FQHC Federal Policy Changes for 2026: What You Need to Know Before December 30th
As we enter the final weeks of 2025, Federally Qualified Health Centers face a landscape of significant federal policy shifts that will fundamentally reshape operations, funding streams, and strategic priorities for 2026 and beyond. From the Make America Healthy Again (MAHA) initiative redirecting federal health priorities to major HHS restructuring and the Rural Health Transformation Program, FQHCs must understand these changes now to position themselves for success.
This isn't just about staying compliant; it's about understanding where federal dollars are flowing, what priorities will drive funding decisions, and how to strategically align your organization with the new policy environment. The health centers that thrive in 2026 will be those that recognized these shifts early and took decisive action in late 2025.
This comprehensive guide outlines the critical policy changes affecting FQHCs in 2026, provides clarity on what these changes mean for your operations, and delivers specific action steps to help you navigate this transition confidently.
The MAHA Shift: Understanding New Federal Health Priorities
What MAHA Means for Health Center Funding
The Make America Healthy Again (MAHA) initiative represents one of the most significant shifts in federal health policy priorities in decades. With $500 million in dedicated funding and HHS Secretary Kennedy given broad authority to set MAHA agenda priorities, this initiative is fundamentally reshaping what the federal government will fund and what it won't.
The FY 2026 Health Center Program Service Area Competition explicitly states that funding is "in alignment with the President's Make American Healthy Again (MAHA) priorities," emphasizing support for health centers that prevent and manage chronic illness and disease. The emphasis has shifted from addressing health disparities and social determinants to focusing on chronic disease prevention, nutrition, reducing medication overreliance, and environmental health impacts.
Key MAHA Priority Areas That Will Drive Funding:
Prevention and management of chronic conditions (diabetes, hypertension, obesity)
Nutrition and healthy lifestyles
Reducing overreliance on medication and treatments
Mental health and substance use disorder services
Environmental health impacts and toxin exposure
Physical activity promotion
De-Emphasized Areas:
Health disparities and equity-focused initiatives
LGBTQ+ health programs
Diversity, equity, and inclusion (DEI) activities
Housing-first strategies for addressing homelessness
For FQHCs, this means grant applications, service expansions, and quality improvement initiatives need to emphasize chronic disease management, preventive care, and the priority areas outlined above. Language around health equity, while still important to your mission, is no longer the primary lens through which federal reviewers will evaluate applications.
Actions for Health Centers:
Review and new or pending federal grant applications and proposals to demonstrate alignment with MAHA priorities
Emphasize chronic disease prevention and management metrics in quality reporting
Document how your services support nutrition, physical activity, and reducing medication overuse
Train grant writers and program staff on new priority language and focus areas
Update strategic plans to reflect MAHA-aligned initiatives while maintaining your mission
Major HHS Reorganization: From HRSA to the Administration for a Healthy America (AHA)
Understanding the Structural Changes
The federal government is in the midst of one of the most significant health agency reorganizations in modern history. HRSA is being consolidated into a new entity called the Administration for a Healthy America (AHA), along with SAMHSA, Office of the Assistant Secretary for Health (OASH), parts of CDC, and parts of NIH.
The FY2026 budget proposes $20.6 billion for AHA ($14.1 billion discretionary, $6.4 billion mandatory), consolidating chronic care and disease prevention programs across multiple agencies. While health center funding is proposed to remain relatively stable at approximately $6 billion for priority activities, the organizational structure through which you access this funding is changing dramatically.
What This Reorganization Means:
New organizational structures and reporting lines
Different grant application processes and review criteria
Consolidated programs that were previously managed separately
New contact points for technical assistance and program support
Critical Impact: 340B Drug Pricing Program Transfer
One of the most significant changes for FQHCs is the proposed transfer of the 340B Drug Pricing Program from HRSA to CMS. While the program will receive level funding ($12 million), this administrative shift could mean:
Different compliance oversight and audit procedures
New reporting requirements and systems
Revised guidance on program eligibility and participation
Potential changes to covered entity verification processes
Actions for Health Centers:
Monitor official announcements regarding AHA implementation timelines
Identify new organizational contacts as transition occurs
Document all communications during transition period in case of disputes
Review 340B program policies and practices to ensure full compliance with current rules
Attend technical assistance sessions on organizational changes
FY 2026 Funding Reality: What to Expect and Plan For
No Growth Funding: Understanding the Financial Landscape
According to reports from the National Association of Community Health Centers (NACHC), FQHCs should expect flat federal funding for FY 2026 which means no increases from FY 2025 levels. More significantly, there will very likely be no funding for:
New Access Points (NAPs)
Service area expansions
Base adjustment increases
This represents a significant constraint for health centers planning growth initiatives. Combined with proposed cuts to various maternal and child health programs ($274 million reduction) and workforce programs ($1 billion reduction) that have historically supported health centers, the financial environment requires careful planning.
