Key Updates in HRSA’s October 2025 Health Center Compliance Manual Revision

In October 2025, the Health Resources and Services Administration (HRSA) released a revised Health Center Program Compliance Manual, marking the first major update since 2018. This comprehensive manual is the primary guide for Federally Qualified Health Centers (FQHCs) to understand and meet program requirements. For health center executives and compliance leaders, staying abreast of these changes is crucial. Below, we summarize the most significant updates across the manual’s chapters and appendices, discuss practical implications for health center leadership, and recommend action steps to ensure ongoing compliance under the updated guidance.

General Updates and Terminology Changes

The revised manual introduces several general updates that apply across multiple chapters:

• Updated Regulatory References: Many references to the old HHS grants regulation “45 CFR Part 75” have been replaced with “2 CFR Part 200” throughout the manual. This aligns the manual with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements (commonly known as Uniform Guidance) that govern federal awards. In a similar vein, some references now point to the HHS Grants Policy Statement instead of specific CFR definitions. Health centers should note this modernization and update of citations reflects current federal rules while updating thresholds and practices with this Policy Statement, without fundamentally changing requirements.

• “Project Period” is now “Period of Performance”: The manual consistently swaps out the term project period for period of performance. This is largely a terminology update (Uniform Guidance prefers “period of performance”), but it’s helpful to mirror this language in your grant documents and discussions.

• “Awardee” becomes “Award Recipient”: In Chapter 1 and elsewhere, the manual now uses “award recipient” instead of “awardee”. Again, this is a wording change to reflect current usage. When communicating with HRSA or in policies, use “award recipient” to refer to the funded entity (your health center).

• Removal of EHB References: Any mentions of HRSA’s Electronic Handbooks (EHB) system have been removed or made more generic. This suggests that HRSA is making the compliance guidance less tied to a specific system. In fact, HRSA is in the process of transitioning many grant functions from EHB to the GrantSolutions platform. Health centers should be prepared for this system change – but rest assured, the compliance requirements themselves remain system-neutral.

• Streamlined Citations: The introduction of the manual notes a new approach to citations – using consolidated citation links and listing Policy Information Notices (PINs) and Program Assistance Letters (PALs) by number only. This means the manual may not spell out the titles of every PIN/PAL in the text, so readers might need to cross-reference those numbers with HRSA’s policy list if they want details. It’s a housekeeping change aimed at making the manual text cleaner.

These general changes don’t add new burdens, but they do modernize the manual’s language. Compliance teams should update any internal documents that quoted old regulations or terms (e.g., swap out “45 CFR 75” for “2 CFR 200” in your policies, and use period of performance in place of project period). This will ensure consistency with HRSA’s nomenclature and avoid confusion when communicating with project officers or reviewers.

Program Oversight & Needs Assessment (Chapters 2–3)

Chapter 2: Health Center Program Oversight – The oversight section saw a few notable tweaks that health center leaders should note:

• Progressive Action Process Timeline: HRSA updated the timeframe for its progressive action process in addressing non-compliance. The manual now explicitly references 90/60/30/120-day intervals in the progressive action cycle. In practice, this likely corresponds to the typical periods HRSA gives for correcting conditions: for example, 90 days for initial response, an additional 60 days, 30 days, etc., with 120 days possibly being the maximum extension or final deadline. Health center leaders should understand that if a condition is placed on your award, the clock will be ticking per these standard intervals – timely corrective action is critical to avoid escalation.

• Broader Compliance Mandate (Constitutional Protections): The revised Oversight chapter includes new language affirming that HRSA must administer grants in full accordance with the U.S. Constitution and applicable federal statutes/regulations, including provisions protecting free speech and religious liberty. Previously, the manual referenced compliance with “statutory and public policy requirements” (like nondiscrimination, environmental protection, etc.); the new text explicitly adds “constitutional free speech” and “religious freedom protections” to that list. For health centers, this serves as a reminder that no requirement of the Health Center Program can force you to violate fundamental rights, and conversely, that your policies and activities should not infringe on those rights. While day-to-day operations at FQHCs rarely involve First Amendment issues, leadership should be aware of this emphasis – for instance, in policies around patient communications, employment practices, or partnerships, ensure you’re not unintentionally curtailing protected speech or religious expression (as perceived by the current federal administration).

