Compliance has always been part of what it means to be a Federally Qualified Health Center (FQHC). Health center leaders know the rhythm well: annual board approvals, Single Audits, Operational Site Visits (OSVs), and a compliance manual that touches nearly every part of operations.
What has shifted is the follow-through. Since October 2025, the Health Resources and Services Administration (HRSA) has taken a more structured approach with health centers that are behind on their Single Audits, with firm deadlines and clear next steps. On recent OSVs, our team has also seen reviewers hold health centers closely to the Site Visit Protocol, with less flexibility than in past cycles.
The encouraging part is that HRSA’s expectations are clearly written and publicly available. The health centers that do well are the ones that build compliance into their everyday routines instead of preparing in a rush before a deadline. That consistency protects what matters most: your Section 330 grant, your FTCA coverage, your 340B savings, and the patients who rely on all three.
What HRSA’s Audit Enforcement Requires
Health centers that spend $1,000,000 or more in federal awards in a fiscal year need a Single Audit. That threshold rose from $750,000 under the revised Uniform Guidance (2 CFR 200), and HRSA’s updated Site Visit Protocol reflects the change.
The completed audit goes to the Federal Audit Clearinghouse (FAC) by the earlier of two dates: 30 days after you receive the auditor’s report, or nine months after your fiscal year-end.
In the past, HRSA’s follow-up on a late audit usually meant confirming that a CPA firm was engaged and noting an expected completion date. Beginning in October 2025, HRSA’s Division of Financial Integrity reaches out to delinquent health centers every month until the FAC has accepted all outstanding audits. For health centers that are multiple years behind, the process follows a clear sequence:
- Respond within 15 days by confirming audits were submitted or sharing a plan to catch up.
- Meet a 120-day grant condition to submit the most delinquent audits, if the 15-day response doesn’t resolve it.
- Avoid a 30-day suspension of HRSA grants, which can follow if the condition isn’t met.
- Prevent further action, including possible termination, by submitting outstanding audits before the suspension period ends.
The benefit of this structure is predictability.
Every step comes with notice and a defined window to respond, which gives health centers that are behind a clear path to get current.
HRSA also offers technical assistance sessions for health centers working through past-due audits. If your organization is preparing for its next audit, our earlier guide, FQHC Financial Audit Readiness, covers internal controls, documentation, and working effectively with your audit firm.
Why It Matters Beyond the Grant
Your Section 330 grant is the foundation for many of the benefits that make the health center model work. Staying current on audits and other requirements helps protect:
- FTCA deeming, the federal malpractice coverage most health centers rely on in place of commercial insurance
- 340B Drug Pricing Program eligibility and the pharmacy savings that help fund other services
- Enhanced reimbursement, including FQHC prospective payment rates through Medicare and Medicaid
- FQHC designation itself, which supports many of your state and federal funding relationships
“It’s not just a loss or suspension of grant dollars. If your grant is suspended or you lose your grant, you are no longer an FQHC, so you lose all the benefits of being an FQHC.”
– Amy Brisson, Managing Director, VMG Health
That’s why a proactive approach is worth the effort. Most of what HRSA reviews comes down to routines your team already has, documented consistently and kept easy to find.
Where HRSA Reviewers Are Focusing
Across every area below, the common thread is documentation. When a review, approval, or audit is clearly recorded, reviewers can confirm CFR § 200 compliance quickly, and your team can spend the visit on conversation instead of searching for evidence.
FTCA & Quality Programs
FTCA deeming saves health centers the significant cost of commercial malpractice coverage. Keeping risk management, quality improvement, and credentialing activities current and well documented supports both your FTCA renewal and your OSV.
Sliding Fee Discount Program
The sliding fee program is one of the most closely reviewed areas on an OSV. Reviewers want to see that front-line staff apply the policy consistently for every patient, and a few habits make that easy to show:
- Conduct regular internal audits of sliding fee applications to confirm staff are following your policies and procedures.
- Update the sliding fee schedule each year when the new Federal Poverty Guidelines come out, usually in January or February.
- Have the board approve the updated schedule and record that approval in the minutes.
