Community Health Centers and HRSA Section 330: UDS Reporting and Compliance

Community health centers operate under one of the most tightly defined compliance frameworks in the federal nonprofit landscape. Section 330 grantees and look-alikes are subject to 19 program requirements in HRSA’s Health Center Program Compliance Manual, they report annually through UDS on patient demographics and clinical quality, they must operate a sliding fee discount program with board-approved schedules, and if deemed under FTCA they carry federal employee malpractice coverage contingent on specific credentialing and risk management documentation.

This guide covers the reporting and compliance structure health centers actually operate under.

The 19 Program Requirements

The Health Center Program Compliance Manual organizes Section 330 compliance into 19 program requirements, grouped in four categories:

Need: the area or population served must demonstrate unmet need through an approved needs assessment.

Services: required services (primary medical, diagnostic laboratory, diagnostic radiologic, voluntary family planning, preventive dental, preventive health, immunizations, well-child services, gynecological care, obstetric care for prenatal and postpartum, emergency medical, pharmaceutical, substance use disorder screening, behavioral health/mental health, preventive dental, adult vaccinations, cessation services for tobacco, and enabling services), additional services as appropriate to the target population, clinical staffing sufficient for services, accessible locations and hours of operation, after-hours coverage arrangements, and hospital admitting privileges or arrangements.

Management and finance: sliding fee discount program, quality improvement / quality assurance program, key management staff with required qualifications, contractual and affiliation agreements meeting federal requirements, collaborative relationships with other providers, financial management and internal controls, billing and collections, budget, and program data reporting systems (UDS).

Governance: board composition including the patient-majority requirement, board authority over defined non-delegable items, and board responsibilities including policy adoption and oversight.

Each requirement has specific documentation HRSA expects to see in an OSV. Missing documentation at any of the 19 requirements generates a condition that requires corrective action within a defined timeframe.

UDS: The Annual Performance Report

UDS is submitted annually by February 15 covering the prior calendar year. The data structure:

Table 1 - Patients by Age and Gender Table 2 - Patients by Race and Ethnicity Table 3A - Patients by Age, Poverty Level, Insurance Table 3B - Patients by Principal Third-Party Medical Insurance Table 4 - Selected Patient Characteristics (homeless, migratory and seasonal agricultural workers, public housing residents, school-aged children, veterans) Table 5 - Staffing and Utilization Table 6A - Selected Diagnoses and Services Rendered Table 6B - Quality of Care Indicators Table 7 - Health Outcomes and Disparities Table 8A - Financial Costs Table 9D - Patient Service Revenue Table 9E - Other Revenue

Clinical quality measures include childhood immunization status, cervical cancer screening, tobacco cessation, depression screening, weight assessment and counseling for children/adolescents, BMI screening and follow-up for adults, diabetes HbA1c poor control, controlling high blood pressure, colorectal cancer screening, hypertension control, ischemic vascular disease use of aspirin or antiplatelet therapy, HIV screening, and others defined in the UDS manual.

UDS data quality is critical. HRSA cross-references UDS with site visit chart sampling. A clinical quality measure reported in UDS that cannot be substantiated in patient records at the OSV is a finding.

Sliding Fee Discount Program

Compliance Manual Chapter 9 governs the SFDP. Required elements:

• Board-approved sliding fee schedule applied to all required and additional services
• Income verification procedure for patients seeking a discount
• Discount tiers from 100 percent discount (or a nominal fee) for patients at or below 100 percent FPG, graduated up to 200 percent FPG where patients pay full fees
• Application at all service delivery sites
• Annual board review
• Documentation in the patient record of income and eligibility determination

Nominal fees: health centers can charge a board-approved nominal fee at the lowest tier. “Nominal” is not defined numerically in the Compliance Manual - HRSA guidance interprets it as an amount not sufficient to be a barrier to care. Commonly in the $5-25 range.

Common findings: patient records missing income documentation, discount schedules not updated with the current year’s federal poverty guidelines, sliding fee not applied to behavioral health or dental services in scope, and board minutes lacking the annual review.

FTCA Deeming

HRSA-deemed health centers carry FTCA malpractice coverage for the health center and for covered individuals performing work within the scope of their employment at the health center.

Covered individuals:

• Officers and employees of the health center
• Certain contractors meeting the contractor deeming criteria under 42 U.S.C. 233(g)(5) (full-time or part-time contractor who provides health services and meets specified conditions)
• Governing board members performing health center duties

Required to maintain deeming:

• Approved annual deeming application
• Credentialing and privileging for all covered individuals meeting PIN 2001-16 requirements (primary source verification, NPDB query, delineation of privileges, re-credentialing on 24-month cycle at most)
• Risk management program with documented training
• Quality improvement / quality assurance program
• Claims handling procedure with reporting to HRSA within required timeframes

FTCA findings in OSVs often relate to expired credentials, missing NPDB queries, or re-credentialing timelines that slipped past 24 months.

