FQHC Facilities – Non-Compliance Risk Statement

Purpose

To define and communicate the potential organizational, financial, and legal risks to the Health Center resulting from non-compliance with federal and HRSA requirements governing medical staff credentialing and privileging processes.

Policy Statement

It is the policy of this Federally Qualified Health Center (FQHC) to ensure that all licensed independent practitioners and other clinical staff are appropriately credentialed and privileged in accordance with HRSA, FTCA, and applicable state and federal laws prior to rendering patient care. Failure to adhere to these requirements may result in significant organizational, legal, financial, and patient safety risks.

Potential Risks of Non-Compliance

1. Loss of FTCA Deeming Status
2. Non-compliance with HRSA credentialing and privileging requirements may result in loss or denial of FTCA deeming. This exposes the FQHC and its providers to personal liability for malpractice claims. Reference: HRSA FTCA Policy Manual (2024), Chapters 2 and 3; PIN 2001-16; PIN 2002-22.
3. Loss or Reduction of HRSA Grant Funding
4. HRSA may impose conditions, withhold, or terminate Section 330 grant funding following findings of non-compliance during Operational Site Visits (OSV). Reference: HRSA Health Center Program Compliance Manual, Chapter 5 (Clinical Staffing) and Chapter 12 (Federal Tort Claims Act).
5. Billing and Reimbursement Consequences
6. Services rendered by uncredentialed or unprivileged providers may result in claim denials, payment recoupments, or potential liability under the False Claims Act. Reference: 42 CFR § 455.410–455.412; OIG Compliance Program Guidance.
7. Patient Safety and Quality Risks
8. Failure to verify provider qualifications and competence jeopardizes patient safety and care quality, potentially resulting in adverse clinical events and accreditation loss. Reference: Joint Commission and AAAHC Accreditation Standards.
9. Legal and Regulatory Exposure
10. Permitting providers to practice without valid licenses or credentials may violate state medical practice laws and result in sanctions, fines, or criminal penalties. Reference: State Licensing Boards; 42 U.S.C. § 254b.
11. Reputational and Operational Damage
12. HRSA findings or publicized adverse events related to credentialing deficiencies may damage the organization’s community standing and relationships with partner entities.
13. Corrective Action and Administrative Burden
14. HRSA or accrediting agencies may impose corrective action plans (CAPs), diverting resources from core operations and delaying service delivery.

Responsibility

The following roles share accountability for ensuring compliance with credentialing and privileging requirements:

• Chief Executive Officer (CEO): Ensures organizational compliance with HRSA and FTCA requirements.
• Medical Director: Oversees clinical compliance, reviews credentialing and privileging decisions, and ensures ongoing competency verification.
• Credentialing Specialist/Coordinator: Manages provider files, verification processes, and documentation of licensure, DEA, and certifications.
• Board of Directors: Approves privileging recommendations and ensures compliance oversight is integrated into governance activities.

References

• HRSA Policy Information Notice (PIN) 2001-16: Credentialing and Privileging of Health Center Practitioners
• HRSA Policy Information Notice (PIN) 2002-22: Clarification of Credentialing and Privileging Requirements
• HRSA FTCA Policy Manual (2024 Edition)
• HRSA Health Center Program Compliance Manual, Chapters 5 and 12
• 42 CFR § 455.410–455.412 (Medicaid Provider Enrollment)
• 42 U.S.C. § 254b (Section 330 of the Public Health Service Act)
• OIG Compliance Program Guidance for Individual and Small Group Practices
• The Joint Commission and AAAHC Accreditation Standards