Value-Based Payment Reform for California Health Centers

The Affordable Care Act has catalyzed both an expansion in insurance coverage. It has also promoted a national effort to move away from volume-based payment for health services and toward delivery system and payment models that promote value-based care that results in improved health outcomes, patient experience and per-capita costs. In California, health centers are essential community providers for the Medi-Cal population that, as of 2015, includes over 12 million beneficiaries. Representing all federally-qualified health centers (FQHCs) in the state, the California Primary Care Association (CPCA) and California Association of Public Hospitals and Health Systems (CAPH) partnered on an initiative to test a new payment model that transitions health centers away from the current volume-based prospective payment system (PPS) to one that provides the flexibility to increase access to care and improve care delivery.

Blue Shield of California Foundation engaged JSI to assist CPCA and CAPH moving FQHC payment reform from policy development toward implementation, including working with health center, state and managed care stakeholders to ensure that the reform is optimized to catalyze care delivery transformation. From July 2015 to June 2016, JSI provided: technical assistance and consulting to CPCA and CAPH; analytic tools for rate setting support for health centers; analysis of evaluation approaches for the pilot; background research for topics of interest (e.g., tracking social determinants of health, documenting virtual visits, expected changes under changed financial incentives); stakeholder engagement through state workgroup meetings with the Department of Health Care Services and Medi-Cal managed care plans; tracking of the State and National Policy contexts; and communications documents related to the payment reform pilot in California.

The ultimate result of this project is to provide California health centers with the information and tools to safely experiment with value-based payment that is designed to ultimately improve access to primary care and health outcomes for the Medi-Cal population.