: Budget for more information on the requirements of the Health Center Program project budget.
• The health center must develop its overall plan for the Health Center Program project
under the direction of the governing board.
• The health center governing board must provide direction for long-range planning,
including but not limited to identifying health center priorities and adopting a three-year
plan for financial management and capital expenditures.
Health Center Program Compliance Manual
75
• The health center governing board must assess the achievement of project objectives
through evaluation of health center activities, including service utilization patterns,
productivity [efficiency and effectiveness] of the center, and patient satisfaction.
• The health center governing board must ensure that a process is developed for hearing
and resolving patient grievances.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
a. The health center’s organizational structure, articles of incorporation, bylaws, and other
relevant documents ensure the health center governing board maintains the authority
for oversight of the Health Center Program project, specifically:
◦ The organizational structure and documents do not allow for any other
individual, entity or committee (including, but not limited to, an executive
committee authorized by the board) to reserve approval authority or have veto
power over the health center board with regard to the required authorities and
functions;
11
11
This does not preclude an executive committee from taking actions on behalf of the board in emergencies, on
which the full board will subsequently vote.
◦ In cases where a health center collaborates with other entities in fulfilling the
health center’s HRSA-approved scope of project, such collaboration or
agreements with the other entities do not restrict or infringe upon the health
center board’s required authorities and functions; and
◦ For public agencies with a co-applicant board;
12
the health center has a co-
applicant agreement that delegates the required authorities and functions to the
co-applicant board and delineates the roles and responsibilities of the public
agency and the co-applicant in carrying out the Health Center Program project.
12
Public agencies are permitted to utilize a co-applicant governance structure for the purposes of meeting Health
Center Program governance requirements. Public centers may be structured in one of two ways to meet the
program requirements: 1) the public agency independently meets all the Health Center Program governance
requirements based on the existing structure and vested authorities of the public agency’s governing board; or 2)
together, the public agency and the co-applicant meet all Health Center Program requirements.
b. The health center’s articles of incorporation, bylaws, or other relevant documents
outline the following required authorities and responsibilities of the governing board:
◦ Holding monthly meetings;
◦ Approving the selection (and termination or dismissal, as appropriate) of the
health center’s Project Director/CEO;
◦ Approving the annual Health Center Program project budget and applications;
◦ Approving health center services and the location and hours of operation of
health center sites;
Health Center Program Compliance Manual
76
◦ Evaluating the performance of the health center;
◦ Establishing or adopting policy
13
related to the operations of the health center;
13
The governing board of a health center is generally responsible for establishing and/or approving policies that
govern health center operations, while the health center’s staff is generally responsible for implementing and
ensuring adherence to these policies (including through operating procedures).
and
◦ Assuring the health center operates in compliance with applicable Federal, State,
and local laws and regulations.
c. The health center’s board minutes and other relevant documents confirm that the
board exercises, without restriction, the following authorities and functions:
◦ Holding monthly meetings where a quorum is present to ensure the board has
the ability to exercise its required authorities and functions;
◦ Approving the selection, evaluation and, if necessary, the dismissal or
termination of the Project Director/CEO from the Health Center Program project;
◦ Approving applications related to the Health Center Program project, including
approving the annual budget, which outlines the proposed uses of both Health
Center Program award and non-Federal resources and revenue;
◦ Approving the Health Center Program project’s sites, hours of operation and
services, including decisions to subaward or contract for a substantial portion of
the health center’s services;
◦ Monitoring the financial status of the health center, including reviewing the
results of the annual audit, and ensuring appropriate follow-up actions are
taken;
◦ Conducting long-range/strategic planning at least once every three years, which
at a minimum addresses financial management and capital expenditure needs;
and
◦ Evaluating the performance of the health center based on quality
assurance/quality improvement assessments and other information received
from health center management,
14
and ensuring appropriate follow-up actions
are taken regarding:
14
For more information related to the production of reports associated with these topics, see Chapter 18: Program
Monitoring and Data Reporting Systems, Chapter 15: Financial Management and Accounting Systems, and Chapter
10: Quality Improvement/Assurance.
• Achievement of project objectives;
• Service utilization patterns;
• Quality of care;
• Efficiency and effectiveness of the center; and
• Patient satisfaction, including addressing any patient grievances.
Health Center Program Compliance Manual
77
d. The health center board has adopted, evaluated at least once every three years, and, as
needed, approved updates to policies in the following areas: Sliding Fee Discount
Program, Quality Improvement/Assurance, and Billing and Collections.