• Generic Systems References: As mentioned, Chapter 2’s references to specific systems like EHB have been scrubbed to be more generic. Practically, this doesn’t change oversight protocols, but if the old manual instructed you to do something “in EHB,” the new one might say “in the prescribed system” or similar. Keep an eye out for updated guidance from HRSA on using GrantSolutions or other platforms for reporting and submissions.

Chapter 3: Needs Assessment – This chapter remains fundamentally the same, with one clarifying point and a minor wording change:

• Needs Assessment Every 3 Years: The manual emphasizes that a comprehensive needs assessment is still required at least once every three years. This is noteworthy because HRSA has been shifting many health center project periods to 4-year periods. Despite this 4-year period of performance, you cannot wait the full four years – you must conduct a needs assessment at least every 3 years. In practice, this might mean doing an assessment mid-project period if you have a 4-year project cycle. Health center executives should mark their calendars accordingly and budget time and resources for this requirement. The needs assessment is a cornerstone for strategic planning and scope adjustments, so maintaining this 3-year cycle ensures you stay responsive to your community’s evolving needs.

• Terminology – “Homeless” vs “Experiencing Homelessness”: The revised text simplifies the language, changing “individuals experiencing homelessness” to just “homeless individuals”. This doesn’t affect compliance expectations, but be aware of the phrasing. (Some may prefer the person-first language; HRSA’s choice here might have been to align with statutory language. In any case, your needs assessment should continue to consider homeless populations if you serve them, regardless of the term.)

Service Delivery and Clinical Services (Chapters 4–5)

Chapter 4: Required and Additional Services – The main update here was the removal of a reference to CLAS standards. CLAS (Culturally and Linguistically Appropriate Services) standards are best practices issued by HHS for providing respectful, understandable, and effective care to diverse populations. The 2018 manual mentioned CLAS, but the October 2025 revision omits this reference. What does this mean? Essentially, HRSA will no longer specifically check for adherence to CLAS standards as a compliance item. However, it does not mean you should drop your focus on cultural and linguistic competence – those principles still underpin many requirements (e.g., accessible services, addressing health disparities). The practical implication is that health centers have flexibility in how they demonstrate they meet the needs of diverse populations without being tied to a particular set of standards in the manual. It’s important to remember that the Site Visit Protocol still requires health centers to demonstrate that they provide culturally competent care and ensure interpreter services and translated materials are available. Additionally, the Office of Civil Rights still maintains the CLAS standards website.

Chapter 5: Clinical Staffing – The revision removed the recommendation to follow CDC immunization and vaccination guidelines. Previously, HRSA encouraged health centers to follow CDC guidelines (for example, for employee or patient immunization practices). The deletion of this recommendation suggests that HRSA didn’t want to imply it’s a strict compliance requirement. From a leadership perspective, it’s still a best practice to follow CDC immunization guidelines as a matter of quality care and risk management, but HRSA reviewers likely won’t be asking to see a policy that explicitly says “we follow CDC immunization schedules”. Ensure your clinical leadership is aware of the change: you have a bit more leeway, but any deviations from public health guidance should be carefully considered and justified clinically rather than by compliance necessity.

Chapters 6 and 7 – These chapters, covering Accessible Locations and Hours and After-Hours Emergency Coverage, had no significant changes in the 2025 update. All previously established requirements (such as having sites and hours that meet patient needs, and having 24/7 access to a clinical advice line or on-call coverage for after-hours) remain in place. Health center operations teams should continue to ensure compliance in these areas as before.

Financial and Administrative Updates (Chapters 11–15)

Several important updates in the manual pertain to financial management, procurement, and other administrative requirements. These changes mostly align the manual with recent federal grants regulatory changes and clarify expectations:

Chapter 11: Key Management Staff – This chapter (which deals with positions like the CEO/Project Director, CFO, CMO, etc.) only saw a minor reference update: citations to certain definitions from 45 CFR 75.2 were changed to point to the HHS Grants Policy Statement. There’s no new position or qualification introduced; it’s more about where one finds the authoritative definition of roles and responsibilities. Compliance-wise, simply ensure you still have the required key staff in place and that HRSA is notified of any change in those roles. No action needed beyond terminology.

