Case Study: How a Multi-Site FQHC Passed Its HRSA Operational Site Visit Without Conditions

Last updated: April 2026

Client details are presented in anonymized form consistent with IHS confidentiality obligations. Bracket placeholders indicate where client-specific data will be inserted prior to publication.

Client Overview

Organization type: [Section 330 FQHC awardee / FQHC Look-Alike]
Location: [State]
Number of sites: [X service delivery sites]
Patients served annually: [X]
Payer mix: [X% Medicaid, X% uninsured/sliding fee, X% Medicare, X% commercial]
Reason for engagement: [Upcoming scheduled OSV / Conditions from prior OSV requiring remediation / Look-Alike Initial Designation OSV preparation]
Prior OSV history: [No prior OSV — new organization / Prior OSV received [X] conditions / Prior OSV clean]
Engagement start date: [Month, Year]
OSV date: [Month, Year]
Outcome: OSV completed without conditions

The Challenge

[Health center name] engaged IHS [X months] before their scheduled HRSA Operational Site Visit. The organization had [describe baseline — e.g., "operated for X years without a formal compliance review infrastructure" or "received X conditions in its previous OSV three years prior and was approaching the renewal cycle with unresolved governance vulnerabilities"]. A preliminary internal review by the CEO identified [describe initial concerns], but the organization lacked the specialized knowledge to assess the full compliance picture against the October 2025 HRSA Compliance Manual — the first major update since 2018.

Three specific challenges defined the engagement:

1. Board Composition and Governance Documentation

The organization's board had [X] members, of whom [X] were documented patient members — [meeting / falling short of] the 51% patient majority requirement. Of the patient board members, demographic documentation confirming they were representative of the community served was [incomplete / absent] for [X] members. Additionally, board meeting minutes from [X] of the prior [X] quarters lacked documented voting outcomes on required agenda items — a Chapter 19 exposure in addition to the Chapter 20 composition question.

2. Contract Compliance Under the October 2025 Manual Update

[Health center name] had [X] active clinical contracts, all drafted under the pre-2025 regulatory framework referencing 45 CFR Part 75. The October 2025 manual update replaced all 45 CFR Part 75 citations with 2 CFR Part 200 references and raised the micro-purchase threshold to $50,000. Of the [X] contracts reviewed by IHS, [X] did not include required federal provisions under the updated 2 CFR Part 200 standard, and [X] contracts involved procurement amounts between $25,000 and $50,000 that fell under the old micro-purchase threshold but not the new one — requiring re-evaluation of the competitive bidding documentation.

3. Credentialing File Deficiencies

IHS conducted a 100% audit of credentialing files for all [X] Licensed Independent Practitioners. [X] files were missing National Practitioner Data Bank (NPDB) query documentation from the hire date. [X] files had primary source verification of licensure that was more than [X months] past required renewal date, indicating the credentialing cycle had lapsed. HRSA OSV assessors audit LIP files directly — missing NPDB documentation in a single file can generate a Chapter 5 condition.

IHS's Approach

Phase 1: Readiness Assessment (Weeks 1–3)

IHS conducted a systematic review against all 21 compliance manual chapters using the October 2025 HRSA Compliance Manual and the November 2025 updated Site Visit Protocol. The assessment reviewed board meeting minutes for [X] quarters, [X] clinical contracts, [X] LIP credentialing files, [X] quarters of QI committee documentation, the sliding fee schedule and [X] patient billing records, financial management documentation including the most recent Uniform Guidance single audit, and Form 5A scope documentation against current service delivery.

IHS produced a conditions-risk rating for each of the 21 compliance chapters, identifying three conditions-level risks (Board Composition, Contracts, Credentialing) and [X] finding-level concerns requiring documentation updates. The risk report was presented to the CEO and Board Chair at week 3, with a phased remediation plan and internal resource requirements for each item.

Phase 2: Board Governance Remediation (Months 1–3)

IHS worked with the Board Chair to audit the board composition roster against the patient majority requirement and demographic representation documentation. [X] existing patient board members had incomplete demographic documentation — IHS developed a demographic verification protocol and the Board Chair conducted outreach to complete the documentation for each member. [One vacancy / Two vacancies] existed on the board; IHS provided governance guidance on the recruitment process for patient board members meeting HRSA's demographic representation requirements.

IHS reviewed [X] quarters of board meeting minutes and identified [X] meetings where voting outcomes were not documented. The Board Secretary received a board minutes template from IHS that embedded all required documentation elements — agenda approval, quorum confirmation, voting outcomes with names, and follow-up action items — into the standing meeting format. Retroactive documentation was completed for [X] meetings within the prior 12 months where the record was recoverable.

Phase 3: Contract Compliance Update (Months 1–2)

IHS reviewed all [X] clinical contracts against 2 CFR Part 200 federal provision requirements. [X] contracts required addenda to incorporate updated required provisions. IHS drafted the addenda language and provided the legal counsel review checklist for the organization's attorney. For the [X] contracts in the updated micro-purchase threshold zone ($25,000–$50,000), IHS reviewed the procurement documentation to confirm competitive bidding requirements had been met or documented rationale for sole-source justification existed.

