The 19 Program Requirements
The Bureau of Primary Health Care (BPHC) has codified the statutory and regulatory requirements for Section 330 grantees into 19 Program Requirements. These requirements are not discretionary — they are conditions of participation in the Health Center Program. Non-compliance with any requirement can trigger progressive action up to and including termination of the award and loss of FQHC designation.
The 19 requirements are organized into four categories: Need, Services, Management and Finance, and Governance. Understanding this organizational framework helps when preparing for Operational Site Visits, because HRSA reviewers assess compliance by category.
Category 1: Need
| # | Requirement | What HRSA Verifies |
|---|---|---|
| 1 | Needs Assessment | Current needs assessment data, community input, board awareness of needs |
| 2 | Required and Additional Services | All required services are available (directly or by arrangement); services align with Form 5B |
| 3 | Staffing Requirement | Adequate clinical and administrative staff to support the scope of services |
Category 2: Services
| # | Requirement | What HRSA Verifies |
|---|---|---|
| 4 | Accessible Hours of Operation/Locations | Hours and locations are responsive to patient needs; after-hours coverage is documented |
| 5 | After-Hours Coverage | 24/7 coverage arrangement (call service, nurse triage, ER arrangement) with documentation |
| 6 | Hospital Admitting Privileges and Continuum of Care | Admitting privileges or referral arrangements with hospitals; documented continuum of care |
| 7 | Sliding Fee Discount Program | Board-approved SFDP based on FPL; nominal charge at/below 100% FPL; discount schedule applied consistently |
| 8 | Quality Improvement/Assurance Plan | Board-approved QI/QA plan with clinical and operational measures, ongoing monitoring, and documented improvement activities |
Category 3: Management and Finance
| # | Requirement | What HRSA Verifies |
|---|---|---|
| 9 | Key Management Staff | CEO/Executive Director, CMO/Medical Director, CFO/Finance Director, CIO (if applicable) are in place and qualified |
| 10 | Contractual/Affiliation Agreements | Written agreements for all contracted services; agreements reflect health center oversight and control |
| 11 | Collaborative Relationships | Documented relationships with other providers, social services, and community organizations to avoid duplication |
| 12 | Financial Management and Accounting Systems | Accounting system that tracks grant funds separately; annual independent audit; internal controls; compliance with 2 CFR 200 |
| 13 | Billing and Collections | Policies for billing all patients and third-party payers; reasonable collection efforts; revenue cycle management |
| 14 | Budget | Board-approved annual budget reflecting total operations; budget monitoring and variance reporting |
| 15 | Program Data Reporting Systems | EHR and practice management systems capable of generating UDS data; data validation processes |
Category 4: Governance
| # | Requirement | What HRSA Verifies |
|---|---|---|
| 16 | Board Authority | Bylaws establish board authority over key functions; minutes document exercise of those authorities |
| 17 | Board Composition | 51%+ patient majority verified; board reflects patient population demographics; no conflicts of interest |
| 18 | Conflict of Interest Policy | Written conflict of interest policy; annual disclosure statements; documentation of recusal when conflicts arise |
| 19 | Federal Tort Claims Act (FTCA) Coverage | Deeming application submitted; credentialing and privileging policies meet FTCA requirements; risk management program in place |
Operational Site Visits (OSV)
The Operational Site Visit is HRSA's primary mechanism for verifying compliance with the 19 Program Requirements. OSVs are conducted by BPHC consultants and typically last 2–3 days for a single-site health center, longer for multi-site organizations. Every Section 330 grantee will receive an OSV at least once per project period (every 3–5 years), and HRSA may conduct additional visits if compliance concerns are identified.
OSV Process
The OSV follows a structured process:
- •Pre-visit notification (60–90 days): HRSA notifies the health center of the scheduled visit and provides a document request list.
- •Document submission (30–45 days before): The health center uploads requested documents to EHBs, including bylaws, board minutes, policies, financial statements, credentialing files, and sliding fee schedules.
- •On-site visit (2–3 days): Consultants tour facilities, interview staff and board members, review patient records, verify policies are implemented, and observe clinical operations.
- •Exit conference: Consultants share preliminary findings with leadership and the board chair. This is your first indication of where compliance gaps were identified.
- •Written findings (60–90 days after visit): HRSA issues a formal report categorizing each requirement as met, partially met, or not met.
- •Corrective action (if applicable): For requirements found partially met or not met, the health center must submit a corrective action plan within the timeframe specified by HRSA.
OSV Preparation Strategy
Experienced health center administrators maintain “OSV readiness” as an ongoing practice, not a project to undertake when the notification letter arrives. Key preparation activities include:
- •Annual internal compliance review: Conduct a self-assessment against all 19 requirements at least annually, documenting findings and corrective actions taken.
- •Board minutes audit: Review the past 2–3 years of board minutes to verify that all required board authorities are documented. Are budget approvals, CEO evaluations, sliding fee schedule reviews, and QI plan approvals reflected in the minutes?
- •Policy currency check: Verify that all policies required by the 19 requirements are current, board-approved, and actually implemented. Outdated policies are a frequent finding.