15
15
Policies related to billing and collections that require board approval include those that address the waiving or
reducing of amounts owed by patients due to inability to pay, and if applicable those that limit or deny services
due to refusal to pay.
e. The health center board has adopted, evaluated at least once every three years, and, as
needed, approved updates to policies that support financial management and
accounting systems and personnel policies. However, in cases where a public agency is
the recipient of the Health Center Program Federal award or designation and has
established a co-applicant structure, the public agency may establish and retain the
authority to adopt and approve policies that support financial management and
accounting systems and personnel policies.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center board determines how to carry out required responsibilities,
functions, and authorities in areas such as the following:
◦ Whether to establish standing committees, including the number and type of
such committees (for example, executive, finance, quality improvement,
personnel, planning).
◦ Whether to seek input or assistance from other organizations or subject matter
experts (for example, joint committees for health centers that collaborate closely
with other organizations, consultants, community leaders).
◦ How often the Project Director/CEO performance is evaluated.
• The health center determines how to set quorum for board meetings consistent with
state, territorial or other applicable law.
• The health center board determines the format of its long-range/strategic planning.
• For public agencies with co-applicant boards, the co-applicant board and the public
agency determine how to collaborate in carrying out the Health Center Program project
(for example, shared project assessment, public agency participation on board
committees, joint preparation of grant applications).
Health Center Program Compliance Manual
78
Chapter 20: Board Composition
Authority
Section 330(k)(3)(H) of the PHS Act; and 42 CFR 51c.304 and 42 CFR 56.304
Requirements
1,2
1
The governing board of a health center operated by Indian tribes, tribal groups, or Indian organizations under the
Indian Self-Determination Act or Urban Indian Organizations under the Indian Health Care Improvement Act is
exempt from the specific board composition requirements discussed in this document. Section 330(k)(3)(H) of the
PHS Act.
2
For public agencies that elect to have a co-applicant, these board composition requirements apply to the co-
applicant board.
• The health center’s governing board must consist of at least 9 and no more than 25
members.
3
3
42 CFR 51c.304(a) and 42 CFR 56.304(a) permit that the requirement regarding board size may be waived by the
Secretary for good cause shown. HRSA will not grant such waivers except where the health center has
demonstrated to HRSA an inability to meet the requirement.
• The majority [at least 51 percent] of the health center board members must be
patients
4
served by the health center.
4
Patient board members are also often referred to as “user” or “consumer” board members. However, for the
purposes of this chapter, only the term “patient” or “non-patient” board member will be used for ease of
reference.
These health center patient board members
must, as a group, represent the individuals who are served by the health center in terms
of demographic factors, such as race, ethnicity, and gender.
• Non-patient health center board members must be representative of the community
served by the health center and must be selected for their expertise in relevant subject
areas, such as community affairs, local government, finance and banking, legal affairs,
trade unions, and other commercial and industrial concerns, or social service agencies
within the community.
• Of the non-patient health center board members, no more than one-half may derive
more than 10 percent of their annual income from the health care industry.
5
5
Per the regulations in 42 CFR 56.304, for health centers awarded/designated solely under section 330(g) of the
PHS Act, no more than two-thirds of the non-patient board members may derive more than 10 percent of their
annual income from the health care industry.
• A health center board member may not be an employee of the center, or spouse or
child, parent, brother or sister by blood or marriage of such an employee.
6
6
While no board member may be an employee of the health center, 42 CFR 51c.107 permits the health center to
use Federal award funds to reimburse board members for these limited purposes: 1) reasonable expenses actually
incurred by reason of their participation in board activities (e.g., transportation to board meetings, childcare during
board meetings); or 2) wages lost by reason of participation in the activities of such board members if the member
The project
Health Center Program Compliance Manual
79
is from a family with an annual family income less than $10,000 or if the member is a single person with an annual
income less than $7,000. For section 330(g)-only awarded/designated health centers, 42 CFR 56.108 permits the
use of grant funds for certain limited reimbursement of board members as follows: 1) for reasonable expenses
actually incurred by reason of their participation in board activities (e.g., transportation to board meetings,
childcare during board meetings); 2) for wages lost by reason of participation in the activities of such board
members. Health centers may wish to consult with their legal counsel and auditor on applicable state law
regarding reimbursement restrictions for non-profit board members and implications for IRS tax-exempt status.
director [Chief Executive Officer (CEO)] may be a non-voting, ex-officio member of the
board.
• The health center bylaws or other internal governing rules must prescribe the process
for selection and removal of all governing board members. This selection process must
ensure that the governing board is representative of the health center patient
population. The selection process in the bylaws or other rules is subject to approval by
HRSA.
• In cases where a health center receives an award/designation under section 330(g),
330(h) and/or 330(i) and does not receive an award/designation under section 330(e), the
health center may request approval from HRSA for a waiver of the patient majority board
composition governance requirement by showing good cause.
