Revision 25-3; Effective Nov. 14, 2025

Categorical Reimbursement

Primary Health Care (PHC) categorical funding or cost reimbursement is used to develop and maintain grantee infrastructure to provide primary health care and related health services. The funding can be used to support clinic facilities, staff salaries, utilities, medical and office supplies, equipment, travel, and direct medical services. All services are reimbursed on a cost reimbursement basis. Costs may be assessed against any of the following categories in the submitted budget workbook:

• Personnel
• Fringe Benefits
• Travel
• Equipment and Supplies
• Contractual
• Other
• Indirect Costs

PHC funds are disbursed to grantees through an invoicing system as expenses are incurred during the grant period. Grantees must submit a Monthly Reporting Packet (MRP) for cost reimbursement of approved categorical budget(s). When the total award is expended, no more funds will be available to the grantee for reimbursement. When program expenses exceed program income, the invoice results in payment. Program income includes all fees paid by PHC program clients, client copay collection, and non-HHSC funds such as grants and donations.

Accurate financial records must be maintained for quality assurance, fiscal monitoring, and programmatic evaluation by HHSC.

Budget Workbook

The grantee completes and submits a budget workbook at the beginning of each new fiscal year. The grantee’s total approved budget award includes the allocated individual budget categories listed on Form B – Budget Summary.

Budget revisions requested throughout the year must be submitted to HHSC for approval.

For budget workbook revision requests, the grantee submits requests directly to the assigned contract manager. Include the initial approved budget workbook and the revised budget workbook, along with the justification for the revision in the submission.

Monthly Reporting Packet (MRP)

At the start of each fiscal year, the prepopulated MRP, forms MR, 4116 and Monthly Performance Report, are sent by email by the reimbursement officer. The MRP and the required supporting documentation, which must include a detailed general ledger and any documents that support the requested reimbursement, must be completed and submitted monthly within 30 calendar days after the last day of the preceding month. The submissions not received on time require justification. MRPs that are incomplete or incorrect are returned for corrections. All corrections are due within five business days.  Altered MRP’s are not accepted.

Grantees must continue to submit the MRP even after the grant award amount was expended. Reflect any expenditures over the grant award after deducting program income under Non-HHSC Funding.

Reconciling Errors on Previously Submitted MRPs

Incorrect or missing information that requires clarification or follow-up by HHSC staff may delay payment. A response is required within five business days of the initial outreach to the grantee. If expenses are overstated on one month’s invoice, reduce the following month’s expenses accordingly. If a MRP requires a correction, grantees should resubmit a corrected MRP with supporting documentation as a new email submission to HHSC HDS ADS. A revised MRP is applicable if an initial submission was already processed and reimbursed to the grantee but requires correction.

Supplemental MRP

Instances happen that result in missed reporting of a prior month’s services not billed yet to PHC. Any expenses incurred prior to the current service month must be submitted as a supplemental MRP, with a separate MRP for each service month applicable. Submit the MRP to HHSC HDS ADS. Include supplemental in the email message subject line. Select supplemental on the MR tab Voucher Type cell dropdown list.

Submission of Final MRP

Grantees may have more reimbursable costs to submit, after the submission of their initial August MRP. Any other reimbursement request must be received by Oct. 15. Mark this as FINAL.

Reimbursement requests submitted over 45 calendar days after the contract term end will not be paid. If the 45-day deadline falls on a weekend, the final invoice and MRP must be submitted prior to this date.

Quarterly Submission Requirements

In addition to the monthly submission requirements, the following must be submitted quarterly:

• Form 225, section B - Service Category (Quantity/Amount); and
• signed Financial Status Report (Form 269A).

Quarterly requirements are due by the last business day of the month following the end of each quarter. The exception is the final quarter, which is due 45 calendar days after the end of the contract period or Oct. 15.

End of Fiscal Year Submission Requirements

In addition to the monthly and quarterly submission requirements, the End of Fiscal Year Reporting (Form PHC 325) must be submitted.

Find Form PHC 325 on the Family Clinical Services Contractor Portal under Primary Health Care. Yearly requirement is due within 60 calendar days of the end of the fiscal year.