Implementing Health Center Payment Reform in California 2016-17

State: California

Client(s): Blue Shield of California Foundation

Services: Health Systems Transformation, Policy Development & Implementation

Technical Expertise: Primary Care, Safety Net, Health Care Reform


Since 2011, JSI has worked in close partnership with the California Primary Care Association (CPCA) and the California Association of Public Hospitals and Health Systems (CAPH) to advance payment reform for federally qualified health centers (FQHC). JSI has been an essential partner in assisting the associations and their members to prepare for – and indeed shape – the future landscape of value-based pay for FQHCs as one necessary but not sufficient element for achieving the Triple Aim in Medicaid.

In October 2015, California Governor Brown signed Senate Bill 147 authorizing a three-year FQHC Payment Reform pilot with the goals of providing patient-centered care delivery options to California's Medi-Cal population; promoting cost efficiencies; improving population health and patient satisfaction; and improving the capacity of FQHCs to deliver high-quality care to a population growing in numbers and in complexity of needs. The pilot will allow FQHCs to implement an Alternative Payment Methodology (APM) that translates an FQHC’s current volume-based prospective payment system (PPS) rate into PPS-equivalent, per-member-per-month (PMPM) payments for all assigned members in select categories of aid.

Blue Shield of California Foundation and JSI will assist CPCA and CAPH as State Medicaid, managed care health, and health centers plan for and implement an FQHC Alternative Payment Methodology (APM) pilot in California. JSI will do the following:

  • Provide ongoing technical assistance and consulting for CPCA and CAPH related to all aspects of the APM
  • Provide technical assistance to health centers on State Work Groups dedicated to rate setting, alternative encounters and evaluation, and contracting
  • Engage stakeholders on the topic payment reform in the safety net by attending and presenting at state and national conferences and local convenings
  • Provide evaluation consulting by continuing to participate and inform Medi-Cal measurement standardization efforts and to assist CPCA and CAPH in considering how implementation decisions will influence potential evaluation strategies.