Demonstrating Compliance
A health center would demonstrate compliance with these requirements by fulfilling all of the
following:
a. The health center has bylaws or other relevant documents that specify the process for
ongoing selection and removal of board members. This board member selection and
removal process does not permit any other entity, committee or individual (other than
the board) to select either the board chair or the majority of health center board
members,
7
including a majority of the non-patient board members.
8
7
An outside entity may only remove a board member who has been selected by that entity as an organizational
representative to the governing board.
8
For example, if the health center has an agreement with another organization, the agreement does not permit
that organization to select either the chair or a majority of the health center board.
b. The health center has bylaws or other relevant documents that require the board to be
composed as follows:
◦ Board size is at least 9 and no more than 25 members,
9
with either a specific
number or a range of board members prescribed;
9
For the purposes of the Health Center Program, the term “board member” refers only to voting members of the
board.
◦ At least 51 percent of board members are patients
served by the health center.
For the purposes of board composition, a patient is an individual who has
received at least one service in the past 24 months that generated a health
Health Center Program Compliance Manual
80
center visit, where both the service and the site where the service was received
are within the HRSA-approved scope of project;
◦ Patient members of the board, as a group, represent the individuals who are
served by the health center in terms of demographic factors, such as race,
ethnicity, and gender;
◦ Non-patient members are representative of the community served by the health
center or the health center’s service area;
◦ Non-patient members are selected to provide relevant expertise and skills such
as:
• Community affairs;
• Local government;
• Finance and banking;
• Legal affairs;
• Trade unions and other commercial and industrial concerns; and
• Social services;
◦ No more than one-half of non-patient board members derive more than 10
percent of their annual income from the health care industry; and
◦ Health center employees,
10,11
and immediate family members (i.e., spouses,
children, parents, or siblings through blood, adoption, or marriage) of employees
may not be health center board members.
10
For the purposes of health center board composition, an employee of the health center would include an
individual who would be considered a “common-law employee” or “statutory employee” according to the Internal
Revenue Service criteria, as well as an individual who would be considered an employee for state or local law
purposes.
11
In the case of public agencies with co-applicant boards, this includes employees or immediate family members of
both the co-applicant organization and the public agency component (for example, department, division, or sub-
agency) in which the Health Center Program project is located.
c. The health center has documentation that the board is composed of:
◦ At least 9 and no more than 25 members;
◦ A patient
12
majority (at least 51 percent);
12
A legal guardian of a patient who is a dependent child or adult, a person who has legal authority to make health
care decisions on behalf of a patient, or a legal sponsor of an immigrant patient may also be considered a patient
of the health center for purposes of board representation. Students who are health center patients may
participate as board members subject to state laws applicable to such non-profit board members.
◦ Patient board members, as a group, represent the individuals who are served by
the health center in terms of demographic factors, such as race, ethnicity, and
gender, consistent with the demographics reported in the health center’s
Uniform Data System (UDS) report;
13
13
For health centers that have not yet made a Uniform Data System (UDS) report, this would be assessed based on
demographic data included in the health center’s application.
Health Center Program Compliance Manual
81
◦ Representative(s) from or for each of the special population(s)
14
for those health
centers that receive any award/designation under one or more of the special
populations section 330 subparts, 330(g), (h), and/or (i);
14
Representation could include advocates for the health center’s section 330 (g), (h), or (i) patient population (for
example, those who have personally experienced being a member of, have expertise about, or work closely with
the current special population). Such advocate board members would count as “patient” board members only if
they meet the patient definition set forth in this chapter.
and
◦ As applicable, non-patient board members:
• Who are representative of the community in which the health center is
located, either by living or working in the community, or by having a
demonstrable connection to the community;
• With relevant skills and expertise in areas such as community affairs,
local government, finance and banking, legal affairs, trade unions, other
commercial and industrial concerns, or social services within the
community; and
• Of whom no more than 50 percent earn more than 10 percent of their
annual income from the health care industry.
15
15
For example, in a 9 member board with 5 patient board members, there could be 4 non-patient board members.
