Best Practices for FQHCs Preparing to Participate in Value-Based Care

When taking the next step toward value-based care (VBC), Federally Qualified Health Centers (FQHCs) will need to prepare for contract negotiations – and everything that happens after.  

There are many different types of VBC arrangements, and not all models are suitable for all FQHCs. Community health centers should carefully review their current capabilities and clearly envision their future goals in order to amplify their chances of success.

In many cases, it will be easier to meet these goals with the help of an IPA, which allows FQHCs to align around a shared vision without sacrificing independence and autonomy. An FQHC-specific IPA can reduce the administrative burdens of participating in a VBC arrangement by contracting with MCOs on its members’ behalf, allowing provider groups to focus on the clinical and financial tasks required to earn incentive payments.

Whether taking advantage of an IPA or going it alone, FQHCs have a lot to consider, including these best practices for getting started in the world of value-based reimbursement.

Want to dive deeper into the world of value-based care for FQHCs? Download our guide.

Understand eligibility criteria and how to meet them

VBC programs have specific criteria for members, including minimum patient panel sizes.  Some FQHCs serving small communities may not meet the threshold for the contracts of their choice.  

Fortunately, many VBC initiatives allow providers to form groups and pool their patient panels to meet the minimums and share in the rewards.  For example, joining an IPA designed for FQHCs can help community health centers fulfil eligibility criteria while simultaneously providing additional administrative and operational support.

Assess staffing, technology, and other foundational infrastructure

VBC relies heavily on the ability to manage populations individually and at scale. FQHCs will need to have a detailed understanding of the patients they are expected to manage, including their potential clinical risks.  

Many electronic health records (EHRs) offer population health management features to identify care gaps, but FQHCs should consider whether or not they will eventually need more advanced technology to stratify patients by risk and conduct recommended clinical activities.

Joining an IPA designed for FQHCs can help community health centers fulfil eligibility criteria while simultaneously providing additional administrative and operational support.

FQHCs may also need to reallocate clinical resources to develop integrated care teams to manage patients more effectively, or remodel physical spaces to co-locate services or expand treatment capacity.  

If engaging with VBC sponsors on their own, FQHCs could also need to invest in legal, operational, and administrative expertise to negotiate contracts appropriately.  These expenses may be significantly reduced if participating in an IPA that does not require upfront fees or other expenditures.

Review contracts carefully, especially if taking on financial risk

FHQCs should have no doubts about the terms and conditions of their contracts before signing on the dotted line.  All participants should be absolutely clear about quality and spending requirements, incentives and penalties, performance periods, and renewal opportunities.

FQHCs should not hesitate to ask what the payer is willing to provide in terms of technology, reporting, or operational assistance.  Payers may be able to provide crucial resources to ease the transition and foster success.

Nonetheless, negotiating a favorable contract with a large payer can be difficult for an FQHC, especially an independent provider with relatively limited clout.  Just like with meeting minimum panel sizes, there is a benefit to banding together with like-minded peers.  An IPA representing multiple FQHCs may have more leverage to secure advantageous terms with a payer, bringing benefits to all members of the group.

Be realistic about the pace of change

VBC is a marathon, not a sprint.  Health centers do not need to completely overhaul their digital infrastructure and clinical strategies during the first month of participation.  Organizational change takes time, and leaders should be willing and able to invest sustained effort in promoting the cultural changes required to make the most of value-based care.

Develop a roadmap that includes ambitious – but realistic – targets for performance, operations, and patient experiences.  This roadmap should be flexible and adaptable, since regulations are constantly in flux and unforeseen events, such as a global pandemic, can alter timelines.

Know when and how to get support when necessary

The value-based care environment is complex, challenging, and always changing.  Even experienced FQHCs may not have the resources to keep abreast of every single development or understand how a small regulatory change can have a big impact on their reimbursements.  

Value-based care is a marathon, not a sprint. Develop a roadmap that includes ambitious – but realistic – targets for performance, operations, and patient experiences.

Community health centers should establish strong relationships and open communication with their payers.  They should also consider connecting with other FQHCs to ask questions, share advice, and collaborate on best practices.  Peer networks can be essential for staying on top of the latest strategies and trends.

For FQHCs participating in an IPA, this network is baked into the membership.  And FQHCs get the extra benefit of knowledgeable, highly experienced specialists who are dedicated to helping the group thrive individually and as a whole.  Whether the community health center is new to VBC or has participated before, this type of assistance can be vital for accelerating success.

In conclusion

Value-based care is steadily expanding as federal, state, and private payers seek to improve quality and control spending.  

As VBC becomes more common in Medicare, Medicaid, and commercial insurance, FQHCs are finding themselves at a crossroads.  They can continue to rely on unsustainable revenue streams, such as grant funding and FFS reimbursement.  Or they can launch themselves into the future of high-value incentives for delivering the impactful, person-centered care their communities so desperately need.

Entering the value-based care ecosystem can seem daunting. It does require some investment and some organizational change. But FQHCs that hope to withstand the pressures of the evolving healthcare ecosystem will need to change and adapt to survive.

They don’t have to do it alone. With so many FQHCs facing the same obstacles, health centers can find strength in numbers. Joining an IPA can allow FQHCs to expand their participation options, gain leverage with payers, and reduce administrative overhead without sacrificing independence.

With a firm grasp on the opportunities of value-based care and a strong network of support to help unlock the potential of pay-for-performance reimbursements, FQHCs can continue to fulfil their mission of delivering exceptional care to the nation’s most vulnerable communities.