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GAO-10-576R 1 (2010-07-30)

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United States Government Accountability Office
Washington, DC 20548



          July 30, 2010

          The Honorable Max Baucus
          Chairman
          The Honorable Charles E. Grassley
          Ranking Member
          Committee on Finance
          United States Senate

          The Honorable Henry A. Waxman
          Chairman
          The Honorable Joe Barton
          Ranking Member
          Committee on Energy and Commerce
          House of Representatives

          The Honorable Sander M. Levin
          Chairman
          The Honorable Dave Camp
          Ranking Member
          Committee on Ways and Means
          House of Representatives

          Subject: Medicare Payments to Federally Qualified Health Centers

          To increase access to primary and preventive care services for individuals living in medically
          underserved communities, Congress authorized federally qualified health centers (FQHC) as
          a health care facility type and established requirements for Medicare coverage and payment
          as FQHCs under the Omnibus Budget Reconciliation Act (OBRA) of 1990.1 FQHCs are
          typically rural and urban safety net providers that provide primary and preventive care
          services to individuals regardless of their ability to pay. In general, a health center may
          qualify as a FQHC if it receives a federal grant under Section 330 of the Public Health Service
          Act; meets the requirements to receive such a grant; or is an outpatient health
          program/facility operated by certain tribal or urban Indian organizations.2 Currently,
          Medicare reimburses FQHCs for these services with an all-inclusive payment rate-resulting


          'Medicare is the federal health insurance program for people over age 65, individuals under age 65 with
          certain disabilities, and individuals diagnosed with end-stage renal disease. Prior to the enactment of
          OBRA 1990, Medicare paid community health centers for services normally covered under Medicare
          Part B, which covers physician and other outpatient services on the basis of the lesser of costs or
          charges.
          2Section 330 grants are administered by the Department of Health and Human Services' Health
          Resources and Services Administration (HRSA) and provide funding for programs that support
          primary health care services to medically underserved populations.


GAO-10-576R Federally Qualified Health Centers

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