In this case, no more than 2 non-patient board members could earn more than 10 percent of their income from
the health care industry.
d. The health center verifies periodically (for example, annually or during the selection or
renewal of board member terms) that the governing board does not include members
who are current employees of the health center, or immediate family members of
current health center employees (i.e., spouses, children, parents, or siblings through
blood, adoption, or marriage).
e. In cases where a health center receives an award/designation under section 330(g),
330(h) and/or 330(i), does not receive an award/designation under section 330(e), and
requests a waiver of the patient majority board composition requirements, the health
center presents to HRSA for review and approval:
◦ “Good cause” that justifies the need for the waiver by documenting:
• The unique characteristics of the population (homeless, migratory or
seasonal agricultural worker, and/or public housing patient population)
or service area that create an undue hardship in recruiting a patient
majority; and
• Its attempt(s) to recruit a majority of special population board members
within the past three years; and
◦ Strategies that will ensure patient participation and input in the direction and
ongoing governance of the organization by addressing the following elements:
• Collection and documentation of input from the special population(s);
• Communication of special population input directly to the health center
governing board; and
Health Center Program Compliance Manual
82
• Incorporation of special population input into key areas, including but not
limited to: selecting health center services;
16
setting hours of operation of
health center sites;
17
defining budget priorities;
18
evaluating the
organization’s progress in meeting goals, including patient satisfaction;
19
and assessing the effectiveness of the sliding fee discount program.
20
16
See Chapter 4: Required and Additional Health Services for more information on providing services within the
HRSA-approved scope of project.
17
See Chapter 6: Accessible Locations and Hours of Operation for more information on health center service sites
and hours of operation.
18
See Chapter 17: Budget for more information on the Health Center Program project budget.
19
See Chapter 19: Board Authority for more information on the health center board’s required authorities.
20
See Chapter 9: Sliding Fee Discount Program for more information on requirements for health center sliding fee
discount programs.
f. For health centers with approved waivers, the health center has board minutes or other
documentation that demonstrates how special population patient input is utilized in
making governing board decisions in key areas, including but not limited to: selecting
health center services;
setting hours of operation of health center sites; defining budget
priorities; evaluating the organization’s progress in meeting goals, including patient
satisfaction; and assessing the effectiveness of the sliding fee discount program.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• Within the range of 9 to 25 board members, the health center determines the
appropriate board size for its organization.
• In addition to race, ethnicity, and gender, the health center determines other relevant
demographic or geographic factors to consider when selecting patient or non-patient
board members.
• In cases where language or literacy may present a barrier to board members’ evaluation
of written materials, the health center determines how to make accommodations to
ensure the meaningful participation of such board members.
• The health center board determines whether to include non-voting, ex-officio members
including, for example, the Project Director/CEO, other health center staff members, or
community members on the board, consistent with what is permitted under other
applicable laws.
Health Center Program Compliance Manual
83
• The health center determines within its policies how to define “health care industry” for
purposes of board composition and how to determine the percentage of annual income
of each non-patient board member derived from the health care industry.
• For health centers with a HRSA-approved waiver, the health center board determines
which strategies
21
to use for receiving input from the special population and ensuring
the special population’s participation in the direction and ongoing governance of the
health center.
21
For example, a health center could utilize an advisory council of special population representatives, could
conduct regular focus groups with the special population, or could have one or more patients from the special
population serving on the board.
Health Center Program Compliance Manual
84
Chapter 21: Federal Tort Claims Act (FTCA) Deeming Requirements
Authority
Section 224(g)-(n), 224(q) of the PHS Act (42 U.S.C. 233(g)-(n) and (q)); and 42 CFR Part 6
Requirements
In order to obtain deemed Public Health Service employment status under sections 224(g)-(n)
of the PHS Act
1
for themselves and for their “covered individuals,”
2
Health Center Program
awardees and subrecipients (including those defined as subrecipients under the Health Center
FTCA Medical Malpractice Program regulations),
3
hereafter referred to as a “health center” in
this chapter, must submit for approval by HRSA an annual deeming application that
demonstrates the health center:
1
The text of section 224 of the PHS Act may be found at: 42 USC 233: Civil actions or proceedings against
commissioned officers or employees.
2
“Covered individuals” is defined by the FTCA Health Center Policy Manual to mean “governing board members,
officers, employees, and certain individual contractors.” The term does not include volunteer health professionals
of deemed health centers, who may be deemed as PHS employees under section 224(q), and as to whom an
individual deeming application is required.
3
Subrecipient, as used in this chapter means, as described in 42 CFR 6.2, an entity that receives a Federal award or
a contract from a covered entity to provide a full range of health services on behalf of the covered entity. Covered
entity means an entity as described in 42 CFR 6.3 which has been deemed by the Secretary, in accordance with 42
CFR 6.5, to be covered by 42 CFR Part 6.
• Has implemented appropriate policies and procedures to reduce the risk of malpractice
and the risk of lawsuits arising out of any health or health-related functions performed
by the health center;
• Has reviewed and verified the professional credentials, references, claims history,
fitness, professional review organization findings, and license status of its physicians and
other licensed or certified health care practitioners;
• Has no history of claims under section 224 of the PHS Act or, if such a history exists, fully
cooperates with the Attorney General in defending against any such claims, and takes
any necessary steps to assure against such claims in the future; and
• Will fully cooperate with the Attorney General and other applicable agencies in
providing required information under section 224 of the PHS Act.