Scope of Project

The approved scope of project defines the services, sites, and target population the Section 330 grant covers. Changes require a change in scope request to HRSA through the Electronic Handbooks (EHB) system:

• Change in scope, non-service - changes to the target population, approved sites (add/remove/change), approved service delivery sites, or form of direct service (visiting provider, mobile, telehealth)
• Change in scope, service - adding or removing a required or additional service

Services delivered outside the approved scope are not Section 330-allowable. This includes services delivered at an unlisted site, services added without an approved change in scope, or population served outside the approved target.

Financial Management and the Single Audit

Section 330 grantees are subject to 2 CFR Part 200 Subpart E cost principles and Subpart F audit requirements. Single audit under 2 CFR 200.501 applies at the $1,000,000 federal expenditure threshold (raised from $750,000 for fiscal years ending September 30, 2025 or later) - which most Section 330 grantees exceed.

HRSA Health Center Program is frequently selected as a major program given its size. Single audit testing of Section 330 typically covers:

• Activities allowed / unallowed - services within scope
• Allowable costs - Section 330 allowable cost list, sliding fee as not income but as cost-offset, Medicaid and Medicare PPS reimbursement treatment
• Cash management - draw timing
• Eligibility - sliding fee determinations for patients claimed as discount-eligible
• Matching - if Section 330(e) or other funding streams have match requirements
• Period of performance
• Procurement - especially for contracted services
• Reporting - UDS data quality
• Special tests and provisions - sliding fee documentation, scope of project

Board Composition and Authority

Section 330(k)(3)(H) requires:

• Majority patient board - at least 51 percent of board members must be patients who receive primary care from the health center
• Patient representativeness - patient board members reflect the patient population served in race, ethnicity, gender
• Non-patient member composition - non-patient members (no more than 49 percent) cannot include individuals who derive more than 10 percent of their annual income from the health industry
• Non-delegable authorities - selecting the executive director, adopting policies, approving the budget, approving scope of project, approving health center services, approving the sliding fee discount schedule, and the annual performance review of the executive director

OSV board governance reviews check board composition against patient user percentages, board meeting minutes for the non-delegable authorities being exercised at the board level, and board member files for conflict-of-interest disclosures.

Billing and Collections

Compliance Manual Chapter 16 requires documented billing and collections policies that:

• Bill Medicaid, Medicare, CHIP, and other payers for patients with coverage
• Apply the sliding fee discount to patients without coverage or who qualify under the SFDP
• Ensure no patient is denied service due to inability to pay
• Prohibit aggressive collections practices that would impede access to care

Medicaid and Medicare FQHC Prospective Payment System (PPS) reimbursement applies. Section 330 funds are for the cost of services not covered by patient fees and third-party reimbursement - the grant backfills the gap, not the full service cost.

Record Retention

2 CFR 200.334 applies for financial records: three years from the date of the final expenditure report, longer if litigation or audit is open. Patient medical records follow state medical record retention law, which typically extends well beyond three years. FTCA-related credentialing files must be retained for the duration of the deeming and for periods defined by state medical licensing and NPDB policies.

Start a GrantPipe trial

GrantPipe tracks restricted funds by HRSA funding stream, grant reporting calendars keyed to UDS February 15 deadlines, and activity logs that tie documentation to financial transactions. Start a trial at grantpipe.com/signup to evaluate whether the workflow fits Section 330 grantee operations alongside Medicaid and Medicare revenue cycles.

DEFINITION

Section 330

Section 330 of the Public Health Service Act (42 U.S.C. 254b) authorizing the Health Center Program. Provides grants to health centers serving medically underserved areas or populations.

DEFINITION

FQHC

Federally Qualified Health Center - a designation from the Centers for Medicare & Medicaid Services (CMS) that entitles the health center to enhanced reimbursement under the FQHC Prospective Payment System. Health centers receiving Section 330 grants automatically meet FQHC status; look-alikes that meet Section 330 requirements but do not receive the grant can be FQHC-designated.

DEFINITION

UDS

Uniform Data System - HRSA's annual performance report for Health Center Program grantees and look-alikes. Submitted by February 15 for the prior calendar year.

DEFINITION

FTCA

Federal Tort Claims Act. HRSA-deemed health centers and covered individuals have medical malpractice coverage as federal employees under 42 U.S.C. 233(g)-(n).

DEFINITION

OSV

Operational Site Visit - HRSA's compliance review of Health Center Program grantees, testing the 19 program requirements using the Site Visit Protocol.