Federally qualified health centers (FQHCs) are community-based health care providers that receive federal funds from the Health Resources & Services Administration to provide care in underserved areas. State Medicaid programs are required to cover services furnished by FQHCs.
This issue brief describes the role of FQHCs in Medicaid. It also discusses the policies used to set Medicaid payment rates for FQHCs, including the Medicaid FQHC prospective payment system, alternative payment methodologies, how FQHCs participate in managed care networks, and states’ desire for greater flexibility in setting FQHC payment rates.