Note: A health center’s deemed employment status
4
does not imply FTCA coverage in all cases,
as health center providers must also comply with statutory individual eligibility requirements,
4
Deemed employment status extends to covered individuals based on evidence of their relationship with the
covered entity (i.e., officer, governing board member, health center employee, qualified individual contractor, or
volunteer health professional), pursuant to section 224(g)-(n) and (q) of the PHS Act, and 42 CFR Part 6. Volunteer
health professionals may receive deemed employment status based on individual applications by the sponsoring,
Health Center Program Compliance Manual
85
and covered actions must be taken within the scope of deemed PHS employment.
deemed health center. Whether a specific activity is covered by the FTCA will also require a determination or
certification that the activities at issue occurred within the scope of deemed PHS employment.
When FTCA
matters become the subject of litigation, the U.S. Department of Justice and the Federal courts
may assume significant roles in certifying or determining whether or not a given activity falls
within the scope of employment for purposes of FTCA coverage. For more information, review
the FTCA Health Center Policy Manual.
Demonstrating Compliance
A health center would demonstrate compliance with the FTCA requirements by providing
documentation in its annual deeming application, in the form and manner prescribed by
HRSA, and consistent with (but not necessarily limited to) the following:
Credentialing and Privileging / Quality Improvement and Quality Assurance
a. The health center is currently compliant with all of the credentialing and privileging
requirements of Chapter 5: Clinical Staffing and all requirements within Chapter 10:
Quality Improvement/Assurance prior to the deeming determination.
Risk Management
a. The health center has and currently implements an ongoing health care risk
management program to reduce the risk of adverse outcomes that could result in
medical malpractice or other health or health-related litigation and that requires the
following:
◦ Risk management across the full range of health center health care activities;
◦ Health care risk management training for health center staff;
◦ Completion of quarterly risk management assessments by the health center; and
◦ Annual reporting to the health center board which includes: completed risk
management activities; status of the health center’s performance relative to
established risk management goals; and proposed risk management activities
that relate and/or respond to identified areas of high organizational risk.
b. The health center has risk management procedures that address the following areas for
health center services and operations:
◦ Identifying and mitigating the health care areas/activities of highest risk within
the health center’s HRSA-approved scope of project, including but not limited to
tracking referrals, diagnostics, and hospital admissions ordered by health center
providers;
◦ Documenting, analyzing, and addressing clinically-related complaints and “near
misses” reported by health center employees, patients, and other individuals;
◦ Setting and tracking progress related to annual risk management goals;
Health Center Program Compliance Manual
86
◦ Developing and implementing an annual health care risk management training
plan for all staff members based on identified areas/activities of highest clinical
risk for the health center (including, but not limited to, obstetrical procedures
and infection control) and any non-clinical trainings appropriate for health
center staff (including HIPAA medical record confidentiality requirements); and
◦ Completing an annual risk management report for the board and key
management staff.
c. The health center provides reports to the board and key management staff on health
care risk management activities and progress in meeting goals at least annually, and
provides documentation to the board and key management staff showing that any
related follow-up actions have been implemented.
d. The health center has a health care risk management training plan for all staff members
and documentation showing that such trainings have been completed by the
appropriate staff, including all clinical staff, at least annually.
e. The health center designates an individual(s) (for example, a risk manager) who
oversees and coordinates the health center’s health care risk management activities and
completes risk management training annually.
Claims Management
a. The health center has a claims management process for addressing any potential or
actual health or health-related claims, including medical malpractice claims, that may be
eligible for FTCA coverage. In addition, this process ensures:
◦ The preservation of all health center documentation related to any actual or
potential claim or complaint (for example, medical records and associated
laboratory and x-ray results, billing records, employment records of all involved
clinical providers, clinic operating procedures); and
◦ Any service-of-process/summons that the health center or its provider(s)
receives relating to any alleged claim or complaint is promptly sent to the HHS
Office of the General Counsel, General Law Division, per the process prescribed
by HHS and as further described in the FTCA Health Center Policy Manual.
b. The health center has a designated individual(s) who is responsible for the management
and processing of claims-related activities and serves as the claims point of contact.
Health Center Program Compliance Manual
87
c. The health center informs patients using plain language that it is a deemed Federal PHS
employee
5
via its website, promotional materials, and/or within an area(s) of the health
center that is visible to patients.