Chapter 12: Contracts and Subawards – This chapter contains multiple updates reflecting the latest Uniform Guidance (2 CFR 200) rules for managing federal funds. Key changes include:

• Subrecipient vs Contractor Determination: The manual now directly incorporates language from 2 CFR § 200.331 about how to distinguish a subrecipient relationship from a procurement contract. It emphasizes that not all characteristics may be present in every case and that judgment is required, focusing on the substance of the relationship over the form. Implication: If your health center passes through grant funds to another entity, you must carefully determine if that entity is a subrecipient (carrying out a part of your HRSA project) or a contractor (providing goods/services for your project). This was always required, but the manual now spells out the criteria. Action: Review any agreements with partners – if you haven’t formally classified them as subaward vs contract, do so according to these guidelines, and document the reasoning. This affects monitoring responsibilities (subrecipients require more oversight).

• Allowable Non-Competitive Procurement Conditions: The manual’s list of when you can use non-competitive proposals (sole source procurement) has been updated. A new condition was added: a purchase below the micro-purchase threshold can be non-competitive. This aligns with the Uniform Guidance, which allows small purchases (up to the micro-purchase limit, currently $10,000 by default) without competitive quotes. Other sole-source justifications remain largely the same (only one source available, public emergency, HRSA approval for noncompetitive, or inadequate competition after attempt) – just rephrased for clarity. Implication: Ensure your procurement policy is updated to reflect these conditions. For example, you should have the latest micro-purchase threshold in your policy and state that purchases under that amount do not require multiple bids, while purchases above must follow competitive processes unless one of the specific exceptions applies. Train your procurement staff on these rules so that any sole source purchase is properly justified and documented in line with 2 CFR 200.320.

• Records Retention Requirement: The manual explicitly states that health centers must retain all federal award records for contracts for three years from the date of submission of the final financial report. This is basically the standard federal record retention rule, but calling it out for contract records is a good reminder. Ensure that your document retention policy covers this: contracts, related invoices, procurement documents, and supporting records should be kept for at least 3 years after your final FFR (which usually is the end of the project period). In practice, many health centers keep records longer, but you should not dispose of any grant-related contract records before that 3-year mark.

• Subrecipient Monitoring Duties: Two specific expectations are now highlighted: (1) verify that subrecipients are not debarred or suspended from receiving federal funds, and (2) ensure you resolve any audit findings related to subrecipients. The first means you should be checking SAM.gov (System for Award Management) or equivalent exclusions list before passing through funds to a partner – a step many health centers already do by including a clause in agreements and doing a quick vendor check. The second means if a subrecipient’s audit (or other monitoring) reveals problems (like unallowed costs or control weaknesses), your health center is responsible for working with them to correct issues or recover funds. Implication: If you have any subawards (for example, a partnership with a local agency where you give them some of your grant to perform services), document a subrecipient monitoring plan. Check debarment status for each subrecipient at the start (and perhaps periodically), include language in subaward agreements about compliance and audit requirements, and follow up on their performance and audits. This will likely be probed during HRSA Operational Site Visits if you have subawards.

• Rebudgeting Flexibility: The old manual had a guideline that prior approval was required for budget changes exceeding 25% of the project, reflecting HHS rules at that time. The updated manual removes the specific 25% rebudgeting threshold and instead says to follow the specifics in your Federal Award Notice. HHS has moved toward setting rebudgeting rules in the Notice of Award (NoA) rather than one-size-fits-all. Implication: Read the Terms and Conditions of your NoA for each grant – it will tell you what budget changes require prior approval. Don’t assume you have a 25% wiggle room anymore; it might be more or less, or certain categories might be restricted. Finance staff should be cautious and when in doubt, ask HRSA for approval of significant changes to avoid inadvertent non-compliance.

Chapter 13: Conflict of Interest – The manual adds the phrase “...and board members...” to the list of those who must be covered by the health center’s conflict of interest policy. Previously it talked about officers, employees, and agents; board members were always intended to be included (and a footnote clarified that “agents” includes board members), but now it’s explicitly in the text. For compliance officers, this is a good cue to double-check your Conflict of Interest policy: does it clearly state that board members are subject to it? Do you obtain annual conflict-of-interest disclosures from board members, just as you do for key staff? If not, update your policy and practices. Board members should be educated on their obligation to avoid conflicts and to disclose financial or organizational interests that could conflict with their duty to the health center. This explicit mention will likely also appear in site visit protocols – expect consultants to ask for evidence that board members have signed COI statements. Pro Tip: Include the verification check to confirmation that board members are not employees or related to employees for Chapter 20 compliance on the same annual form.

