HHS Just Funded 415 New Primary Care Sites. The FQHC Model Works Differently from DPC — and the Distinction Is Worth Understanding.

On August 13, the federal government announced $102 million in grants to open 415 new primary care sites, with the goal of reaching nearly 1 million more Americans. Secretary Kennedy described it as the first major expansion of the Health Center Program since 2019, and his words in the official press release framed the investment around bringing “high-quality care to nearly one million more Americans” while helping communities “tackle chronic disease at its roots.”

The FQHC compliance rules require health centers to bill Medicare, Medicaid, and other payers. The DPC Alliance defines DPC practices as those that “do not bill insurance for clinical services rendered.” The two approaches rest on opposite payment premises.

That is not a criticism of the investment. It is a fact about two different institutions trying to solve the same problem through fundamentally different means. DPC physicians who are regularly asked about affordability and access — and asked why the model does not serve every patient — would benefit from understanding what the federal government just funded, how it works, and where it fits alongside what DPC has been building.

What HRSA Health Centers Actually Are

The grants come through the Health Resources and Services Administration’s New Access Points program, which funds Federally Qualified Health Centers — FQHCs. These are community-based primary care clinics that receive federal grants to operate as a condition of serving patients regardless of their ability to pay. In exchange, they are reimbursed under a distinct payment methodology — a Prospective Payment System rate — for Medicaid and Medicare services, may qualify for malpractice coverage through the Federal Tort Claims Act upon receiving HRSA deemed status, and must comply with federal requirements around governance, services, and reporting.

FQHCs are still inside the billing system. They bill Medicaid, Medicare, and private insurance, with Medicaid accounting for roughly 45 percent of total health center revenue in recent years. Section 330 federal grants supplement that revenue, helping fund care for patients who cannot pay. Roughly 90 percent of FQHC patients have household incomes at or below 200 percent of the federal poverty level. About half of patients are covered by Medicaid; roughly 18 percent are uninsured.

The Health Center Program is not new. It has operated for more than 60 years. HRSA health centers already serve 32.7 million patients at more than 16,000 sites nationwide — the highest patient count in the program’s history, as reported by HHS earlier this year.

The FY 2026 awards went to 158 recipient organizations across the country, expanding the program’s reach into new medically underserved communities.

How the Economics Compare to DPC

Here is where the two models diverge sharply, and why they are not in competition.

A DPC practice does not bill insurance for clinical services rendered. Patients pay a flat monthly membership fee — the 2026 DPC Alliance report puts average monthly fees by practice category in the range of roughly $78 to $114 per member, with a national average across all categories of $98.64 — and the physician handles primary care needs outside the insurance billing system. The physician’s revenue comes from members. A practice with 500 members at $90 per month has simple, predictable revenue and minimal overhead because claims management does not exist.

An FQHC physician’s revenue flows from insurance billing plus a federal grant, and the practice must comply with grant reporting requirements and quality measurement benchmarks. The clinic may employ billing specialists, care coordinators, and compliance staff. The subsidy makes care accessible to patients with no ability to pay, but the structural complexity of the FQHC model looks more like a hospital-adjacent institution than a solo DPC practice.

Neither model is wrong. They serve different markets with different needs.

The Problem They Share

What Secretary Kennedy said about the investment echoes something the DPC community has been saying for years. The goal, Kennedy stated in the press release, is to “expand prevention and nutrition services” and “help communities tackle chronic disease at its roots.” HRSA Administrator Tom Engels described the aim as bringing affordable primary care to communities across the country.

Those are DPC’s talking points, rewritten for a federal grant announcement.

Both FQHCs and DPC practices exist because the standard fee-for-service primary care model does not support the kind of longitudinal relationship primary care requires. Research on conventional panel sizes finds observed primary care panels of 1,200 to 1,900 patients — well below the 2,500 figure commonly cited, but still far above what DPC practices carry. The 2026 DPC Alliance report, drawing on survey data from 465 physicians, found that full DPC panels cluster between 400 and 700 patients. The gap in panel size reflects the difference in how each model makes longitudinal care financially possible.

The federal government and the DPC community agree on the diagnosis. They are running different experiments on the treatment.

One Geographic Data Point Worth Noting

The most specific geographic detail available from the August 13 announcement: California received 27 of the 158 NAP awards, totaling over $17 million — the largest allocation of any single state, per reporting from the event in Atwater where Kennedy made the announcement.

California also has meaningful DPC representation. The BestDPC national clinic directory shows 59 listed DPC clinics in California, placing it fifth by raw clinic count behind Texas (171), Florida (167), North Carolina (81), and Colorado (61). So the state that received the largest NAP allocation is also among the most DPC-active. Whether the same pattern holds in other states would require the full recipient list broken out by state, which was not accessible from a secondary source at the time of publication.

What is established from existing FQHC data is that the Health Center Program already has a strong rural presence. Rural Health Information Hub documents FQHCs operating across rural communities, providing care regardless of patients’ ability to pay. The NAP program expands that network further into medically underserved communities.

What This Means

The $102 million announcement is what Secretary Kennedy called the first major Health Center Program expansion since 2019 — a concrete commitment to primary care access that DPC has been making through market means since the model’s earliest practices opened over a decade ago.

DPC arrived at the same conclusion and started building practices around it, without a government grant. The Hint Health 2026 DPC Trends Report documents 837 percent membership growth since 2017, drawing on data from over 2,700 DPC clinicians and approximately 1.4 million members — a market that built itself on monthly fees and word of mouth while the government was doing other things.

Now the government is doing the same thing it can do: funding access where the market will not go on its own, because the patient population cannot pay a market fee.

For DPC physicians, the investment is useful in three ways. It answers the question patients and journalists sometimes ask — “what about people who can’t afford DPC?” — with a factual, non-defensive answer: there is a parallel federal system designed for that population. It validates the primary care access argument that has animated DPC since the beginning. And it demonstrates that the two models are complementary: neither is trying to be the other, and both are needed to address the full range of Americans who currently lack reliable primary care.

Two instruments, different economics, same problem. Both are needed.