Supporting Federally Qualified Health Center Participation in Value-Based Payment to Improve Quality and Achieve Savings

Abstract

In its Innovation Center Strategy Refresh, the Centers for Medicare & Medicaid Services (CMS) included the goal of moving, by 2030, 100% of traditional Medicare beneficiaries and “the vast majority” of Medicaid beneficiaries into accountable care arrangements in which providers are paid based on quality care, health outcomes, and costs. However, federally qualified health centers (FQHCs), which provide care to 1 in 11 people in the United States, have largely been left out of value-based contracts. Medicaid managed care organizations, which operate these programs for most state Medicaid agencies, have presented several barriers to participation, and the complexity of FQHC payment policy creates additional challenges. This report outlines these barriers and highlights FQHC networks that are having success with value-based payment. The authors offer guidelines on designing successful value-based payment contracts for FQHCs and recommend action steps for CMS, state Medicaid agencies, and FQHCs that will enable more of these safety-net providers to participate in value-based care — and realize savings as well as improved quality for patients.