5
For example: “This health center receives HHS funding and has Federal Public Health Service (PHS) deemed status
with respect to certain health or health-related claims, including medical malpractice claims, for itself and its
covered individuals.” For more information, see Federal Tort Claims Act (FTCA) website
.
d. If a history of claims under the FTCA exists, the health center can document that it:
◦ Cooperated with the Attorney General, as further described in the FTCA Health
Center Policy Manual; and
◦ Implemented steps to mitigate the risk of such claims in the future.
Related Considerations
The following points describe areas where health centers have discretion with respect to
decision-making or that may be useful for health centers to consider when implementing these
requirements:
• The health center determines how to obtain its health care risk management training
(for example, through one of HRSA’s national cooperative agreements or technical
assistance contracts) and which trainings to require for covered individuals and the
individual(s) designated with risk management responsibilities (for example, risk
manager).
• The health center determines what other types of liability coverage to obtain, such as
private “gap” or “tail” insurance, directors and officer insurance, and general liability
insurance, for activities that may not be eligible for FTCA coverage.
• The health center determines how to conduct and document the completion of
quarterly risk management assessments.
• With the exception of health centers that use volunteer health professionals, as to
which requirements are prescribed by law,
6
the health center determines how to inform
patients that it is a deemed Federal Public Health Service employee.
6
Section 224(q)(2)(D) of the PHS Act.
Health Center Program Compliance Manual
88
Appendix A: Health Center Program Non-Regulatory Policy Issuances That
Remain in Effect
The following policy issuances most often referred to as Policy Information Notices (PINs)
remain in effect and are not superseded by the Health Center Program Compliance Manual:
PIN 2007-09 Service Area Overlap: Policy and Process
PIN 2008-01 Defining Scope of Project and Policy for Requesting Changes
PIN 2009-02 Specialty Services and Health Centers’ Scope of Project
PIN 2009-05 Policy for Special Population-Only Grantees Requesting a Change in Scope to
Add a New Target Population
The following HRSA/BPHC policy documents and resources also remain in effect and are not
superseded by the Health Center Program Compliance Manual:
Federal Tort Claims Act Health Center Policy Manual
Additional Scope of Project/Change in Scope Resources
Site Visit Resources
Uniform Data System (UDS) Resources
Health Center Program Compliance Manual
89
Glossary
Note: This chapter contains revisions based on the Bipartisan Budget Act of 2018. View the
revisions.
330(g) Migratory and Seasonal Agricultural Worker (MSAW): For the purposes of health
centers receiving a Health Center Program award or designation under section 330(g) of the
Public Health Service Act, the population served includes:
• Migratory agricultural workers who are individuals whose principal employment is in
agriculture, and who have been so employed within the last 24 months, and who
establish for the purposes of such employment a temporary abode;
• Seasonal agricultural workers who are individuals whose principal employment is in
agriculture on a seasonal basis and who do not meet the definition of a migratory
agricultural worker;
• Individuals who are no longer employed in migratory or seasonal agriculture because of
age or disability who are within such catchment area; and/or
• Family members of the individuals described above.
Agriculture refers to farming in all its branches, as defined by the North American Industry
Classification System under codes 111, 112, 1151, and 1152.
(Section 330(g) of the PHS Act)
330(h) Homeless Population: For the purposes of health centers receiving a Health Center
Program award or designation under section 330(h) of the Public Health Service Act, the
population served includes individuals:
• Who lack housing (without regard to whether the individual is a member of a family);
• Whose primary residence during the night is a supervised public or private facility that
provides temporary living accommodations;
• Who reside in transitional housing; and/or
• Who reside in permanent supportive housing or other housing programs that are
targeted to homeless populations.
Under section 330(h) a health center may continue to provide services for up to 12 months
to formerly homeless individuals whom the health center has previously served but are no
longer homeless as a result of becoming a resident in permanent housing and may also
serve children and youth at risk of homelessness, homeless veterans, and veterans at risk of
homelessness.
