FQHC Leaders: Preparing for Healthcare Policy Changes
There's significant movement in the healthcare policy landscape right now, but also considerable uncertainty, especially since July 4th when the One Big Beautiful Bill Act (OBBBA) was signed into law. More specifically, $50 billion in rural healthcare funding was approved but how this funding will be allocated down to the facility level is undefined. Federally Qualified Health Centers (FQHCs) and other safe net providers are navigating uncharted territory once again.
In this rapidly evolving environment, staying informed and adaptable is not optional—it’s essential for protecting organizational sustainability and preparing for what’s ahead. At Community Link Consulting, we work with clinics in over 40 states and stay closely connected to national conversations—here's what we're seeing and how leaders are responding.
What's Happening Now: Policy Developments and Industry Impact
Recent developments in healthcare policy are creating both opportunities and challenges for FQHCs. Here's what has emerged in recent weeks and what it means for FQHC funding 2025:
New Administration Policy Priorities: The current administration has signaled major shifts in healthcare policy, with proposals that could fundamentally impact FQHC funding 2025 and beyond. Key areas of focus include:
Medicaid Restructuring: Changes include per-capita caps, federal matching adjustments for ACA expansion states, work requirements, more frequent eligibility checks for enrollees, and coverage restrictions that could affect patient eligibility and revenue streams.
Rural Healthcare Investment: A historic $50 billion allocation for rural healthcare represents the largest federal investment in rural health infrastructure in decades, with FQHCs positioned as key beneficiaries.
Enhanced Federal Matching Concerns: States with Medicaid expansion currently receive 90% federal matching rates. Proposed reductions could force states to find alternative funding, potentially affecting FQHC reimbursement rates.
Rescission of 1998 Policy Allowing Services for “Non-Qualified Aliens”: HHS has rescinded the interpretation of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), a long-standing policy that permitted Community Health Centers to provide care to “non-qualified aliens.” This rollback may restrict access for undocumented immigrants and complicate care delivery and funding models for FQHCs serving large immigrant populations.
Legal and Implementation Uncertainty Several lawsuits have already been filed challenging specific provisions of recent healthcare legislation, creating a holding pattern for many community health centers. Additionally, critical implementation details including application processes for the $50 billion rural health funding remain undefined, leaving FQHCs to plan without complete information.
Breaking: Legal Challenges and Implementation Delays
Latest Legal Developments: Multiple lawsuits filed this month are challenging key provisions of recent healthcare legislation. This has left many community health centers and associations in a holding pattern, awaiting court decisions on implementation timelines.
Implementation Update: Critical guidance documents remain unreleased. Despite the $50 billion rural healthcare allocation, application processes and eligibility requirements are still being finalized, creating planning challenges for health centers nationwide.
Policy Changes: While FQHCs we made aware of the rescission of 1998 policy allowing services for “non-qualified aliens,” there is a lack of guidance and specifics on how FQHCs should respond. The press release says “HHS will issue further guidance to affected programs to ensure full implementation” but CHCs do not have clear direction on how to proceed.
What We're Hearing: Industry conversations reveal a mixed response—some FQHCs are pausing expansion plans while others are accelerating preparation efforts to be first in line when opportunities become available.
Strategic Recommendations for FQHC Leaders
Strong leaders aren't standing still during this uncertain period. Here are four critical strategies every FQHC should implement now:
1. Maximize Current Revenue Capture
Ensure your clinic is optimizing every revenue opportunity available under current regulations. Now is not the time to leave money on the table due to missed billing opportunities or incomplete documentation.
Conduct a comprehensive revenue cycle audit to identify gaps
Review all payer contracts for optimization opportunities
Ensure staff are trained on current billing requirements and documentation standards
Implement quality metrics that support value-based payment arrangements
2. Prepare for Multiple Policy Scenarios
The most effective leadership teams are using this moment to prepare for different possible futures, not just react to present circumstances. Scenario planning allows FQHCs to respond quickly regardless of how policy changes unfold.
Develop financial models for various Medicaid funding scenarios
Create contingency plans for different patient volume projections
Identify which services and programs are most vulnerable to policy changes
Build flexibility into staffing and operational structures
3. Position for Rural Health Funding Success
With $50 billion allocated for rural healthcare, eligible FQHCs must be ready to act quickly when application processes are announced. Preparation now will be crucial for successful funding applications.
