The Value-Based Care Contracting Checklist for Community Health Centers

Cesar Herrera, Co Founder & CEO

Value-based care (VBC) is changing the status quo for providers and payers across the healthcare industry.  By shifting away from unsustainably wasteful fee-for-service, stakeholders are moving toward a care environment that generates more value and better outcomes for patients, providers, payers, and society as a whole.

More than 36 million Americans currently receive services from providers participating in value-based models from Medicare, Medicaid, and commercial payers - a number that is expected to grow as regulators continue to put pressure on providers to embrace innovative reimbursement structures. 

This transition is anything but easy, particularly for FQHCs under constant pressure to stretch their scarce resources to serve the nation’s most vulnerable communities.  Jumping into an unfamiliar reimbursement model might seem like the last thing your FQHC needs right now.

But community health centers shouldn’t be reluctant to start exploring the switch.  Value-based care offers significant benefits for FQHCs, including the opportunity to achieve financial sustainability that can see you through troubling times.

If you are interested in starting your journey to value by partnering with a payer, such as Medicaid or a commercial health plan, you need to know all the facts.  What value-based care models are you looking at?  What are the expected outcomes?  How will you reach those goals? And what exactly is in all that small print at the bottom of your contract?

This checklist can help your community health center generate the knowledge required to succeed when negotiating a value-based care contract with a payer.

Download this checklist to keep each step handy as your FQHC gets started with value-based care.

Your Checklist: Negotiating a Value-Based Care Contract

Establishing a clear sense of your goals, capabilities, and appetite for change

Value-based care is much more than just a different way of billing.  It requires participants to make coordinated, holistic changes to the way they manage patients individually and at scale.  FQHCs are already experienced with focusing on preventive care while addressing the social determinants of health, which puts organizations like yours ahead of the curve.

However, it’s still crucial to carefully survey your resources, strengths, and weaknesses before committing to value-based care.  Consider asking yourself the following questions:

  • Do we have specific financial, clinical, and patient experience goals in mind, such as maintaining our independence or managing chronic care patients more effectively?  Can we accurately benchmark our current performance to see how close we are to achieving those aims?
  • Are our clinical and non-clinical staff willing and able to invest in making changes to their workflows and decision-making?  Do we have the capacity and resources to implement effective, lasting changes?  Are our executives or board members ready to take the organization in this direction?
  • Are we interested in taking on financial risk with the potential to earn greater rewards?  How much risk are we comfortable with?  How long are we willing to keep trying if we don’t hit our shared  savings targets right away? 
  •  Do we have the technical infrastructure in place to maximize performance?  What upgrades might be required to engage in effective risk stratification, care coordination, and performance  analytics?

Answering these questions concretely can help FQHCs establish their goals and the timelines for reaching them.  With a well-defined direction and buy-in from all stakeholders within the organization, community health centers can go into contract negotiations with a stronger sense of confidence and purpose. 

Understanding the terms of your value-based care arrangement 

Healthcare relationships are notoriously complex – for good reason.  Both payers and providers have an obligation to protect the privacy, safety, and wellbeing of their members or patients, and that typically comes with a lot of legalese.

FQHCs should be aware of the major elements involved in a value-based care contract and how those factors can work in your favor (or otherwise).  Key components of a value-based care contract will include:

Patient attribution and risk adjustment

  • What process is being used to determine attribution?  What is the minimum panel size for participating in a given model?
  • Will patients be attributed prospectively or retrospectively?
  • How are baseline risk scores developed?  What is the methodology for risk adjustment? 

Performance measures, incentives, and shared savings benchmarks

  • What is the financial structure of the model?  Is there a ramp-up period to greater risk sharing?
  •  Are there bonuses, enhanced service payments, or other incentives in addition to shared savings?  Are there any penalties? 
  • What are the thresholds for clinical performance?  What are the spending benchmarks we will be accountable for?  When does the performance period begin and end?
  •  Will payment be retrospective or prospective?  When and how will payment be delivered?  If there is a discrepancy or disagreement, how will we resolve disputes?

Data analytics, reporting, and health information exchange

  • What are our responsibilities for providing reporting to our payer partner? If we need technical or actuarial help, how can we get it?
  • What insights and information will our payer provide back to us?  How can we use that data to enhance our performance?
  • Will we need to coordinate with other providers?  What information exchange tools do we need, and will there be support available for establishing new infrastructure?

Securing support and guidance from an expert in contracting

Value-based care is still very new to the healthcare industry, and stakeholders across the care continuum are still figuring out how to make the most of innovative financial and clinical arrangements.  

FQHCs haven’t been the primary focus for the regulators and payers who are architecting the VBC landscape, so it’s no surprise if you’re feeling a little unsure about how to find your place in this challenging ecosystem.  Questions like these might be swirling in your head:

  • Are we certain that we are pursuing the right model for our organization and that we will be prepared to succeed with it?
  • Do we completely and clearly understand the fine details of how each of the above components will affect our organization and our odds of success within the model?
  • Do we have the legal and industry expertise to adequately review contracts to protect our organization financially and clinically?
  • Do we feel our potential payer partner is trying to take advantage of us in some way?  Are we missing something?  Are we concerned that we might not be making the best possible deal for our  patients and our staff?    

If you answered “no” to the first three questions and “yes” to the last one, stop what you’re doing!  You shouldn’t have to feel as if value-based care is a leap of faith for your FQHC.  There is help available for you.

Independent provider associations (IPAs), like Yuvo Health, are designed to provide critical knowledge,clarity, and access to contracts for healthcare organizations looking to make the most of value-based care.  Yuvo Health is an IPA exclusively for FQHCs, giving you the advantage of working alongside like minded community health centers who share your challenges, goals, and mission.   

With fully aligned incentives, deep expertise, and a passion for community health, Yuvo Health is here to help you maintain independence, achieve financial sustainability, and continue serving patients in need. 

For more information on how Yuvo Health can help you work through your checklist and achieve your value-based care objectives, contact us today.

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