(Section 330(h) of the PHS Act)
330(i) Residents of Public Housing: For the purpose of health centers receiving a Health Center
Program award or designation under section 330(i) of the Public Health Service Act, the
population served includes residents of public housing and individuals living in areas
immediately accessible to public housing. Public housing includes public housing agency-
developed, owned or assisted low-income housing, including mixed finance projects, but
Health Center Program Compliance Manual
90
excludes housing units with no public housing agency support other than Section 8 housing
vouchers. (Section 330(i) of the PHS Act)
Additional Services (Additional Health Services): Services that are not included as required
primary health services and that may be offered as appropriate to meet the health needs of the
population served by the health center. (Section 330(b)(2) of the Public Health Service Act)
Awardee (award recipient): Formerly referred to as “grantee.” A public or nonprofit non-
Federal organization that carries out the Federal award under the Health Center Program as a
recipient or subrecipient. (45 CFR 75.2)
Co-Applicant: For public agency health centers only. The established body that serves as a
public center’s governing board when the public agency determines that it cannot meet the
Health Center Program governing board requirements directly. (Section 330(r)(2)(A) of the
Public Health Service Act)
Contract: A contract is used for the purpose of obtaining goods and services needed to carry
out the project or program under a Federal award. It does not include a legal instrument, even
if the health center considers it a contract, when the substance of the transaction meets the
definition of a Federal award or subaward. Characteristics of a contract are when the
contractor:
(1) Provides the goods and services within normal business operations;
(2) Provides similar goods or services to many different purchasers;
(3) Normally operates in a competitive environment;
(4) Provides goods or services that are ancillary to the operation of the Federal program;
and
(5) Is not subject to compliance requirements of the Federal program as a result of the
relationship (although similar requirements may apply for other reasons, including as a
result of contractual provisions).
(45 CFR 75.2 and 45 CFR 75.351)
Credentialing: The process of assessing and confirming the license or certification, education,
training, and other qualifications of a licensed or certified health care practitioner.
EHB: HRSA’s Electronic Handbooks: HRSA’s Web-based grants interface, used for all Health
Center Program award or designation management activities.
Federal award (award, Federal grant): The Federal financial assistance that a non-Federal
entity receives directly from a Federal awarding agency, such as HRSA, or indirectly from a pass-
through entity. For the purposes of the Compliance Manual (unless specified differently), this
refers to Federal award funding under section 330 of the Public Health Service Act or the
“Health Center Program award.” (45 CFR 75.2)
Federal Poverty Guidelines (FPG): The Federal Poverty Guidelines (FPG) are a simplification of
Health Center Program Compliance Manual
91
the poverty thresholds, which are updated each year by the Census Bureau, and are used for
administrative purposes — for instance, determining financial eligibility for certain Federal
programs. The guidelines reflect annual income levels below which a person or family is
considered to be living in poverty, and the amounts increase according to the size of the family.
The guidelines are updated annually by HHS in the Federal Register. (HHS Poverty Guidelines)
Federally Qualified Health Center (FQHC): A Medicare/Medicaid designation administered by
CMS. Eligible organizations include organizations receiving grants under section 330 of the PHS
Act, look-alikes, and certain tribal organizations. (Section 1861(aa)(4)(B) and section
1905(l)(2)(B) of the SSA)
Fitness for duty Formerly referred to as “health fitness”: Fitness for duty, for purposes of this
Compliance Manual, means the ability to perform the duties of the job in a safe, secure,
productive, and effective manner.
Form 5A: Services Provided: Official documentation of the required and additional health
services (See Chapter 4: Required and Additional Health Services) included in a health center’s
HRSA-approved scope of project, and their corresponding mode(s) of service delivery. This form
is contained in the health center’s folder in EHB. (Scope of Project website)
Form 5B: Service Sites: Official documentation of the service delivery sites (see Service Site)
included in a health center’s HRSA-approved scope of project. This form is contained in the
health center’s folder in EHB. (Scope of Project website)
Limited English Proficiency (LEP): LEP persons include individuals who do not speak English as
their primary language and/or who have a limited ability to read, write, speak, or understand
English; and who may be eligible to receive language assistance with respect to the particular
service, benefit, or encounter. (HHS Office for Civil Rights)
Look-Alike: Organizations that do not receive a Health Center Program Federal award but are
designated by HRSA as meeting Health Center Program requirements. (Section 1861(aa)(4)(B)
and section 1905(l)(2)(B) of the SSA)
Non-Federal Entity: A State, local government, Indian tribe, institution of higher education
(IHE), or nonprofit organization that carries out a Federal award as a recipient or subrecipient.
(45 CFR 75.2)
Pass-Through Entity: A non-Federal entity that provides a subaward to a subrecipient to carry
out part of a Federal program. (45 CFR 75.2)
Primary Source Verification: Verification by the original source of a specific credential of the
accuracy of a qualification reported by an individual health care practitioner. Primary source
verification could include direct correspondence, telephone, fax, e-mail, or paper or online
reports received from original sources (for example, telephone confirmation from an
Health Center Program Compliance Manual
92
educational institution that the individual graduated with the degree[s] listed on his or her
application, confirmation through a state’s database that a provider’s license is current, reports
from credentials verification organizations).
Privileging: The process of authorizing a health care practitioner’s specific scope and content of
patient care services.
Required Services (Required Health Services): Required services are those services that a
health center must provide, as defined in Section 330(b)(1) of the Public Health Service Act.