Stable Funding Areas:
Core Section 330 health center funding (approximately $6 billion)
Service Area Competition grants (for existing service areas)
Ryan White HIV/AIDS programs ($2.3 billion, now under AHA)
Substance use disorder and mental health services (aligned with MAHA priorities)
Actions for Health Centers:
Model 2026 budgets assuming flat federal funding with no growth
Identify operational efficiencies to maintain services without expansion funding
Explore alternative revenue streams (value-based contracts, state grants, foundation funding)
Defer expansion plans that depend on NAP funding
Strengthen revenue cycle management to maximize existing funding sources
Consider Rural Health Transformation Program opportunities (detailed below)
HRSA Systems Transition: Preparing for Change
Electronic Handbook (EHB) to GrantSolutions Migration
HRSA has begun transitioning core grants lifecycle functions from the Electronic Handbook (EHB) to GrantSolutions, affecting how grants are submitted, reviewed, awarded, and managed. This transition was delayed in September but is still planned to take place throughout 2026, while HRSA operates with significant staffing reductions.
What This Means:
Potential processing delays for grant applications and modifications
Learning curve for new system functionality
Possible loss of institutional knowledge due to staffing cuts
For more information on GrantSolutions: https://grantsolutions.gov/gs/
Actions for Health Centers:
Identify and train key staff who use EHB on the new GrantSolutions platform
Track the system transition milestones to avoid missing important submissions
Document all system issues and maintain backup copies and screenshots of submissions
Build extra lead time into future federal grant-related deadlines
Rural Health Transformation Program (RHTP): The Waiting Game
All 50 States Have Applied. Now We Wait
While general FQHC funding faces constraints, the Rural Health Transformation Program represents a significant new funding opportunity: $50 billion over five years (FY 2026-2030). All 50 states submitted applications to CMS for RHTP funding, showing the shared desire across the country to support healthcare investment as Medicaid funding pathways shrink.
Current Status:
All 50 states have submitted RHTP applications
CMS must approve or deny applications by December 30, 2025
Approved states will receive funding beginning in FY 2026
Funding continues for all five years without annual reapplication
What This Means for FQHCs:
The universal state participation signals support for rural health transformation but also means competition within states for project funding will be significant. States submitted comprehensive transformation plans outlining how they will use funds for chronic disease prevention, workforce development, technology adoption, and healthcare delivery innovation.
For detailed information on RHTP structure, eligible activities, and strategic positioning, see our comprehensive guide: Rural Health Transformation: What It Is, What It Isn't, and How Federally Qualified Health Centers (FQHCs) Should Prepare.
Critical Actions While Awaiting CMS Decisions:
Stay connected with your Primary Care Association (PCA) to understand your state's submitted plan
Maintain relationships with state health department contacts involved in RHTP planning
Begin outlining project proposals that align with your state’s priorities (most can be found here) and be ready to activate once state awards are announced
Monitor CMS announcements expected by December 30, 2025
Prepare to move quickly once funding becomes available in early 2026
Compliance Essentials: Non-Negotiable Requirements
Staying Ahead of Federal Requirements
Even amid all these changes, basic compliance obligations remain non-negotiable. In fact, with federal scrutiny increasing and MAHA priorities demanding new documentation, compliance attention is more important than ever.
Ongoing Compliance Requirements:
Submit all required reports ON TIME: FFRs (Federal Financial Reports), SAC’s (Service Area Competition), BPRs (Budget Period Reports), RFI’s (Requests for Information), FTCA redeeming
Maintain accurate system access: EHB, GrantSolutions, PMS (Performance Management System), Sam.gov, Login.gov, ID.me, Grants.gov
Document system accessibility issues immediately for audit or appeal purposes
Maintain complete sliding fee discount program documentation
Keep UDS data current and accurate
Ensure board governance documentation is complete
Track corrective actions from prior audits or site visits
Maintain 340B program compliance and documentation
Actions for Health Centers:
Conduct internal compliance audit now, before year-end
Create a master calendar of all reporting deadlines for 2026
Assign backup staff for all critical compliance functions
Review and update compliance policies to reflect new priorities
Document all federal communications and guidance
Establish monthly compliance review meetings with leadership
Train staff on new reporting requirements as they emerge
Strategic Positioning for Success in 2026
From Reactive to Proactive: A Mindset Shift
The health centers that will thrive in 2026 won't be those that simply react to policy changes; they'll be the ones that anticipated these shifts and positioned themselves strategically well before implementation deadlines.