Chapter 14: Collaborative Relationships – In this section, the wording was adjusted to replace references to “special populations” with “medically underserved”. The context here: Chapter 14 covers how health centers collaborate with other providers or organizations in the community (for example, referral agreements, partnerships to address gaps). The term “special populations” usually refers to groups like people experiencing homelessness, migratory and seasonal agricultural workers, and residents of public housing – which are specifically supported by certain Health Center Program funding streams. By using “medically underserved,” HRSA might be broadening the focus to all underserved groups in the service area. Practically, this doesn’t impose new tasks, but be mindful of the language when documenting collaborations. Ensure you continue to actively coordinate with other agencies to serve not only your special population patients but any underserved populations in the area (e.g., those with limited English proficiency, low-income communities, etc.). It’s about demonstrating that you’re part of a network of care and not working in isolation.

Chapter 15: Financial Management and Accounting Systems – A critical update here is the change in audit requirements: the threshold for requiring a Single Audit (formerly called A-133 audit) has been raised from $750,000 to $1,000,000 in federal expenditures. This change aligns with an HHS Interim Final Rule effective October 1, 2024, which increased the Single Audit trigger to $1 million. For health centers, this means if your organization expends less than $1 million in federal grant funds in a fiscal year, you are no longer mandated by federal law to undergo a formal Single Audit. This could significantly reduce the compliance burden (and audit costs) for smaller FQHCs or Look-Alikes (LALs). Important: This threshold is specifically about federal grant funds, not total organizational budget. Many FQHCs easily exceed $1M in federal funding (considering HRSA grants, plus other federal sources), so most will still need an annual Single Audit. But if you are a smaller health center or just starting out (or perhaps a newly designated Look-Alike with limited federal funding), check your numbers: if you are in the $750k–$1M range, you may be newly exempt from the audit requirement. Leadership should discuss this with the Board finance committee and auditors – you might still opt to do a financial statement audit for transparency or lender requirements, but the more intensive Uniform Guidance compliance audit might not be required. Make sure your finance team is aware of this new threshold so they can plan accordingly and notify your auditors if your federal spend is below $1M. Aside from the threshold change, Chapter 15’s core financial system requirements (having strong internal controls, budget management, segregation of duties, etc.) remain unchanged, so keep those financial guardrails firmly in place.

(Chapters 16, 17, 18: These chapters cover Billing & Collections, Budget, and Program Monitoring/Data Reporting Systems, respectively. The October 2025 revision did not note significant changes in these areas. The expectations for billing policies (sliding fee implementation, collection policies), maintaining a budgeting process, and having data systems for UDS reporting and other monitoring are essentially the same. Compliance teams should continue to ensure these operational aspects meet HRSA standards, even though the manual text is unchanged.)

Governance and Board Composition Updates (Chapters 19–21)

Chapter 19: Board Authority – The revision did not highlight any major changes to board authorities. Chapter 19 outlines the required authorities of the governing board (e.g., holding monthly meetings, approving the health center grant applications and budget, selecting/dismissing the CEO, evaluating the center’s progress, and establishing policies). These remain as is. Ensure your board is still fulfilling all those duties, and that if you are a public agency with a co-applicant board, you’re meeting the special conditions (the manual has notes about co-applicant arrangements). No new actions are needed here except continuing good governance practices.

Chapter 20: Board Composition – This is where we see significant changes aimed at providing flexibility while maintaining patient-majority governance:

• Demographic “Representative” Language Removed: The manual removed the specific requirement that boards be “representative of the individuals being served in terms of demographic factors such as race, ethnicity, and gender” (language that was in the 2018 manual). That clause is gone. This doesn’t mean boards shouldn’t reflect their patient population – they still should – but it acknowledges that strict representativeness can be challenging to quantify. Instead, HRSA added language focusing on having board members with “other relevant expertise” in working with the medically underserved. In practice, this gives health centers a bit more leeway: for example, if your patient population is largely from a certain special population (say, people experiencing homelessness), you formerly were expected to have a board member who is actually a patient from that group. Now, the manual suggests you could have a board member who has expertise in services for the homeless or a history of working in that community, even if they themselves aren’t a current patient. This is “in lieu of requiring a special population board member”. It’s a notable change for special population grantees – you still must have a patient-majority board (51% of members are active patients of the health center), but for the special population aspect, relevant community expertise can substitute for literal representation. This should help centers that struggle to find current patients of a certain demographic willing or able to serve on the board, by allowing community advocates or experts to fulfill the intent.