(Section 330(a)(1) of the Public Health Service Act)
Scope of Project: Defines the service sites, services, providers, service area(s), and target
population included in the HRSA-approved Health Center Program project. (Policy Information
Notice 2008-01: Defining Scope of Project and Policy for Requesting Changes)
Service Area (also referred to as a “catchment area”): The precise boundaries, as defined by the
health center, of the geographic area to be served under the Health Center Program project,
including identified medically underserved population or populations within that area. (42 CFR
51c.102)
Service Site: Locations where a health center either directly or through a subrecipient or
contractual arrangement provides services and where all of the following conditions are met:
• Health center encounters are generated by documenting in the patients’ records face-
to-face contacts between patients and providers;
• Providers exercise independent judgment in the provision of services to the patient;
• Services are provided directly by or on behalf of the health center, whose governing
board retains control and authority over the provision of the services at the location;
and
• Services are provided on a regularly scheduled basis. (Policy Information Notice 2008-
01: Defining Scope of Project and Policy for Requesting Changes)
Special Population [Special Medically Underserved Population]: HRSA may award funding or
designation under sections 330(g), (h), or (i) of the PHS Act for the delivery of services to a
special medically underserved population. See definitions for 330(g) Migratory and seasonal
agricultural workers; 330(h) Homeless individuals; and 330(i) Residents of public housing.
Subaward: An award provided by a pass-through entity to a subrecipient for the subrecipient to
carry out part of a Federal award received by the pass-through entity. It does not include
payments to a contractor or payments to an individual that is a beneficiary of a Federal
program. A subaward may be provided through any form of legal agreement, including an
agreement that the pass-through entity considers a contract. See also “Pass-Through Entity.”
(45 CFR 75.2)
Subrecipient: Per 45 CFR 75.2, a non-Federal entity that receives a subaward from a pass-
Health Center Program Compliance Manual
93
through entity to carry out part of a Federal program but does not include an individual that is a
beneficiary of such program. A subrecipient may also be a recipient of other Federal awards
directly from a Federal awarding agency.
Characteristics which would lend support to the classification of the non-Federal entity as a
subrecipient include when the non-Federal entity:
(1) Determines who is eligible to receive what Federal assistance;
(2) Has its performance measured in relation to whether objectives of a Federal program
were met;
(3) Has responsibility for programmatic decision making;
(4) Is responsible for adherence to applicable Federal program requirements specified in
the Federal award; and
(5) In accordance with its agreement, uses the Federal funds to carry out a program for a
public purpose specified in authorizing statute, as opposed to providing goods or
services for the benefit of the pass-through entity. (45 CFR 75.2)
Uniform Data System (UDS): The UDS is a core set of information appropriate for reviewing the
operation and performance of health centers. The UDS annually collects a variety of
information, including patient demographics, services provided, staffing, clinical indicators,
utilization rates, costs, and revenues. (Uniform Data System (UDS) Resources)
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (45 CFR Part 75): Sometimes referred to as the “HHS grant regulations.” Final
requirements for Federal awards to non-Federal entities located in Title 2 of the Code of
Federal Regulations as adopted by HHS at 45 CFR Part 75. These requirements supersede and
streamline requirements from previous OMB Circulars A-21, A-87, A-110, and A-122 ; Circulars
A-89, A-102, and A-133; and the guidance in Circular A-50 on Single Audit Act follow-up. (45 CFR
Part 75)
Volunteer Health Professional (VHP): For the purposes of being deemed as PHS employees for
the purposes of liability protections under section 224(q) of the PHS Act, a health care
practitioner shall be considered to be a volunteer health professional at a deemed health
center if the following conditions are met:
(1) The service is provided to patients at the sponsoring health center facilities or through
offsite programs or events carried out by the sponsoring health center;
(2)
The deemed health center is sponsoring the health care practitioner;
(3)
The health care practitioner does not receive any compensation for the service from the
patient, the sponsoring health center, or any third-party payer (including
reimbursement under any insurance policy, health plan, or Federal or state health
benefits program). However, the health care practitioner may receive repayment from
the health center for reasonable expenses incurred in providing the service to the
patient;
(4)
Before the service is provided, the health care practitioner or the deemed health center
posts a clear and conspicuous notice at the site where the service is provided of the
Health Center Program Compliance Manual
94
extent to which the legal liability of the health care practitioner is limited pursuant to
subsection 224(q);
(5)
At the time service is provided, the VHP is licensed or certified in accordance with
applicable Federal and state laws regarding the provision of the service; and
(6)
The sponsoring health center must maintain all relevant documentation certifying that
the VHP meets the requirements to be considered a volunteer.
(Section 224(q) of the PHS Act)
