Learn The Lingo

Learn the Lingo: Key Terms for Navigating the Value Based Care World

With the shift toward value-based payment models, pharmacists are seizing new opportunities to improve patient care in medical homes, accountable care organizations, and other innovative care models. This resource includes acronyms and terminology commonly used when practicing in or discussing innovative practice models. Each term includes a short description and references so you can further your practice in a value based care world. This is the first of multiple volumes that will be published by the Medical Home/ACO SIG.

Annette Jones
/ Categories: Learn the Lingo

Federally Qualified Health Center (FQHC)

Definition: A Federally Qualified Health Center (FQHC) is a community-based outpatient clinic that provides comprehensive primary care services to a designated Medically Underserved Area (MUA) or Medically Underserved Population (MUP).1 Defining characteristics of MUAs and MUPs can include a large elderly population, high poverty, infant mortality rates, or a lack of primary care providers.2 The comprehensive services of an FQHC can include preventive care, dental care, chronic disease management, mental health and substance abuse, or hospital and specialty care.3 FQHCs are eligible to receive funding from the Health Resources & Services Administration (HRSA) in addition to reimbursement from Medicare and Medicaid if they meet certain criteria.1 The criteria for certification as a FQHC includes offering a sliding fee payment scale determined by a patient’s ability to pay for services based on annual income and family size, having an ongoing quality assurance program, and having a governing board of directors.4 A variety of health care providers such as physicians, physician assistants, dentists, certified nurse-midwives, clinical psychologists, clinical social workers, and pharmacists can provide services at an FQHC.5

How it relates to ACO/PCMH: ACOs and PCMHs prioritize high-quality patient care. Oftentimes, patients may not have access to high-quality comprehensive care due to socioeconomic status and other cost related barriers. As a result, these patients may have poor health outcomes and increased utilization of emergency services, which FQHCs have been shown to address and help mitigate.6 Furthermore, FQHCs can offer services (such as case management, language translation, and transportation) which are not typically covered by fee-for-service Medicaid plans and can further enhance accessibility and quality of care.7 During a visit, patients typically pay an affordable encounter fee which covers these qualified services.8 By coordinating with one another, providers within a FQHC can provide all-encompassing, accessible health care to the patient, which can ultimately improve health outcomes.

Involved organizations/oversight: HRSA, the Centers for Medicare and Medicaid Services, and the FQHC Prospective Payment System (PPS) ensure that FQHCs are providing affordable, patient-centered care to underserved patient populations.1,7 As previously mentioned, HRSA has defined criteria that must be maintained, while several states are pilot testing value-based payment models to encourage FQHCs to focus on the quality of patient care.4,7,9 Ensuring that underserved patients have continuous access to health care can improve health outcomes within the community and reduce overall health care costs.


  1. CMS. Federally qualified health center.
  2. Health Resources & Services Administration. MUA Find.
  3. FQHC Associates. What is an FQHC?
  4. HHS. National Health Service Corps site reference guide.
  5. American Society of Health System Pharmacists. Opportunities for sustainable pharmacy services in Federally Qualified Health Centers (FQHCs): Date of Publication: April 2017. ASHP: Pharmacists advancing healthcare.
  6. Okeke N, Schmidt C, Alborn S, et al. Implementing value-based primary care delivery in Federally Qualified Health Centers. Popul Health Manag. 2021;41(1):78–85.
  7. National Association of Community Health Centers. The facts about Medicaid’s FQHC Prospective Payment System (PPS). NACHC.
  8. Medicaid and CHIP Payment and Access Commission. Medicaid payment policy for Federally Qualified Health Centers.
  9. California Health Care Foundation. How health centers can improve patient care through value-based payment models. California Health Care Foundation.


Contributing Authors:

Rachael Lau, final-year PharmD candidate
Chapman University School of Pharmacy

Hindu Rao, PharmD, APh, BCACP
Clinical Assistant Professor of Pharmacy Practice, Chapman University School of Pharmacy

Last reviewed 10/24/2023 by Hindu Rao, PharmD, APh, BCACP

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