Government health programs and private insurance companies typically pay community health centers based on the volume of care they provide, and federal grants partially compensate them for treating uninsured patients.
States can also implement voluntary alternative payment models through Medicaid, and several have.
These clinics care for patients regardless of their ability to pay. Medicaid is the largest payer in most states, according to the Kaiser Family Foundation. Value-based payment allows more flexibility in care delivery, which can benefit community health centers, said Jeremy Crandall, director of federal and state policy for the National Association of Community Health Centers.
The flexibility that comes with alternative payment models also can aid health centers in carrying out their essential mission, Crandall said. These approaches enable the facilities to devote more attention to social determinants of health and data-driven care than under fee-for-service models.
Mosaic Medical, which operates more than a dozen community health centers in central Oregon, runs a mobile clinic primarily aimed at the homeless population. Value-based payment makes such initiatives more achievable, said Megan Haase, CEO of the Bend-based provider.
“Health centers do these things and just try to figure out how to make it work, but it works easier in a value-based payment construct,” Haase said. “It doesn’t require putting pressure on providers for visits to try and fund something.”
Value-based care arrangements designed for hospitals or even physician practices may not be appropriate for health centers. These models may require providers to take on downside financial risk, either by committing to return money to payers if they don’t reach specific metrics or by keeping costs within a certain upfront amount.
This, combined with start-up costs associated with switching away from volume-based reimbursement and other challenges, makes transitioning to alternative payment difficult for community health centers.
Health center leaders know that moving toward value-based payment is a costly proposition that can require new technology, more employees, new data analysis capabilities and other enhancements to succeed.
This all requires precious capital, which is difficult for community health centers to raise. Transformation demands buy-in from employees at a time when they are burned out from working through the COVID-19 pandemic.
It also may become a competitive necessity as the rest of the health care system accelerates toward value-based care and start-ups willing to take on risk for Medicaid beneficiaries enter the market for the patient populations federally qualified health centers serve. If community health centers don’t adapt, they may get left behind.
“What can be done to support health centers, in both protecting them from those competitive threats, but also giving them support that is needed so they can responsibly and willingly take on downside risk?” asked Christina Severin, president and CEO of the Community Care Cooperative, a Boston-based Medicaid accountable care organization governed by community health centers across Massachusetts.
Although community health centers may need different kinds of support and flexibility to make value-based care work, industry leaders agree that new payment models can’t mean less revenue.