The FQHC PPS rate is the per-visit amount Medicare pays a health center for a qualifying encounter, set from a national base rate and then adjusted for location. For calendar year 2026, the national base FQHC PPS rate is $207.72 — a 2.5% increase over the 2025 rate of $202.65, driven by the FQHC market basket inflation measure.
What adjusts the FQHC PPS rate
The national base is only the starting point. CMS adjusts each center’s FQHC PPS rate by a Geographic Adjustment Factor (GAF), based on the same geographic cost indices used in the Medicare Physician Fee Schedule. Centers in higher-cost areas receive more; those in lower-cost regions receive less. Knowing your specific GAF is essential for accurate revenue forecasting.
Two other rules shape what you actually collect. First, Medicare pays the lesser of your charges or the adjusted PPS rate, so charges set too low cap your reimbursement below the rate you’ve earned. Second, the rate increases by 34.16% when the patient is new to the FQHC or receives an Initial Preventive Physical Exam (IPPE) or Annual Wellness Visit (AWV).
Medicaid works differently
Medicaid uses a per-encounter model too, but each center’s Medicaid FQHC PPS rate is cost-based and set by the state from a cost report, then adjusted annually. States may use Alternative Payment Methodologies as long as total reimbursement is equivalent, which creates real variation across markets in how the rate is calculated and documented.
Because the FQHC PPS rate drives nearly all encounter revenue, small errors compound fast. Undercharging, missing the new-patient enhancement, or misapplying the GAF each quietly reduce the rate you collect on thousands of visits a year.
Want to confirm you’re capturing your full FQHC PPS rate on every encounter? Squadyen will review your charge capture and rate application — request a free assessment.