California is one of four states, along with Oregon, Washington and Colorado, that is developing an alternative payment model that converts Medicaid rates for Federally Qualified Health Centers to a capitated per-member per-month (PMPM) payment.
The state’s Department of Health Care Services (DHCS) has said that FQHCs choosing to participate in this APM would be able to move away from the traditional Prospective Payment System (PPS) to a front-loaded reimbursement methodology that more closely aligns with evolving practice needs and the effective delivery of healthcare services.
DHCS is planning to submit a State Plan Amendment to the Centers for Medicare & Medicaid Services in late 2023 to seek approval to implement the FQHC APM, with a proposed implementation date of Jan. 1, 2024.
In order to incentivize enhanced healthcare quality for impacted Medi-Cal members, the new APM methodology will be linked to specific quality metrics that must be satisfied by the participating FQHC as a condition of continued participation in the APM program.
The state says it will work to align measures in CalAIM, Medi-Cal Managed Care, and Pay-for-Performance programs to ensure greatest impact in quality targets.
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