Phase 4: Credentialing File Remediation (Months 2–4)

IHS obtained NPDB queries for all [X] LIPs with missing initial hire documentation. For [X] LIPs with lapsed primary source verification, IHS initiated the re-verification process through the appropriate licensing boards and documented each step. A credentialing calendar was established in [organization name]'s [HR system] with automated alerts at 90-day, 60-day, and 30-day intervals before each LIP's credentialing renewal date — preventing the lapse pattern from recurring after the OSV.

Phase 5: Mock OSV (Month [X])

IHS conducted a full mock site visit across [X] service sites over [X] days. Staff interviews were conducted with [X] individuals across governance, clinical, financial, and administrative roles — simulating the HRSA reviewer interview process including the types of follow-up questions that HRSA assessors commonly use to probe governance independence and QI program functionality. Documents were audited under survey conditions. A verbal debrief was provided on the day of the mock, followed by a written remediation report covering [X] items.

The most significant finding from the mock survey was [describe — e.g., "the QI program's clinical leader designation was documented in the QI plan but the designated individual could not articulate the QI committee's current improvement priorities during a simulated staff interview — indicating that the governance paper trail and the operational reality were misaligned"]. IHS worked with clinical leadership to close this gap over the [X] weeks following the mock survey.

Phase 6: Final Preparation (Final 30 Days)

All mock OSV findings confirmed remediated. Document production organized for efficient HRSA reviewer access. Board Chair and CEO briefed on entrance and exit conference protocols. [X] staff members received targeted interview preparation focused on their specific roles in HRSA's assessment framework. Dr. Goddard reviewed the full document production package before the OSV date.

Outcome

[Health center name] completed its HRSA Operational Site Visit in [Month Year] with no conditions cited. The OSV outcome included:

[X] findings (minor documentation items) — all below conditions threshold
No corrective action plan required
HRSA reviewer commendations noted for [describe — e.g., "the completeness of the board meeting minutes documentation and the clarity of the sliding fee schedule application in patient billing records"]

Downstream Impact

HRSA good standing: [Organization name] qualified for [California DHCS Advanced APM / North Carolina CMHN PPA / other] participation within [X days / months] of the OSV outcome
340B access maintained: Continued uninterrupted 340B program participation — estimated annual savings of $[X] to the organization's drug acquisition costs
Rural Health Transformation Program: [If applicable — organization submitted application for $50B Rural Health Transformation Program funding with HRSA good standing documented]
Governance infrastructure: Board composition tracking system and meeting minutes template remain in use; board has maintained 51% patient majority with full demographic documentation through [X quarters] post-OSV
Credentialing system: Automated LIP credentialing calendar has prevented any recurrence of primary source verification lapses through [X months] post-OSV

Key Lessons for FQHCs Preparing for HRSA OSV in 2025–2026

Update Every Policy Referencing 45 CFR Part 75 Before Your Next OSV

The October 2025 HRSA Compliance Manual replaced all 45 CFR Part 75 citations with 2 CFR Part 200 references. Organizations preparing for OSV with pre-2025 policies still citing the superseded regulation present an immediate documentation deficiency. The update is mechanical but must be comprehensive — every policy, every contract addendum, every procedure manual that references 45 CFR Part 75 must be updated before survey.

Board Governance Problems Cannot Be Fixed in the Last 30 Days

Board composition deficiencies — missing patient members, incomplete demographic documentation, vacancies — cannot be remediated in a 30-day sprint before survey. Recruiting qualified patient board members, completing demographic verification, and documenting board authority in meeting minutes all require lead time. IHS recommends beginning board governance assessment at least 6 months before a scheduled OSV for any organization that has not maintained rigorous ongoing documentation.

HRSA Assesses What You Do, Not What Your Policies Say

The mock survey finding about the QI clinical leader who could not articulate the organization's current improvement priorities illustrates a pattern IHS sees repeatedly: organizations develop strong policy documentation for HRSA compliance without operationalizing the governance structures those policies describe. HRSA assessors interview staff — they do not just review documents. The operational reality must match the paper trail.

A Full LIP File Audit 90 Days Before Survey Is Non-Negotiable

Primary source verification retrieval, NPDB query processing, and background check documentation recovery all take time. Starting the LIP file audit with 30 days to survey does not leave enough time to resolve deficiencies before HRSA reviewers open the first file. IHS conducts 100% LIP file audits as a standard component of every FQHC OSV engagement — and begins that audit in the first month of the engagement, not the last.

Is Your FQHC Preparing for an HRSA Operational Site Visit?

Schedule a no-obligation readiness assessment with Thomas G. Goddard, JD, PhD. IHS will assess your compliance posture against the October 2025 HRSA Compliance Manual and give you a clear roadmap to a conditions-free OSV.

Schedule Your FQHC OSV Readiness Assessment