What’s the Difference Between a CHC and an FQHC?
Access to quality primary care is more important than ever—especially for underserved communities. But when you explore the world of safety-net healthcare providers, you’ll often see the terms “Community Health Center (CHC)” and “Federally Qualified Health Center (FQHC)” used interchangeably. Are they the same? Are there real differences? And why does it matter for your practice or organization?
In this blog, we’ll clarify what CHCs and FQHCs mean, highlight the key differences, explore how they impact reimbursement and patient care, and help you determine which designation might apply in different settings.
Understanding the Basics: CHC vs. FQHC
Before comparing the two, it’s important to understand what each type of health center represents and how they function within the healthcare safety-net system.
What is a Community Health Center (CHC)?
A CHC refers broadly to a community-based clinic that delivers primary care and other health services to populations facing barriers—including low income, uninsured, or living in medically underserved areas. These centers are typically mission-driven, non-profit or public entities focused on improving health equity and reducing gaps in access.
What is a Federally Qualified Health Center (FQHC)?
An FQHC is a specific legal designation given to certain clinics that meet federal criteria under the Health Resources & Services Administration (HRSA) Health Center Program. The “federally qualified” label means they’re eligible for enhanced reimbursement through Medicare/Medicaid, federal grants, and other benefits designed to support care for underserved populations.
Also Read: Top 20 Healthcare Common Procedure Coding System Codes.
Key Similarities: CHCs and FQHCs Share a Common Mission
Both types work to provide primary care regardless of ability to pay.
They focus on underserved populations, medically underserved areas (MUAs), or medically underserved populations (MUPs).
Both embrace a holistic approach—offering services like dental, behavioral health, enabling services (transportation, translation), and preventive care.
They aim to reduce costly emergency and hospital visits by improving access and continuity.
CHC vs. FQHC: Simple Comparison Table
| Category | CHC (Community Health Center) | FQHC (Federally Qualified Health Center) |
|---|---|---|
| What It Is | General term for community-based clinics. | Clinic with official federal “FQHC” status. |
| Federal Designation | No specific federal designation. | Recognized by HRSA under the Health Center Program. |
| Funding | State, local, grants, donations, limited federal support. | Eligible for Section 330 federal grants and added funding. |
| Medicare/Medicaid Pay | Standard reimbursement rates. | Enhanced cost-based reimbursement (PPS). |
| 340B Drug Program | Eligible only if meeting criteria. | Automatically eligible. |
| Required Services | Varies by clinic; no strict federal list. | Must offer primary care, behavioral, dental + enabling services. |
| Board Requirements | No federal board rules. | At least 51% of board members must be patients. |
| Where They Operate | Can be located anywhere. | Must serve a Medically Underserved Area/Population. |
| Sliding Fee Scale | Optional; based on funding. | Mandatory sliding fee discount program. |
| Reporting Requirements | Varies by funding source. | Must submit annual UDS reports to HRSA. |
| Look-Alike Option | Not applicable. | Look-Alikes meet requirements but don’t receive federal grants. |
Key Differences: Why the Distinction Matters
Here are the major differences between CHCs and FQHCs that affect operations, funding, and reimbursement.
1. Legal/Regulatory Designation
FQHC: Must meet specific federal requirements (e.g., Section 330 of the Public Health Service Act), consumer-majority board, operate in a MUA/MUP, offer sliding fee scale, etc.
CHC: More of a general term. Some CHCs have FQHC status, others may be “look-alikes” (meet criteria but don’t have all benefits) or simply local community clinics.
2. Funding & Reimbursement
FQHCs have access to enhanced benefits: cost-based reimbursement for Medicare/Medicaid, federal grant support (e.g., HRSA Section 330 grants), 340B drug pricing eligibility, etc.
CHCs without FQHC status may lack some of these benefits and therefore might operate under different financial models.
3. Scope of Services & Visit Types
FQHCs are required to deliver a comprehensive set of services (primary care, dental, behavioral health, enabling services). CHCs may deliver similar services but without the same mandated breadth.
The “look-alike” FQHC clinics meet the service standards and reimbursement criteria but may not receive the direct grant funding.
4. Governing Board and Community Input
For FQHC designation, at least 51% of the governing board must be patients of the health center or represent the service area. This ensures the clinic remains responsive to community needs.
CHCs may or may not have the same requirement.
Why This Difference Matters for Your Organization
Reimbursement strategies: Knowing if you are a true FQHC impacts how you invoice Medicare/Medicaid, what payment models apply, and what funding you can access. For more insight into billing efficiency and choosing the right place-of-service codes, check out this guide on top billing POS codes.
Grant eligibility: FQHC status unlocks federal grant programs, which can provide operational stability and expansion funds.
Contracting & partnerships: Payers, health systems, and governments often differentiate between FQHCs and other community clinics when negotiating value-based agreements or population health contracts.
Compliance & reporting: FQHCs are subject to specific HRSA reporting (Uniform Data System, UDS), which can affect funding and renewal eligibility.
Patient outreach & mission: Both models help underserved populations, but FQHCs may have deeper regulatory supports, making them more resilient in changing health policy environments.
How to Decide Which Model Fits You
Evaluate your mission and patient base: Are you serving uninsured/underinsured populations, in a MUA/MUP, offering primary care plus enabling services?
Check your legal status: Have you pursued HRSA Health Center Program awards or designated FQHC certification?
Review your reimbursement setup: Are you receiving cost-based Medicaid/Medicare payments, or standard fee-for-service?
Examine your board composition and governance: Do you meet the patient-majority board requirement?
Consider your service scope and infrastructure: Are you delivering comprehensive care (dental, behavior, enabling) like an FQHC requires?
Takeaway for Practices and Providers
Whether a clinic is labelled a CHC or an FQHC, both advance access to essential care for underserved communities. But from a billing, reimbursement and strategic perspective, recognizing the difference can position your organization for greater funding, better partnerships, and more sustainable operations.
If you’re managing or advising a clinic, make the distinction between CHC and FQHC early—and align your administrative, financial, and compliance processes accordingly.
FAQs: CHCs vs. FQHCs
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