Welsh Mountain Medical & Dental Center will use the money toward a dental clinic it is planning in Lebanon County, spokesman Fred Bogner said.
Welsh Mountain opened Lebanon Ridge Community Health last year, and since then has been looking to build a companion facility for dentistry, Bogner said.
"The facility we're in now wouldn't accommodate both, so we're looking for a site that would accommodate dental and give us room to grow," he said.
The grant was one of 398 announced Tuesday by the Department of Health and Human Services. In all, the department made awards totaling $728 million.
The federal health care reform law passed in 2010 allocated $9.5 billion to expand community health services over five years and $1.5 billion more for construction and renovation projects, according to the department.
The money is supporting 675 addition and renovation projects and the construction of 312 new sites, the department said, adding that health clinics serve 20 million Americans.
Welsh Mountain was founded in 1972 and is located in Salisbury Township near New Holland. In 2011, it provided $4.7 million in care, including $2.2 million in free care to uninsured patients who could not afford to pay, Bogner said.