Chapter 1: Health Center Program Eligibility

In this chapter:

• Non-Profit Organizations
• Public Agency Organizations
• Tribal or Urban Indian Organizations
• Additional Eligibility Requirements for Look-Alike Designation

Organizations applying for funding or designation under the Health Center Program must demonstrate that they are eligible organizations under the Health Center Program statute and regulations. Specifically, organizations applying for funding as health centers or designation as look-alikes must be private non-profit entities or public agencies.¹ Organizations applying for look-alike designation are also subject to certain additional statutory eligibility requirements.²

In addition to the eligibility requirements described in this Chapter, organizations may be required to comply with certain additional eligibility requirements described in Notices of Funding Opportunity (NOFOs) or look-alike application instructions in order to receive a Health Center Program award or look-alike designation.

Non-Profit Organizations

An organization would demonstrate to HRSA that it is a private non-profit entity by submitting one of the following types of documentation:

• A copy of a currently valid IRS tax exemption certificate;
• A statement from a state taxing body, state attorney general, or other appropriate state official certifying that the applicant organization has a non-profit status and that none of the net earnings accrue to any private shareholders or individuals;
• A certified copy of the organization’s official certificate of incorporation or similar document (for example, articles of incorporation) showing the state or tribal seal that clearly establishes nonprofit status; or
• Any of the above documents for a state or local office of a national parent organization and a statement signed by the parent organization that the applicant organization is a local non-profit affiliate.

Public Agency Organizations

An organization would demonstrate to HRSA that it is a public agency by submitting one of the following types of documentation:

• A current dated letter affirming the organization’s status as a State, territorial, county, city, or municipal government; a health department organized at the State, territory, county, city or municipal level; or a subdivision or municipality of a United States (U.S.) affiliated sovereign State formally associated with the U.S. (for example, Republic of Palau);
• A copy of the law that created the organization and that grants one or more sovereign powers (for example, the power to tax, eminent domain, police power) to the organization (for example, a public hospital district);
• A ruling from the State Attorney General affirming the legal status of an entity as either a political subdivision or instrumentality of the State (for example, a public university); or
• A “letter ruling” which provides a positive written determination by the Internal Revenue Service of the organization’s exempt status as an instrumentality under Internal Revenue Code section 115.

Tribal or Urban Indian Organizations

Native American tribal organizations, including those defined under the Indian Self- Determination Act³ or the Indian Health Care Improvement Act^4,5 are eligible to apply for Health Center Program funding or designation. Such organizations would demonstrate their eligibility to HRSA by providing applicable documentation as described in either the Non-Profit Organizations or Public Agency Organizations sections above.

Additional Eligibility Requirements for Look-Alike Designation

In addition to demonstrating that it is either a private non-profit entity or a public agency, an organization applying for look-alike designation must demonstrate to HRSA that it satisfies all of the following requirements:

1. It is currently delivering primary health care services to patients within the proposed service area.
2. It is not owned, controlled, or operated by another entity. Specifically, the organization applying for look-alike designation:
   
   1. Owns and controls the organization’s assets and liabilities (for example, the organization does not have a sole corporate member, is not a subsidiary of another organization), and as such will be able to ensure that the benefits that accrue through look-alike designation as a Federally Qualified Health Center (FQHC) are distributed to the Health Center Program project (for example, FQHC payment rates, 340B Drug Pricing); and
   2. Operates the Health Center Program project. At a minimum, the look-alike applicant organization demonstrates that it maintains a Project Director/Chief Executive Officer (CEO) who will carry out independent, day-to-day oversight of health center activities solely on behalf of the governing board of the applicant organization.
3. It is not currently receiving funding as a Health Center Program Federal award recipient.⁶

   Organizations will not be awarded Federal funding or look-alike designation that would result in “dual status,” whereby the organization becomes both a Federal awardee under section 330 and a look-alike designee. For example, an organization that is currently a Health Center Program awardee would no longer be awarded new look-alike designation status through the Initial Designation process, nor would an organization that is currently a Health Center Program look-alike be awarded Health Center Program funding unless, at the same time, it proposes to include all of its health center sites within the scope of the Health Center Program award.

   Health centers that currently have dual status as of the date of release of the Compliance manual will be permitted to maintain such status as long as subsequent Service Area Competition and Renewal of Designation applications are approved by HRSA.

Footnotes

^1. Section 330(e)(1)(A) of the PHS Act, 42 CFR 51c.103, and 42 CFR 56.103.

^2. Sections 1861(aa)(4)(b) and 1905(l)(2)(B) of the Social Security Act.

^3. The text of the Indian Self-Determination Act may be found at 25 U.S.C. Ch 46.

^4. The text of the Indian Health Care Improvement Act may be found at 25 U.S.C. Ch 18.

^5. Per section 330(k)(3)(H), tribal or urban Indian organizations are exempt from Health Center Program governance requirements.

^6. Health centers may not maintain or obtain look-alike designation if they are already receiving a Federal award under section 330 of the Public Health Service Act. Under Section 1905(l)(2)(B) of the Social Security Act: “The term “Federally-qualified health center” means an entity which … (i) is receiving a grant under section 254b of this title…or (ii)(I) is receiving funding from such a grant under a contract with the recipient of such a grant, and (II) meets the requirements to receive a grant under section 254b of this title…or (iii) based on the recommendation of the Health Resources and Services Administration within the Public Health Service, is determined by the Secretary to meet the requirements for receiving such a grant, including requirements of the Secretary that an entity may not be owned, controlled, or operated by another entity.”