Avoiding Costly Legal Mistakes: Essential Risk Management For Federally Qualified Health Centers with Attorney Matt Evans

Jill Steeley interviews Matt, Founder and CEO of Provider Legal and former FQHC in-house counsel, on managing critical risks that threaten health center budgets, including FTCA claims, cybersecurity, and employment litigation.

Key Risks and Traps:

• Most Expensive Risks: FTCA claims, cybersecurity breaches, employment litigation, HRSA violations, and vendor contract failures. Addressing these is essential for reducing the cost of care.
• The "We've Always Done It That Way" Trap: Stagnation in areas like billing, ancillary programs (e.g., behavioral health, dentistry), and HR creates vulnerabilities and compliance issues.
• Third-Party Vendor Risk: FQHCs rely on vendors for complex compliance (340B, billing). Review contracts rigorously, focusing on indemnification and clear compliance responsibilities.

Employment Law Minefield (High-Frequency Risk):

1. Toxic Longevity: Long-tenured staff (20-40 years) can create a toxic, non-compliant culture if unmanaged. Movement is safer and healthier for the organization.
2. Leave Law Mess-Ups: Complex, emotionally charged regulations are often mishandled, especially in isolated rural sites.
3. Lack of Clear Job Descriptions: Rushed C-Suite hiring without defined success metrics leads to problems six months later.
4. Remote Work: The law of the employee's location (state/city) applies, creating complexity for non-local FQHCs.

Legal vs. HR: Lawyers seek the least costly solution; HR focuses on culture. Both are vital. Involve legal counsel immediately for high-risk issues like sexual harassment or discrimination. The true cost of compliance failure is the opportunity cost of what you could have achieved instead.

Board Oversight & Growth:

• Board personality dictates problem type. Intentional composition and term limits are healthy for preventing operational overreach and stagnation.
• New Services require rigorous due diligence and contract review (indemnification, representations).
• Hospital Partnerships (EMR/Data Sharing) and MOUs require extreme caution; FQHC MOUs have significant reputational and compliance weight.
• Mergers/Affiliations depend on establishing operational and value fit upfront.

Emerging Risks for 2026: Increased political, economic, and workforce uncertainty will compound stress, leading to more "BS" employment and malpractice claims. However, FQHCs are better prepared and more sophisticated than ever, with technology helping to fill gaps.

Action: Review employment policies, vet vendor contracts for indemnification, assess remote work legal implications, and prepare for site visits four months in advance. Don't wait for a problem—get good counsel.