Board Governance & Minutes
Your board must meet HRSA’s composition requirements, including a patient majority of at least 51%, and operate within its bylaws. Several items also need board review and approval each year, and the minutes should reflect each one:
- Required policies and procedures, even when nothing changed
- Hours of operation
- Needs assessment
- UDS data
- Sliding fee discount schedule
“If it’s not in the minutes, it didn’t happen. Even if they put it on the agenda, it has to be in the minutes that they reviewed it.”
– Amy Brisson, Managing Director, VMG Health
This habit pays off beyond the OSV, since health centers also report policy review and approval dates in their Service Area Competition (SAC) application.
Credentialing & Privileging
Keep complete, current files for licensed providers and other clinical staff, track expiration dates, and document every privileging review. HRSA’s examples of credentialing and privileging documentation are a helpful reference for what reviewers expect.
Scope of Project, Form 5A & contracts
Form 5A should reflect the services you provide today and how you provide them. It’s worth reviewing contracts to confirm they include the required language and align with how each service appears on Form 5A. HRSA’s Form 5A self-assessment worksheet is a good place to start.
Policy Review Timelines
Each policy should state how often it’s reviewed. A simple tracking list makes it easy to confirm every policy was reviewed and approved on schedule.
What FQHCs & Health Center Leaders Can Do Now
For most health centers, the challenge isn’t knowing what HRSA expects. It’s finding the capacity, since OSV preparation sits on top of a full slate of daily operations and other deadlines. These steps help spread the work out so readiness becomes routine.
Use the Site Visit Protocol as your open-book guide.
The Site Visit Protocol lays out the documents reviewers will request and the questions they’ll ask. Walking through it chapter by chapter, well ahead of your visit, takes much of the uncertainty out of the process.
Map the protocol to the Compliance Manual.
HRSA’s November 2025 protocol update added chapter numbers that differ from the Compliance Manual. For example, Protocol Chapter 1 (Needs Assessment) corresponds to Compliance Manual Chapter 3. A simple crosswalk helps your team connect each piece of evidence to both.
Name an OSV project manager.
One person who owns preparation, assigns sections to leaders, and checks in regularly keeps the work moving. If you’ve had leadership turnover, this is also a natural way to make sure new leaders feel ready for the sections they now own.
Organize documents the way reviewers expect.
HRSA’s OSV Required Documents and File Naming Convention shows exactly how to label and organize files. Highlighting required annual reviews and approvals in your board minutes also helps reviewers find them quickly.
Pull your samples early.
Health centers select their own samples, which works in your favor when those samples are accurate. Pulling them early leaves time to check each one against HRSA’s Sampling Review Resource Guide.
Plan your Single Audit timeline with your auditor.
Agreeing on a schedule early leaves comfortable room before the nine-month FAC deadline. If you’re catching up on past audits, prompt responses to HRSA and a realistic plan go a long way.
Build a regular EHB check into your week.
HRSA posts conditions, requests, and deadlines in the Electronic Handbook (EHB), and email notices can get lost in a busy inbox. A weekly check, along with staff training on spotting suspicious emails, keeps important items from slipping through.
A Longer Runway Between Site Visits
Starting in March 2026, HRSA is moving health centers to a four-year period of performance, with the OSV near its midpoint. Health centers with one or more conditions may be on a one-year cycle instead, and HRSA is piloting shorter one- and two-day OSV formats (HRSA webinar slides, March 2026). More time between visits is a real opportunity to build steady, year-round habits rather than preparing all at once.
Frequently Asked Questions About HRSA Compliance for FQHCs
From Compliance Requirements to Year-Round Readiness
HRSA’s requirements haven’t fundamentally changed. What has changed is how closely they’re being followed, and that makes steady, well-documented routines more valuable than ever.
Health centers that take the time to map their evidence to the Site Visit Protocol, keep board minutes complete, and stay ahead of audit deadlines put themselves in a strong position. That preparation pays off at the next OSV, and it protects the long-term stability of the services their communities depend on. The organizations that move through this period with confidence will be the ones building those habits now.
No two health centers take the same path to compliance readiness. Partner with advisors who have walked in your shoes. The teams from Community Link Consulting and Burrows Consulting, now part of VMG Health’s FQHC & Community Health Practice, can help you strengthen the systems, documentation, and routines that keep your health center prepared for what comes next.
