From Policy to Practice: How FQHCs can Adapt to FY 2026 Federal Grant Updates
If you manage or write grants for a Federally Qualified Health Center (FQHC), you already know that federal compliance can feel like a moving target. But FY 2025 and FY 2026 bring some especially important shifts that will directly impact how you apply for, manage, and close out federal grants, including your Service Area Competition (SAC) and other HRSA awards.
Here’s what’s changing, why it matters, and what you should do now to stay ahead.
1. FY 2025: Supplemental Awards Rolled into Base Grants
In a major shift, supplemental awards under separate activity codes have been rolled into base awards. This change is designed to reduce reporting burden and streamline grant management.
What’s New:
Progress on supplemental grants will now be reported on through SACs, BPRs, and NCCs
New terms were added to each award (more on this below in #2)
Each awardee should have received a unique email detailing their balance of funds
Why It Matters:
This consolidation simplifies reporting but also requires close attention to new terms and conditions. You’ll need to ensure your internal tracking and report narratives reflect the merged structure.
What You Should Do:
Review your Notice of Award and new terms
Confirm your fund balances and reporting timelines
Adjust your internal grant tracking systems to reflect the merged structure
2. Revised Federal Award Terms
As of July 2025, HRSA has adopted new General Terms and Conditions for FY 2025 and beyond. These reflect broader federal updates and HRSA-specific priorities.
What’s New:
Added new section 1.j Antidiscrimination Laws and Requirements Compliance Certification related to definitions of biological sex and antidiscrimination laws
Full adoption of 2 CFR Part 200 and 2 CFR Part 300
Rescission of 45 CFR Part 75
Why It Matters:
These terms affect your eligibility, compliance, and risk exposure. The termination clause, for example, underscores the need for strong performance and documentation throughout the grant lifecycle.
What You Should Do:
Review your Notice of Award carefully
Stay alert to future changes to terms and conditions
Document performance and compliance proactively
3. Updated HHS Grants Policy Statement (Effective October 1, 2025)
The HHS Grants Policy Statement (GPS) has been updated and will go into effect on October 1, 2025. This version supersedes all previous versions. It aligns with 2 CFR Part 200 and introduces several key changes:
What’s New:
Micro-purchase threshold raised to $50,000
Equipment/Supplies threshold now $10,000
Fixed amount subawards allowed up to $500,000 (with prior approval)
De minimis indirect cost rate increased to 15%
Single audit threshold raised to $1 million
Closeout window extended to 120 days
Title IX certification now required in Civil Rights Assurances
No-cost extensions must be requested at least 10 days before the end of the budget period
An award may be terminated if it no longer effectuates the program goals or agency priorities
Why It Matters:
These changes affect how you budget, procure, and report. For example, the higher micro-purchase threshold may simplify procurement, but the new audit and closeout rules mean tighter internal controls and documentation.
What You Should Do:
Update your procurement and financial policies
Train your team on new thresholds and documentation
Stay alert to future changes to the Grants Policy Statement
Plan ahead for closeout and extension requests
4. HRSA’s MAHA Priorities
HHS’s and HRSA’s Make America Healthy Again (MAHA) initiative is reshaping funding priorities. The focus is shifting from reactive care and addressing disparities to preventive, individualized health strategies.
What’s New:
Emphasis on chronic disease prevention and management, mental health, obesity, nutrition, environmental toxins, and overreliance on medical interventions
De-prioritization of work that addresses health disparities, LGBTQ+ health, DEI activities, and housing first as a strategy to address homelessness
Why It Matters:
Your SAC and other HRSA applications will be stronger and more compliant if they reflect MAHA priorities. Programs that address chronic disease, mental health, and preventive care are more likely to be funded.
What You Should Do:
Align your program designs with MAHA goals and become familiar with what HRSA will prioritize and deprioritize when awarding grants
Incorporate preventive health, chronic disease management, nutrition, health education, and lifestyle interventions into your proposals
Redesign housing, homelessness, and substance use disorder programs to ensure they do not contradict HRSA’s priorities
Learn about your state’s policies that have been adopted to align with MAHA priorities
5. Funding Outlook: What to Expect in FY 2026
While funding for FQHCs remains stable, there is no additional funding available for New Access Points (NAPs), service expansions, or base adjustments.
In FY 2026, HRSA will continue to administer Service Area Competition grants and TA partner awards. Funding will possibly be available for one-time Quality Improvement (QI) awards.
Why It Matters:
FQHCs should focus on maintaining strong performance and aligning with HRSA priorities to remain competitive and compliant for available funding.
What You Should Do:
Prepare early for your SAC application
Watch for QI funding announcements
Final Thoughts: What This Means for Your Grant Strategy
Federal grant policies are continuing to change at a rapid pace. To maintain your current HRSA award and be competitive for any new opportunities, it is critical to stay alert and informed of regulatory changes and proactively adjust your operations, program design, and priorities to align with federal expectations.
CLC is here to help no matter where you’re at in the process. We can walk you through the policy jargon, redesign a program to align with new priorities, support the full grants cycle, or facilitate your organization-wide strategic plan.
About the Author:
Shelby Maidl, MPH - Senior Consultant
Community Link Consulting
Phone: 509-226-1393
Email: shelbym@communitylinkconsulting.com
Shelby brings expertise in grants management, grant writing, program development and evaluation, quality improvement, and compliance, helping Federally Qualified Health Centers navigate complex regulatory changes and maximize their funding opportunities.