Five Strategic Priorities for Early 2026:
1. Demonstrate Alignment with MAHA Priorities:
Review and revise clinical quality and focus efforts to emphasize prevention and chronic disease management
Strengthen nutrition counseling and lifestyle intervention programs
2. Diversify Revenue Beyond Federal Grants:
Strengthen revenue cycle management to maximize collections
Pursue and/or optimize value-based care contracts with Medicaid and commercial payers
Increase efforts to seek state grants and private foundation funding
Invest in building relationships with new potential donors
Optimize 340B program savings
3. Invest in Workforce Stability:
Address burnout and retention proactively but within budget constraints
Develop clear career pathways and professional development opportunities
4. Leverage Technology Strategically:
Ensure EHR optimization for quality reporting and revenue capture
At a minimum, pilot AI scribing to improve provider satisfaction and productivity
Prepare for telehealth service delivery under restrictive policies
Invest in cybersecurity and system reliability
5. Engage in Active Advocacy:
Educate state legislators about FQHC value and community impact
Monitor and advocate for Medicare telehealth flexibility extensions (current flexibilities expire January 30, 2026)
Submit comments on federal policies that affect health centers
Conclusion: Navigating Complexity with Confidence
The federal policy changes facing FQHCs in 2026 are significant, but they're not insurmountable. Health centers have successfully navigated major policy shifts before, from the Affordable Care Act implementation to the COVID-19 pandemic response. The keys to success remain the same: early awareness, strategic planning, strong partnerships, and unwavering commitment to mission.
The FQHCs that will emerge strongest from this transition will be those that:
Understood these changes early and took decisive action
Aligned their operations with new federal priorities while maintaining their mission
Built financial resilience through diversified revenue and strong operations
Invested in their workforce and technology infrastructure
Engaged actively in state planning processes and advocacy
The landscape is changing, but the need for high-quality, accessible primary care in underserved communities is greater than ever. By navigating these changes strategically and maintaining your commitment to your patients and communities, your health center can not only survive this transition but emerge stronger and more sustainable.
How Community Link Consulting Can Help
Community Link Consulting specializes in helping FQHCs navigate complex federal policy transitions and position themselves for success amid changing priorities. Our team combines deep expertise in revenue cycle optimization, HRSA grants management, federal compliance requirements, and strategic planning to help health centers not just understand policy changes but leverage them for organizational benefit.
We can help you:
Strengthen financial management and revenue diversification strategies
Update policies and procedures for new compliance requirements
Prepare competitive applications for RHTP and other funding opportunities
Develop strategic plans that align federal priorities with your mission
Navigate the HRSA-to-AHA transition and system changes
Build workforce sustainability and retention programs
For comprehensive policy analysis, strategic planning support, and compliance guidance, contact us for a complimentary consultation. We're here to help.
Phone: 509-226-1393
Email: info@communitylinkconsulting.com
About the Author
Johanna Heller, Chief Operating Officer
Community Link Consulting
Phone: 509-226-1393
Email: johannah@communitylinkconsulting.com
Johanna brings a unique dual perspective to FQHC consulting, having spent over a decade working both alongside and within federally qualified health centers. After starting at Community Link Consulting, she earned her MBA in Healthcare Management from Gonzaga University and spent eight years as a Clinic Administrator at a large urban FQHC, where she navigated federal policy changes, managed compliance requirements, and led strategic positioning efforts. Now back at CLC as Chief Operating Officer, she helps health centers translate complex federal policy shifts into actionable operational strategies.
Sources and References:
1. Health Resources and Services Administration. (2025). *FY 2026 Health Center Program Service Area Competition Notice of Funding Opportunity* (HRSA-26-002). Retrieved from https://www.hrsa.gov/grants/find-funding/HRSA-26-002
2. U.S. Department of Health and Human Services. (2025). *Fiscal Year 2026 Budget in Brief: Administration for a Healthy America*. Retrieved from https://www.hhs.gov/about/budget/fy2026/index.html
3. Centers for Medicare & Medicaid Services. (2025). *Rural Health Transformation (RHT) Program*. Retrieved from https://www.cms.gov/priorities/innovation/innovation-models/rural-health-transformation
4. U.S. Department of Health and Human Services. (2025). *All 50 States Seek to Transform Rural Health with CMS*. Retrieved from https://www.hhs.gov/about/news/2025/09/30/all-50-states-seek-transform-rural-health-cms.html
5. Community Link Consulting. (2025). *Rural Health Transformation: What It Is, What It Isn't, and How Federally Qualified Health Centers (FQHCs) Should Prepare*. Retrieved from https://www.communitylinkconsulting.com/blog/rural-health-transformation-program-fqhc-guide
6. State Health and Value Strategies. (2025). *Tracking State Preparation for the Rural Health Transformation Program*. Retrieved from https://shvs.org
7. National Association of Community Health Centers. (2025). *FY 2026 Federal Budget Analysis for Health Centers*. Retrieved from https://www.nachc.org
8. Applied Policy. (2025). *White House Budget for 2026 Has MAHA Focus*. Retrieved from https://www.appliedpolicy.com/white-house-budget-for-2026-has-maha-focus
9. Health Resources and Services Administration. (2025). *Fiscal Year 2026 Budget Period Progress Report Instructions*. Retrieved from https://bphc.hrsa.gov/program-opportunities/reporting
