Under the Affordable Care Act, California’s Medicaid population increased by roughly 35 percent. Many of the newly enrolled childless adults are enrolled in managed care and receive primary care services through Federally Qualified Health Centers (FQHCs). To enhance the capacity of FQHCs to improve care delivery for these individuals, California’s Department of Health Care Services is pursuing a value-based, alternative payment methodology (APM) for its FQHCs. The proposed APM pilot is designed to give FQHCs more effective incentives to achieve the goals of the Triple Aim — better care, better health, and lower costs.

This brief, made possible through support from the Blue Shield of California Foundation, describes the pilot development process and proposed payment methodology, and outlines early lessons. California’s experience may help inform other states exploring alternative payment models for FQHCs.