Payment and Delivery Reform

Health care delivery systems and payment models are transforming rapidly to try to improve the patient experience and population health while reducing system costs. For health centers, this can encompass all of the activities designed to best align health center payment with practice – allowing health centers to sustain their critical mission to provide high quality, cost-effective care to all who need it while working to become the provider of choice in their communities.

Below, see how health centers are engaging in new and innovative payment reforms and their impact on how health centers deliver care.

Quick References

NACHC Issue Brief: Health Centers and Payment Reform, A Primer
NACHC Issue Brief: Navigating and Advancing Health Center Payment Reform: Lessons from Primary Care Association
NACHC’s Payment Reform Readiness Assessment Tool (Hardcopy .PDF Version)
NACHC’s Payment Reform Readiness Assessment Tool (Online Version) 

Helpful Resources

NACHC Webinar: Making Strides in Payment and Delivery Reform
NACHC Issue Brief: Health Center Payment Reform: State Initiatives to Meet the Triple Aim
NACHC Issue Brief: Increasing Private Payment Rates to Health Centers in Hawaii

Pathways to Payment & Delivery Reform

FQHC Alternative Payment Methodologies

To allow for increased flexibility, the law allows states to design and implement an alternative payment methodology (FQHC APM) so long as:

  • The total FQHC APM reimbursement is not less than what the FQHC would have received with the FQHC PPS methodology;
  • Each participating FQHC individually agrees to the FQHC APM; and
  • The FQHC APM is documented in the state’s approved Medicaid State Plan.

As of 2017, over 20 states have chosen to use a FQHC APM to reimburse health centers for primary care and preventative services provided to Medicaid patients. An increasing number of health centers, in partnership with their state-level colleagues, are utilizing the flexibility within federal Medicaid law to develop FQHC APMs that allow for a more transformative use of the medical home.

Helpful Resources

NACHC Toolkit: Fundamentals of Developing a Capitated APM
NACHC Case Study: Oregon’s Alternative Payment and Advanced Care Model
NACHC Case Study: California’s APM Pilot
NACHC Case Study: Washington

State Payment & Delivery Reform Efforts

In addition to reforms specific to health center payment, health centers are also engaging in a variety of broader payment and delivery reform initiatives. Learn about these efforts and the role health centers are playing.

2703 Health Homes

Created as part of the Affordable Care Act, the Section 2703 Health Homes program (now in operation in 20 states and the District of Columbia) aims to create new opportunities through Medicaid to boost health services to beneficiaries, especially people who suffer from complex health care needs (such as mental health, substance abuse, asthma, diabetes and heart disease). To be eligible, Medicaid beneficiaries must have or be at risk for two or more chronic conditions.

Read NACHC’s issue brief to learn more about Section 2703 Health Homes and Health Centers.

Many states are connecting their Health Homes program to other initiatives to provide enhanced support to targeted patient populations. Learn about how a health center in New York is participating in a pilot that focuses on justice-involved patients.

State Innovation Models

The State Innovation Models (SIM) Initiative was launched by the Center for Medicare and Medicaid Innovation in 2012. SIM was a targeted effort to accelerate broad scale development and testing of new service delivery and payment models that have the potential to increase the quality of health care while lowering total costs.

Read NACHC’s issue brief State Innovation Models: Roles, Opportunities and Challenges for Health Centers in Statewide Healthcare Transformation. 

Health Center and Hospital Partnerships

In the emerging landscape of value-based care, health centers and hospitals are exploring new partnerships to improve health outcomes and patient experiences while reducing system costs.

Emergency Department Coordination

Many health centers and hospitals have identified reducing avoidable ED use as a key area for collaboration. Explore the following resources to learn more:

An issue brief that provides an overview of strategies to reduce ED utilization, federal and state initiatives, and case studies of health centers that have implemented ED care coordination programs.

A fact sheet summarizing important legal and policy issues that are key to successfully establishing ED care coordination programs for health centers.

Access to Specialty Care

Increasing Access to Specialty Care through Collaboration: eReferral and eConsult