In October 2021, the Center for Medicare & Medicaid Innovation (the Innovation Center) published a white paper outlining its strategic vision and direction of the healthcare delivery system for Medicare and Medicaid beneficiaries through 2030. This included a focus on high-quality primary care, which they identify as the foundation of our health system, to achieve equitable, whole-person, integrated care and outcomes.
Among the priorities, was a call for more accountable care and advanced primary care models to ensure coordinated delivery of holistic, person-centered care within a total cost of care system. This includes adopting alternative payment models that support the delivery of care by multi-disciplinary care teams. While many areas of healthcare are transitioning to multi-disciplinary teams, Federally Qualified Health Centers (FQHCs) have long provided these integrated services.
FQHCs provide essential primary and preventative health services to more than 29 million Americans and provided care to 1 in 6 people covered by Medicaid in 2020.[1] In addition to serving as the primary care medical home for many people, FQHCs also provide critical dental, vision, and behavioral health services.[2] FQHCs are paid fee-for-service (FFS) at a bundled visit encounter rate under the Prospective Payment System (PPS). Unfortunately, the Medicare Economic Index (MEI) that adjusts that rate annually has not kept up with inflation, or with the evolution of FQHC services over the years, often leading to fiscal deficits from serving the Medicaid population.
The PPS only allows reimbursement for face-to-face visits by “billable” members of the care team even when it is clinically appropriate for other providers to deliver those services in a more efficient manner. This limits the use of emerging patient-facing technology and venues that may be more convenient for patients to access.
However, PPS rules also allow for FQHCs to be paid under state and CMS-approved Alternative Payment Models (APMs) if revenue is at least as much as it would have been under PPS. Providers often progress along a glidepath of increasing financial accountability for population outcomes as outlined in the 2017 refresh of Health Care Learning and Action Network (LAN) APM Framework. Categories 1-3 are based on an FFS architecture and Category 4 progresses to population-based payment.
Some payer and provider groups are coming to the realization that layering infrastructure fees and shared savings on a largely unchanged chassis of FFS does not drive robust and focused practice change. Rather, practices largely continue to operate within the confines of FFS, visit-based mentality reimbursement for their direct services. Protecting historical revenue for direct medical and behavioral health services but paying it in a prospective per-member-per-month fee basis allows FQHCs to innovate care models to enhance access to care and improve patient outcomes, utilization, and cost across the continuum of care.
In addition, the COVID-19 pandemic has stressed the healthcare system revealing inequities, inefficiencies, gaps, and access issues in primary care. FFS reimbursement does not provide predictable revenue during times of crisis and service disruption. Patients have become accustomed to accessing some services virtually and have learned to self-monitor some of their conditions with practice support. The convenience of virtual primary care is not a new concept. Kaiser has a well-established virtual care model, and following in its footsteps is a surge of activity in virtual primary care and consumer telehealth investments now competing with traditional brick and mortar primary care providers.
A capitated primary care APM allows for adaptations in how services are offered to patients in the most convenient fashion for them and to allow better use of the full care team as clinically appropriate to improve patient health outcomes and experience.
The collaborative care model, originally designed to manage depression using clinically licensed staff, has been expanded to other chronic conditions such as hypertension and diabetes and by using other non-billable care team members trained in the model. In addition, new technology, including apps that automate patient monitoring and communication, are now readily available. Utilizing nurse triage, patient portals for care, and other innovations can improve patient outcomes and reduce avoidable costs.
A growing number of state primary care associations and their FQHC members are forming clinically integrated networks (CINs) to contract for shared savings and/or risk and are pursuing capitated APMs to underwrite new models of care so they can succeed under those arrangements and garner market share.
HMA has engaged with primary care associations in many states and offers educational sessions, help creating and operationalizing CINs, facilitating APM model development and negotiating value-based payment arrangements with payers. The HMA team, Dr. Art Jones, Caitlin Thomas-Henkel, Joe Moser and Juan Montanez have deep expertise in FQHC management and value-based care and payment.
Primary care associations may consider exploring a primary care APM to:
- Improve predictability of revenue stream and cash flow
- Move away from strict reliance on face-to-face visits as payment
- Support practice transformation including use of a broader “non-billable” workforce
- Improve member-centric access to primary care
- Facilitate care for a larger population via larger PCP panel sizes without increasing that primary care provider’s visit volumes
- Reward health centers for improved outcomes
Align with any opportunity for shares savings and/or shared risk for the cost of healthcare services beyond primary care.
For more information about FQHC APMs, contact our experts below.
[1] HRSA, 2022: https://bphc.hrsa.gov/about/healthcenterprogram/index.html#:~:text=In%202020%2C%20more%20than%20255%2C000,of%20patients%20served%20since%202000.
[2] IBID
