On April 27, 2021, the U.S. Department of Health and Human Services announced roughly $1 billion in grants available to eligible community health centers through the Health Resources & Services Administration (“HRSA”) Health Center Program. As part of the American Rescue Plan, these grants are specifically designed to fund major construction and renovation projects necessary to ensure the provision of high-quality primary care services to underserved communities in the wake of the COVID-19 pandemic. HRSA will award the grants to all qualifying providers that submit a completed application and meet the eligibility criteria summarized below, presumably until the grant funds run out.

What Providers Are Eligible?

To be eligible for one of the estimated 1,376 awards, an applicant must be an existing and active, community-based Federally Qualified Health Center (“FQHC”) that receives funding from the HRSA Health Center Program to provide primary care services in underserved areas. Not all FQHCs will qualify, however, as award recipients must have an active H80 grant at the time of application and the award and receive operational support through funds designated under Section 330(e), (g), (h) and/or (i) of the Public Health Service Act. The application window for H80 grants closed, so to the extent an FQHC did not receive that grant, that facility would not be eligible for this grant.

What Projects Are Eligible?

Not all construction and renovation projects by a provider will qualify for the grant. Only those specific projects that fall within one of the following four categories are eligible for funding:

  1. Construction of a new facility, which includes a new, stand-alone structure;
  2. Expansion of an existing facility that increases the square footage of a current structure or other projects that include significant site work (e.g., creating a covered driveway for patient drop-off);
  3. Alteration or renovation of an existing facility that does not increase the current square footage of the facility (e.g., modernizing the interior of any existing space); and
  4. Acquisition of new, stand-alone equipment that is not affixed to the building structure, with a useful life of greater than a year, such as clinical equipment or a mobile medical van.

Although the American Rescue Plan focuses on COVID-19 assistance, projects fitting within any of the categories above do not need to be related to the pandemic. HRSA does not, moreover, limit these grants to owned properties; leasehold improvements may qualify for the grants, too, so long as applicants obtain all necessary landlord approvals under their applicable leases.

An eligible FQHC may complete up to five projects using the funding from this grant as long as the grant recipient completes each project between September 1, 2021 through August 31, 2024. HRSA will not approve funds for proposals for construction projects beginning prior to September 1, 2021; however, the grant can cover pre-construction costs (i.e., planning and design fees) incurred as early as January 31, 2020.

What Is the Amount of a Grant?

The American Rescue Plan does not tie the amount of the grants to the project costs but instead to the number of patients at a facility. A qualified applicant will receive a $500,000 grant with an additional $11 per patient (based on the 2019 Uniform Data System reporting). Applicants may only submit one form despite the ability to apply for up to five projects. As a result, if a qualifying FQHC has three projects it seeks grant money for, that FQHC should submit one application rather than three separate applications for each project.

When Is the Deadline to Apply?

Applications are due by 5:00 PM on June 24, 2021, and more information can be found on the application process by following this link.

* * *

For qualifying FQHCs with a long wish list for facility improvements, these grants may make those projects financially feasible, and as a result, eligible FQHCs should carefully (and promptly) consider whether they qualify and should apply for a grant.