Medicaid FQHC APMs What are they and what do they mean for health centers? Alex Harris, MSPH Deputy Director, Transformation Policy

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1 Medicaid FQHC APMs What are they and what do they mean for health centers? Alex Harris, MSPH Deputy Director, Transformation Policy

2 What does payment reform look like for health centers? Incentive Payment for Performance Investment Payment for Delivery System Transformation (PCMH) Flexibility Base Payment (FQHC PPS/APM)

3 Medicaid Basics: FQHC PPS What is the FQHC Prospective Payment System? Transportation Single, bundled rate covers all services and supplies in single visit with a designated provider type Unique to FQHCs, other providers paid on the fee schedule Initial FQHC PPS rate established by averaging reasonable costs o o Calculated at each health center Serves as a baseline payment Lab testing Medical visit Health education Referrals PPS Operates differently in FFS vs. Managed Care environments Interpretation

4 Medicaid Basics: FQHC APM What is a FQHC Alternative Payment Methodology? State may implement a non-pps methodology, as long as: total reimbursement is at least equal to the PPS rate each participating FQHC agrees included in State s Medicaid Plan Allows for state flexibility and FQHC innovation Currently used in over 20 states

5 FQHC APM Categories in Medicaid Full FQHC PPS via Managed Care FQHCs are paid using the PPS methodology but the full rate is paid via a Medicaid managed care organization Reasonable Cost Per-Visit Bundled Payment Before PPS was created, FQHCs were reimbursed their reasonable costs. Some states chose to simply continue using this Rebased Per- Visit Bundled Payment The state regularly rebases the health centers rates to reflect changes in services and costs Per Member Per Month Bundled Payment Converts health center payments to a capitated per member per month (PMPM) payment. Bundled Payment with Quality Indicators (PMPM & Per-Visit) Provide incentives for meeting quality indicators includes both per-visit and capitated models Five Common Categories of FQHC APMs (MCO). methodology.

6 FQHC APM Categories in Medicaid Full FQHC PPS via Managed Care FQHCs are paid using the PPS methodology but the full rate is paid via a Medicaid managed care organization Reasonable Cost Per-Visit Bundled Payment Before PPS was created, FQHCs were reimbursed their reasonable costs. Some states chose to simply continue using this Rebased Per- Visit Bundled Payment The state regularly rebases the health centers rates to reflect changes in services and costs Per Member Per Month Bundled Payment Converts health center payments to a capitated per member per month (PMPM) payment. Bundled Payment with Quality Indicators (PMPM & Per-Visit) Provide incentives for meeting quality indicators includes both per-visit and capitated models Five Common Categories of FQHC APMs (MCO). methodology.

7 Per Visit Versus Per Patient FQHC PPS/ Traditional APM Payment linked to a face-to-face with a designated provider type Capitated FQHC APM Payment is linked to an attributed patient population and made on a per-patient basis each month

8 Capitated FQHC APM in Managed Care FQHC APM RATE (Per Member Per Month) Applicable Wraparound + Reconciliation Revenue Health Center Member Months Health center continues to negotiate contracts with MCOs Capitated FQHC APM establishes a new way of calculating and paying the difference between MCO reimbursement and FQHC rate NACHC working with CMS to clarify details of capitated FQHC APM when serving FFS Medicaid beneficiaries

9 Oregon FQHC APM: Visits to Care STEPS (formerly touches ) Oregon launched FQHC APM pilot in 2013 with 3 health centers Capitated PMPM payment based on historical PPS payments Excludes dental and specialty mental health services

10 Washington FQHC APM: Capitated Payment with Quality Metrics 2015 Conversion Year Scenario #1 Visits Patients Scenario #2 Visits Scenario #3 Visits Patients Scenario #4 Visits Enrollment Encounters 22,000 20,000 20,000 22,000 20,000 APM3 Per-Visit Rate $150 $150 $150 $150 $150 Total APM 3 $3,300,000 $3,000,000 $3,000,000 $3,300,000 $3,000,000 Member Months 85,000 90,000 85,000 90,000 80,000 APM 4 PMPM $40.00 $40.00 $40.00 $40.00 $40.00 Total APM 4 $3,600,000 $3,400,000 $3,600,000 $3,200,000 APM 4 Wedge $600,000 $400,000 $300,000 $200,000 New WA FQHC APM goals included: - Simplifying reconciliation process - Moving to value-based models - Flexibility to support use of care teams - Flexibility to support alternatives to ERs - Aligning payment approaches across the WA-OR border Portion of health center revenue held at risk for quality metrics, but will never dip below what PPS would have been.

11 Why a Capitated FQHC APM? Health Center Perspective Quality and patient experience Patient access Employee satisfaction Financial sustainability Aligning Practice & Payment What could we be doing more of to better serve the patient? What role definition changes could occur across all the care team?

12 Capitated FQHC APM Resources OR APCM Case Study COMING SOON: WA FQHC APM Case Study

13 Rate Setting (services, timeframe, calculation, etc.) Payment Elements (attribution, reconciliation, flow of dollars, etc.) Policy Changes (state plan amendment, state budget) Implementation (pilot vs. larger roll out) FQHC APM Fundamentals

14 Key Considerations and Steps for Health Center Engagement Why are you pursuing the model? What changes to the current system will be necessary? Is your model and approach tailored to your state environment? What is precedent will the model have and what could the implications be for health centers? Develop and maintain a robust understanding of payment and delivery reform efforts in the state and local environment. Ensure a clear, shared vision of the organization s role in achieving the Quadruple Aim that can be used to assess emerging payment reform opportunities. Critically assess current operations and capabilities. Work collaboratively with fellow health centers, stakeholders and partners to accelerate transformation of the health care delivery system.