• Focus on Medically Underserved: As with Chapter 14, Chapter 20 also replaces “special population” terminology with “medically underserved” when talking about board composition. This aligns with the overall direction of being inclusive of all underserved groups in your community, not just those in special population funding categories. Boards should ideally include individuals who understand the needs of various underserved segments of the community.

• Health Center Defines “Reflective” of Patient Population: The updated manual adds a bullet clarifying that the health center itself determines what information (e.g., UDS data) it will use to assess whether its patient board members are reflective of the patient population. This is a helpful clarification. It means HRSA is leaving it to you to decide how to measure and demonstrate that your board’s patient members mirror your patient demographics. For instance, you might use your Uniform Data System (UDS) report data on patient race/ethnicity, income, insurance status, etc., and then compare that to your board’s makeup or experience. If there are gaps (say your patient population is 30% Spanish-speaking but you have no Spanish-speaking board members), you might document that you’re aware and recruiting to fill that gap. The key is you set the standard and method: HRSA will then see if you have a rationale and some effort to achieve a reflective board. This flexibility is welcome – it moves away from a one-size-fits-all checkbox and lets boards use their judgment on representation, as long as they remain compliant with the core requirements (like the 51% patient majority and minimum board size).

• No Change to Waiver Option: The manual still allows for waiver of the 51% patient majority in certain circumstances (for example, for certain migrant or homeless health centers), and nothing indicated that changed in 2025. If your health center has a board composition waiver, continue to follow its terms (e.g., ensuring an appropriate alternative mechanism for patient input). The new “expertise” language doesn’t remove the need for a waiver, but it might influence how you staff the board even under a waiver.

Chapter 21: Federal Tort Claims Act (FTCA) Deeming Requirements – The update notes no changes in the FTCA requirements section. Chapter 21 is essentially a summary of what health centers need to have in place to be deemed as federal Public Health Service employees for malpractice coverage (FTCA). This includes implementing risk management and QA/QI, credentialing providers, cooperative incident management, etc. Though this section was removed from the HRSA Site Visit Protocol several years ago, since nothing new was added or removed, health centers should continue to adhere to all FTCA-related requirements as before. It’s worth mentioning that this chapter’s presence in the manual means HRSA considers FTCA compliance part of overall program compliance (even though operational site visits may handle it separately). Ensure your clinical leadership and risk managers keep documentation of all the FTCA required elements (e.g., risk management plan, proof of licensure and credentialing, ongoing QI activities, etc.). The 2025 manual simply reaffirms these without change.

Appendices and Glossary: A few minor updates here wrap up the manual changes:

• The manual’s Appendix A and citations have been updated to remove outdated references. Notably, a reference to PIN 2007-15 was removed, and a reference to PIN 2024-05 was added. PIN 2024-05 is a recent policy guidance regarding services to support transitions of care for justice-involved individuals (e.g., health centers providing services for people re-entering communities from incarceration). Its inclusion suggests HRSA wants to flag that new policy for health centers (perhaps relevant if you plan to extend services to that population). Removing PIN 2007-15 likely indicates that older guidance has been superseded by newer documents.

• The glossary got a couple of tweaks: the definition of “LEP” (Limited English Proficiency) was refined – possibly to align with current federal language or clarify it – and, as noted, the term “awardee” was replaced with “recipient” in definitions as well. These don’t change obligations but ensure consistent terminology. If you have any internal training materials that define LEP or other key terms, you might update them to match HRSA’s glossary so everyone is on the same page.

The October 2025 revision of the HRSA Health Center Program Compliance Manual may be labeled a “technical update,” but as we’ve outlined, it carries important changes and clarifications for FQHCs. By summarizing the key updates, we’ve tried to give you a clear roadmap of what’s different. More importantly, we’ve delved into the practical implications: what these changes mean for your health center’s operations and what steps you should take to remain compliant and successful under the updated rules.

For health center executives and compliance leaders, the takeaway is this: staying compliant is a dynamic process. Regulations and guidance will evolve, but if you proactively update your policies, train your people, and engage in continuous improvement, compliance won’t be as much of a burden. The 2025 manual changes ultimately reinforce good practices (like prudent financial oversight and responsive governance) that will help your health center thrive.

As you implement the recommended action steps, you’ll not only satisfy HRSA’s requirements but also strengthen your foundation to better serve your community. Keep this momentum going by staying informed and adaptable. And remember, RegLantern is here to help interpret and apply new guidance. Contact us today to see how we can help!