Waiving and Reducing Fees – Purpose and Impact on Patients

The waiving and reducing of fees sometimes can create confusion for Federally Qualified Health Centers (FQHCs). We recognize that many of our patients experience financial difficulty and have challenges in paying for their health care, however, the purpose of waiving and reducing fees is NOT to reduce fees for patients who are experiencing routine financial hardships in their lives. Waiving and reducing fees is for times when our patients experience unusual circumstances that impede their ability to pay for services. Health Centers are required to have board approved policies and procedures that include the specific circumstances when the health centers will waive or reduce fees or payments.  These include all patients regardless of financial class, and includes uninsured, underinsured, insured, and full pay patients.

FQHCs have the authority to define what special circumstances are allowed. Examples are listed below, but it is up to the FQHC to determine what will be included.

  • Death of a family member that affects household income
  • Catastrophic medical diagnosis or emergency
  • Legitimate dispute of services rendered (clinic error or service recovery)
  • Mental instability
  • Displacement due to natural disaster


When defining special circumstances, it is important to include situations that would affect your patients. For example, if you live in an area that is susceptible to tornadoes, you should consider “displacement due to natural disaster” as a possible special circumstance. 

FQHCs are not allowed to have multiple sliding scales based on any reason other than service; consequently you cannot have a nominal fee of $10 for all housed patients and a $0 nominal fee for homeless patients. However, it is allowable to define homelessness as a special circumstance, therefore enabling you to waive the fees associated with a homeless patient.

Lastly, you do not want to have such a limited list of special circumstances that a situation arises whereby the policy would not be applicable. Consider adding “other explained extenuating circumstances” as an allowable situation so that if an undefined hardship is identified the policy would apply.

In addition to the policy, FQHCs should have procedures in place to ensure that patients and staff understand the process for applying/receiving this discount. Steps that should be considered include:

  • Requesting a Waiver 
  • Approval Process 
  • Implementation 


In conclusion, FQHCs are required to have a policy and procedure that allows patients with a special circumstance to have fees waived or reduced, as needed, so that service is not denied based on a patient’s inability to pay. When developing policies and procedures you should always refer to the Health Center Program Compliance Manual for any questions or concerns you may have. https://bphc.hrsa.gov/compliance/compliance-manual

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