- •Credentialing file review: Ensure every provider's credentialing file is complete and current, including license verification, DEA registration, malpractice history, and privileges documentation.
- •Sliding fee verification: Test that the sliding fee discount program is being applied correctly by pulling a sample of patient accounts and verifying that discounts match the approved schedule.
- •Form 5 accuracy check: Verify that current operations match your approved scope of project. Are you operating at all sites listed on Form 5A? Are you providing all services listed on Form 5B? If operations have changed, file a Change in Scope before the OSV.
Conditions of Award and Progressive Action
When HRSA identifies non-compliance — through an OSV, review of reports, or other monitoring activities — it applies a progressive action framework. The severity of the action corresponds to the severity and persistence of the non-compliance. Understanding this framework helps health centers anticipate consequences and prioritize corrective actions.
| Level | Action | Trigger | Consequences |
|---|---|---|---|
| 1 | Technical Assistance | Minor deficiency identified | HRSA provides guidance and resources to address the issue |
| 2 | Conditions of Award | Significant deficiency or pattern of minor deficiencies | Specific corrective actions required with deadlines; may restrict certain activities until resolved |
| 3 | Designation as High-Risk | Failure to resolve conditions; serious compliance deficiencies | Enhanced monitoring, restricted drawdowns, possible funding suspension |
| 4 | Suspension/Termination | Continued non-compliance, fraud, or inability to deliver services | Award suspension or termination; loss of FQHC designation and all associated benefits |
Conditions of award are the most common form of progressive action. They appear on the Notice of Award and specify exactly what the health center must do and by when. Conditions should be taken seriously — failure to resolve them within the specified timeframe escalates the situation. Assign a specific staff member to each condition, create an action plan with interim milestones, and report progress to the board monthly.
Sliding Fee Discount Program (SFDP)
The sliding fee discount program is one of the most scrutinized aspects of health center compliance and one of the most common areas of OSV findings. The SFDP is the mechanism by which health centers fulfill the statutory requirement to serve all patients regardless of ability to pay.
SFDP Structural Requirements
- •The schedule must be based on the federal poverty level (FPL) guidelines published annually by HHS.
- •Patients at or below 100% FPL must pay only a nominal charge (not a percentage discount — a flat nominal fee).
- •Discounts must be available for patients between 101% and 200% FPL at minimum. Many health centers extend discounts to 250% or 300% FPL.
- •No patient may be denied services due to inability to pay.
- •The schedule must apply to all services within the approved scope of project, including medical, dental, behavioral health, and pharmacy.
- •The board must approve the schedule and any changes to it.
Common SFDP Compliance Issues
The most frequent SFDP findings during OSVs include:
- •Nominal charge applied as percentage: Charging patients below 100% FPL a percentage discount (e.g., 90% off) instead of a flat nominal charge violates the requirement.
- •FPL not updated annually: When HHS publishes new poverty guidelines (typically in January), the SFDP must be updated. Applying prior-year guidelines disadvantages patients.
- •Inconsistent application: Front desk staff applying discounts inconsistently, or practice management system not configured to automate discount calculations.
- •Services excluded: Pharmacy, dental, or behavioral health services excluded from the SFDP when they are part of the approved scope.
- •Income verification gaps: No process for verifying patient income or for re-verifying income on a periodic basis.
Governance Compliance
Governance requirements (Program Requirements 16–19) are among the most complex areas of Section 330 compliance because they involve ongoing human dynamics — board recruitment, engagement, turnover, and decision-making. The requirements are detailed in the eligibility requirements page, but the ongoing compliance dimensions deserve emphasis.
Maintaining Patient Majority
The 51% patient majority must be maintained at all times, not just at the time of application. This requires active monitoring because board composition changes over time as members resign, terms expire, or patients stop receiving care at the health center. Many health centers maintain a board composition tracker that flags when the patient majority drops below 55% — providing a buffer for unexpected departures.
Conflict of Interest Management
Health centers must maintain a written conflict of interest policy that applies to all board members, key employees, and agents. The policy must require annual disclosure of interests, define what constitutes a conflict, establish recusal procedures, and specify how conflicts are documented. Board minutes must reflect recusal when conflicts arise. HRSA reviewers will check that the policy exists, that disclosure forms are on file, and that recusals are documented in minutes.
Compliance with 2 CFR 200
In addition to the 19 Program Requirements, all Section 330 grantees must comply with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200). This regulation governs financial management, procurement, cost principles, and audit requirements for all federal grants. Key areas include:
- •Financial management standards (200.302): Accounting systems, internal controls, and financial reporting requirements
- •Procurement standards (200.317–200.327): Competitive procurement, documentation, and conflict of interest in procurement
- •Cost principles (200.400–200.476): Allowability, allocability, and reasonableness of costs charged to the grant
- •Single Audit (200.500–200.521): Organizations spending $750,000+ in federal funds must obtain a Single Audit annually
The interaction between the 19 Program Requirements and 2 CFR 200 creates a layered compliance environment. For example, Program Requirement 12 (Financial Management) incorporates 2 CFR 200 standards by reference, meaning a 2 CFR 200 violation is simultaneously a Program Requirement violation. Health centers should review the budget and financial management section for details on how these requirements apply in practice.