Embrace reimbursement reform for community health centers, say experts

Willing community health centers could potentially improve quality and efficiency of care for safety-net patients by shifting to value-based payment models, according to a report published in the Journal of the American Medical Association. However, the report's authors note this shift should be done with caution.

At present, CHCs, also known as federally qualified health centers, are paid under a prospective payment system in which states and CHCs agree on a set rate for qualified Medicaid visits, according to the report. Authors said the rates are based on factors such as how much the services cost and the scope of services.

While some state Medicaid programs reimburse CHCs at the set rate, CHCs in other states are paid by Medicaid managed care plan, in addition to a supplementary state payment covering the difference between the managed care payment and the set rate, the authors said. However, experts highlighted a number of issues with this payment system, such as it incentivizes these centers to increase the number of reimbursable in-person visits for issues that could be addressed electronically.

Through a pilot program initiated in Oregon in 2013, participating CHCs receive a capitated rate for Medicaid enrollees, and the state is required to ensure CHCs are reimbursed at least the same amount they would have received under the prospective payment system, according to the report.

"However, CHCs that implement alternative forms of patient interaction, such as group visits, care via telephone and electronic communication, and visits with nonbillable care team members, may realize lower costs from improved efficiencies," the authors add. And "under Oregon's Medicaid waiver, CHCs also are eligible for bonuses based on measures of quality and resource use." The authors said an independent evaluation showed participating CHCs saw modest decreases in emergency department and hospital use, along with improved quality, patient experience and access.

Overall, the authors conclude CHCs adopting value-based payment models with limited downside risk could lead to "higher-quality, more efficient and more patient-centric care." "Because of the vulnerability of patients served by CHCs, however, this shift must be done thoughtfully, while honoring the original intention of the prospective payment system — to protect safety net clinics from the volatility of Medicaid rates," they wrote.

The authors urged policy makers and CHC leaders "to embrace the opportunity to reform the reimbursement system."


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