Funder: California Health Care Foundation and Blue Shield of California Foundation

Author: Greg Howe and Tricia McGinnis, MPP, MPH, and Rob Houston, MBA, MPP, Center for Health Care Strategies

April 2019 | Report


Leading-edge federally qualified health centers (FQHCs) and health plans in California are demonstrating interest in advanced payment models (APMs) aimed at providing greater flexibility for FQHCs to deliver care in innovative ways. Their joint goal is to improve quality and decrease the health care costs of their patients. With support from the California Health Care Foundation and Blue Shield of California Foundation, CHCS conducted interviews with 28 stakeholders in California and around the country to inform this report.

The resulting report highlights examples from around the country and in California of promising payment models that provide greater flexibility, tie payment more closely to quality, and give FQHCs the ability to reap financial rewards from improving quality and reducing utilization costs across the larger health care system.  It also describes ways health plans and FQHCs can address challenges and adapt value-based payment (VBP) models for the FQHC setting that do not require state or federal action. It points out opportunities for health plans, FQHCs, and the state to leverage lessons from other states for accelerating the adoption of VBP in California.

While the paper is oriented to the California landscape, the lessons herein can be applied in other states seeking to advance VBP models in FQHCs.