Document current infrastructure needs and improvement plans
Gather data on patient demographics and service gaps
Develop relationships with potential partners for collaborative applications
Prepare preliminary project proposals for rapid deployment when applications open
4. Leverage the Medicaid Copay Exemption Advantage
Starting October 1, 2028, most Medicaid expansion patients with incomes over 100% of the federal poverty level will face new cost-sharing requirements—up to $35 per service. However, FQHCs are explicitly exempt from these copays, creating a significant competitive advantage.
Develop messaging strategies highlighting the no-copay benefit
Prepare patient communication materials explaining the exemption
Train staff to effectively communicate this advantage during patient interactions
Consider this exemption in marketing and community outreach efforts
5. Stay Up to Date
Stay up to date with policy changes and industry information. The amount of information and changes can be overwhelming so find your best sources and monitor closely.
Identify and closely monitor those reliable and credible sources
With policy changes like the interpretation of PRWORA it is important to be on top of implementing changes to avoid and risk to compliance or funding
Ensure staff accountable for specific functions within your organization are staying up to date
Establish a regular industry update meeting cadence to share amongst your team and keep everyone informed
Field Report: What We're Seeing Across States
Despite the uncertainty, we're seeing mixed but notable activity in the field. While some health centers are taking a wait-and-see approach, others are moving forward with strategic investments:
Oregon: One clinic is undergoing a significant facility expansion
California: A new clinic location has just opened
Maine: New construction projects are underway to triple facility size
Washington State: An FQHC received funding for a workforce development clinic
Nationwide: Multiple clinics are making substantial investments in IT infrastructure
These examples reflect a larger trend, some FQHCs are using this uncertain window as an opportunity to modernize, expand, and strengthen their market position.
Update: $50 Billion Rural Health Investment
Here's the latest on the historic rural healthcare funding allocation. While the $50 billion represents unprecedented federal investment in rural health infrastructure, key details remain under development.
What We Do Know:
50% of the funding is being equally distributed among all states with approved applications and 50% will be based on an approach TBD determined by CMS
CMS has discretion to distribute funds and is not required to publish how the funds will be distributed
States will be applying for the funds and can apply to use it in various ways
Key Considerations:
Funding will likely be competitive, requiring strong applications
Multi-year commitments may be required
Infrastructure improvements and workforce development are likely priority areas
Partnership opportunities with other rural providers may strengthen applications
For more information check out: A Closer Look at the $50 Billion Rural Health Fund in the New Reconciliation Law | KFF
Additional Updates
"Make America Healthy Again" Initiative: Growing potential exists for food security funding for FQHCs under this movement. NACHC is actively advocating, with updates continuing to emerge.
Projected Patient Volume Changes: Some forecasts suggest patient volume and clinic site numbers could return to 2013 levels—nearly half of current levels. However, the total number of distinct clinics (not individual sites) is expected to remain steady, suggesting consolidation rather than widespread closures.
Preparing for Success in an Uncertain Environment
The current healthcare policy landscape requires FQHCs to balance preparation with patience. While uncertainty creates challenges, it also presents opportunities for well-positioned health centers to strengthen their operations and expand their impact.
Key Success Factors:
Maintain operational excellence while preparing for change
Build financial reserves and operational flexibility
Strengthen community relationships and partnerships
Stay nimble with your future strategy to adapt where changes need to be made
Stay informed about policy developments without overreacting to every update
FQHCs that approach this period strategically, maximizing current opportunities while preparing for multiple futures, will be best positioned to thrive regardless of how policy changes unfold.
Looking Ahead
We're closely monitoring these developments to help our clients respond with strategy and confidence. The healthcare policy landscape will continue evolving, but FQHCs that take proactive steps now will be prepared to capitalize on opportunities and navigate challenges successfully.
At Community Link Consulting, we're committed to supporting FQHC leaders through this period of change and opportunity. Our expertise in healthcare policy, financial planning, and strategic positioning helps health centers make informed decisions during uncertain times. Have questions about how to position your FQHC for opportunities or navigate today’s shifting healthcare policy landscape? Let’s talk strategy, preparation, and what forward-thinking health centers are doing now to stay ahead.
Phone: 509-226-1393
Email: info@communitylinkconsulting.com
Authors:
Karen Creveling-Hughes, CEO & Visionary, Community Link Consulting - Karen brings 30 years of accounting and leadership experience to healthcare consulting, specializing in organizational effectiveness and strategic development for FQHCs nationwide.
Amy Brisson, Chief Strategy Officer, Community Link Consulting - Amy combines over 15 years of progressive financial leadership experience with 11 years of specialized FQHC industry expertise to drive strategic initiatives and deliver solutions for community health centers.
