As value-based care takes off, community health centers try to keep up

Federally qualified health centers, long accustomed to getting by on volume-based public insurance reimbursements and government support, are experimenting with value-based care. Modernizing may be their best path to sustainable, high-quality care but community health centers can’t simply copy the models other providers have implemented.

Community of Hope, which operates three federally qualified health centers in Washington, wants to build out its maternal and child health capabilities. That would entail hiring lactation consultants and care coordinators, spending on patient transportation and more. But the plans rely on grant funding, which comes and goes. And that’s not a long-term solution, said President and CEO Kelly McShane.

“How do we get out of this—just grants that go up and down?” she asked.

Community health centers across the country are trying to solve similar problems by wading into value-based payment, partly because it offers more versatility in how funds are spent.

Moreover, federal law requires alternative payment programs to reimburse these clinics at least what they receive from government payers, which can conflict with risk-based models. Under some of these systems, providers that take on risk must return money when they fail to hit cost or utilization metrics. For community health centers, that could mean getting less than their minimum reimbursements, which isn’t allowed.

System transformation

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 healthcare 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.

Minding the mission

Transitioning to population-based payment can reduce costs and improve care, but it shouldn’t happen at the expense of the mission, said Amanda Pears Kelly, CEO of the industry organization Advocates for Community Health. Federally qualified health centers need “some assurance and guarantee” that value-based payment models won’t result in service cuts or threaten the facilities’ solvency, she said.

Whether community health centers need to take on risk in value-based payment initiatives remains an open question. Policymakers can do plenty to encourage innovation and efficiency without putting providers’ finances at risk, such as employing global budgeting, said Sara Rosenbaum, a health law and policy professor at George Washington University. Safety-net financing should be guided by stabilization, growth support and innovation, she said.

Paying for value should be a whole-system priority, said Jana Eubank, executive director of the Texas Association of Community Health Centers. Policymakers should spend on health centers, which are major primary-care providers, rather than subject them to financial risk, she said.

“If you look at the total cost of care, investing in primary care actually makes a lot of sense, and that is going to end up saving money downstream in terms of unnecessary hospitalizations and specialty care,” Eubank said.

On the other hand, negative incentives sometimes have positive effects.

“Community health centers are so mission-driven that, in most cases, you could probably do without having a lot of downside risk. But I do think that having a level of transparency around these measures … does enforce a level of accountability that I think is important,” said Marshall Greene, Mosaic Medical’s senior healthcare data strategist.

On the ground

Despite the challenges, some community centers have started moving into alternative payment approaches through Medicaid managed-care contracts or models set up by states. Some even signed on to risk-based contracts.

In most states, the majority of community health centers are in the early stages of payment transformation, according to preliminary data collected by the National Association of Community Health Centers. Among those clinics testing value-based care, the highest proportion is participating in pay-for-performance or reporting systems, while some are further along.

In Iowa, the state primary-care association set up a clinically integrated network, which can assume risk contracts on behalf of participating health centers. This allows them to enter into risk arrangements with Medicaid carriers and spread that risk among themselves.

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A handful of other states have moved in that direction, and more are interested, said Aaron Todd, CEO of the Iowa Primary Care Association. Todd sits on the steering committee for a collaborative of more than two dozen state associations that advises states on creating this kind of system.

Oregon has a newly created clinically integrated network and has offered an alternative payment and advanced care model since 2013. The system pays for primary-care services on a population basis rather than focusing on volume. The COVID-19 pandemic slowed progress toward value-based care in the Beaver State, but efforts are underway to better align clinical and community health innovations with health equity and other priorities, said Danielle Sobel, senior director of policy and governmental affairs at the Oregon Primary Care Association.

In Massachusetts, the Community Care Cooperative, or C3, should have close to 60% of its patients connected to the ACO via contracts that involve primary-care capitation by January, Severin said.

Other states have programs known as health center controlled networks, which can help clinics improve quality and enhance their health information technology capabilities, which are important steps toward value-based payment.

Moving forward

Each community has different needs and there is no perfect strategy for federally qualified health centers that want to adopt alternative payment systems, Crandall said.

“We feel very strongly that payment models need to be flexible and inclusive enough to provide care for all the different types of special populations we treat,” Crandall said. Administrators testing new models need to give themselves and their employees plenty of time and resources to smooth the adaptation, he said.

Sharing best practices, as the 30-state learning collaborative does, can help community health centers move forward. The Duke-Margolis Center for Health Policy is also leading the creation of a value-based payment framework for safety-net providers.

“A key take-home message that we have seen is that you can come up with a value-based payment model, even if it may look a bit different than what you see in other settings,” said Robert Saunders, senior research director of the Duke University program.

The Center for Medicare and Medicaid Innovation also wants to encourage community health center participation in alternative payment experiments, which is part of its recently released strategic plan.

Ultimately, the transition into alternative payment seems inevitable, even if the level of financial risk centers can accept is up for debate, McShane said.

The transition can be rewarding, said Karen Gardner, CEO of Community Health Center of Cape Cod in Mashpee, Massachusetts, which participates in the C3 ACO.

“Even though it can be scary, really what this does is create a huge opportunity for us, as health centers to leverage everything that we’re all about, from our mission-centric, patient-centered care model, to our focus on quality and equity and inclusion,” she said. “It really is an exciting opportunity to be able to demonstrate and be recognized, quite frankly, for the amazing work that we’re doing.”