The FQHC Landscape

FQHCs – despite their unique funding structure – are not immune from the transition to value-based payments. Some states in fact have sought to accelerate the move – under careful Federal guidance – to value-based payment models to better align the incentive infrastructure within the FQHC area to the incentive structures being developed elsewhere in the health care industry. States such as Colorado and Oregon have made tremendous strides in making this move and many others are – in fact- in the process of analyzing or implementing value-based models for FQHCs either in isolation or as part of Medicaid transformation projects.

Despite the obvious fee-for-service prejudice due to the original statutory requirements when FQHCs were created by Congress, the centers have been engaging in many of what most observers would call value-based behaviors. For example, FQHCs often have behavioral health services, they are often actively seeking or are already PCMH certified, and they provide additional social supports – e.g., assistance in accessing social services and support tools for those with limited health literacy. These are all tools and processes that other areas of the health care sector will need to adopt – if they haven’t done so already – if they are to be successful in a value-based world. Thus, the work that FQHCs have undertaken – while considering the heavy emphasis original place on fee-for-service – has prepped them to engage in value-based initiatives; nevertheless, there is still a lot preparatory work that FQHCs must undertake before they can be successful in such initiatives.

FQHC Value-Based Examples

The Medicare, Medicaid, and SCHIP Improvement Act of 2000 required that FQHCs be reimbursed by either the prospective payment system (PPS) which is a fee-for-service model or by an APM or alternative payment model. An alternative payment model is largely synonymous with a value-based payment model. The caveat, however, with the allowance for an APM/value-based program is that the FQHCs individually must consent to participate in such a model, and the payments must be greater than or equal to the payments they would have been entitled to under the standard PPS model.

Colorado has been one of the states that pioneered FQHC alternative payment models. The State has been in the process of implementing an APM that replaces one of the add-on payments to the FQCH structure call the 1202 bump. FQHCs will still receive their prospective payments; however, there will now be add-on incentives to encourage higher quality care delivered more efficiently. The purpose of the reform was to align with other payment reform activities, encourage investments into primary care – which research as shown will lower other, more costly expenditures in the future – and to reward performance and incentivize accountability. The program works by establishing a set of outcome and process-based metrics. There will then be financial rewards for high performers.

Oregon, another state that pioneered FQHC payment reform, sought out a different model. It, instead, established collaborative care organizations (CCOs) which are essentially state versions of ACOs. What differentiates it from most Medicare ACOs is that the CCOs accept full risk. They then contract with the FQHCs to provide services with an agreed upon payment framework. The model also has metrics to encourage primary care medical homes and the Triple Aim (lower costs, increased quality, and an improved patient experience).

How FQHCs Should Prepare for Value-Based Care

Individual FQHCs, however, do not need to wait for their state to act to prepare for value-based payments as there are many process improvement activities that can begin immediately. In fact, in many cases, well-managed FQHCs may have some advantages over groups such as ACOs in preparing to transition to value-based payments as many already have experience with integrating behavioral health, oral health, and providing access or assistance in accessing social services.

Initially, FQHCs should ensure that they have sound processes in place to track test results (and ensure that ordered tests are completed), chart prep processes in place to monitor for preventative quality measures – e.g., depression screening, fall risk screening for the elderly, and weight/nutrition counseling – and they ought – if they don’t already – have processes in place to monitor for patients that are due to physicals or well-child exams.  LEAN is another process improvement undertaking that FQHCs can undertake to prepare for payment reform.

Medical practices can use LEAN to map out their current processes to identify waste and inefficiencies; subsequently, they can achieve organizational buy-in to modify the deficient processes to free up resources for more productive uses. Practices have used LEAN in the past to speed up check-in, increase patient satisfaction, and increase physician time with patients.

Outside of the operational processes and procedures, Information Technology is an area where FQHCs can achieve tremendous efficiencies while also preparing for payment reform. Using IT to better manage care transitions is probably the biggest initial win that can occur. Many hospitals are part of one or more Health Information Exchanges (HIEs). FQHCs can collaborate with the exchanges to use the exchange’s tools to receive ADT – admission, discharge, and transfer – data when one of their patients is discharged from an inpatient facility. This real-time information will allow the FQHC to more quickly manage transitions of care, schedule follow-up visits, and monitor for frequent ER utilization. If care management resources exist within the FQHC, stratification processes can be built into such monitoring to – for example – refer a patient to care management if they use the ER a certain number of times over a given period – e.g., three times in six months.

In addition to interacting with local or state-level health information exchanges, the use of national services such are Commonwell/Carequality can provide additional data to FQHCs. If the FQHC’s EMR vendor supports such an initiative, enabling the service will allow them to receive data on their patients from any facility that also has data on that patient. If local and regional hospitals are using it, the FQHC can then – in a format that can be imported directly into the EMR –  receive up-to-date medication, allergy, and problem lists. This will save the organization from having to manually input such clinical information and reduce the likelihood of transcription errors.

What next?

If an FQHC is interested in participating in value-based payment, the most obvious initial step is to see their state is with such payment reform. If one exists, a thorough examination of the program’s requirements against the FQHC’s existing strategic plan. If it is a good, a planning process should likely commence to begin determining what is needed to both apply for the program and to be successful with it.  Regardless of where the state is with the planning for value-based payment models for FQHCs, if one wants their organization to be ready to achieve success with such models, beginning to look at existing processes under the guise of making them more efficient through LEAN is a good initial step that will likely raise employee morale and customer satisfaction regardless of the payment model. On the IT side, collaborating with HIEs to better manage care transitions and to develop interventions for frequent ER utilizers is an effective first step that will demonstrate a commitment on the FQHC’s end to cost containment and efficient resource use.