Value-Based Care and its Potential for FQHC and CHC Revenue Streams

Brian Williams, MHA, MBA
Woman taking medication

The incredible responsibility of providing care and support for underserved populations in today’s environment includes funding uncertainties, higher drug costs and other inflationary pressures, and staffing shortages. That’s a lot of pressure for federally-qualified health centers (FQHC). 

While these groups have been slow to adopt value-based care initiatives, the timing could now be exactly right. FQHCs can receive financial rewards for deploying an individualized, patient-centered care model that builds trust between patients and providers, which has shown to improve health outcomes. These financial incentives are from agencies such as the Centers for Medicare and Medicaid Services (CMS) and the Health Resource & Services Administration (HRSA), who are working to achieve health equity and improve public health. 

Let’s take a look at how engaging patients in activities such as developing healthier lifestyles, adhering to medication regimens, and focusing on prevention can help solidify some of the current funding uncertainties.


WEBINAR: Maximize Funding Streams Starting With 340B

What is Value-Based Care?

According to CMS, value-based care is designing care so that it focuses on quality, provider performance, and the patient experience. In value-based care, organizations of doctors, hospitals, and other health care providers commit to delivering a high standard of care. As part of their participation in alternative payment models (APMs), health providers aim to reduce health care fragmentation and are evaluated on their quality of care and individual health outcomes. FQHCs can participate in APMs through Medicare and Medicaid Managed Care Organizations (MCOs). 

The Impact of Value-Based Care on FQHC Revenue

Health centers’ revenue comes from a variety of sources, including reimbursements from Medicaid, Medicare, private insurance, the 340B Drug Discount Program, federal and state grants, private sources, and other revenue-generating contracts.

Very few, if any, of these sources are guaranteed. The funding could fluctuate at a moment’s notice, programs could be reworked, and grants lost. It’s why most FQHC leaders are constantly under pressure and reluctant to count on another potentially uncertain funding source. But, between legislative maneuvers, other inflationary pressures, and staffing shortages, now might be the time to reconsider.

Retain Revenue

FQHCs must be prepared to implement VBC at some point in the near future to avoid additional financial uncertainties. For example, approximately 42% of FQHC revenue comes from Medicaid programs and CMS has announced their intention to have all Medicare beneficiaries and most Medicaid beneficiaries enrolled in accountable care programs by 2030. This gives health centers a clear deadline if they want to maintain this funding. HRSA includes many references to the adoption of value-based care in their 2024 budget justification.

Some value-based care incentives utilize both financial rewards and punishments as part of the incentive system, meaning providers may lose revenue if they fail to meet goals. While this may generate better outcomes, it also puts dollars in jeopardy and turns off risk-averse providers and organizations. 

Grow Revenue

If you are confident your providers and organization can meet the standards, there are opportunities like value-based care contracts with MCOs that can increase your center’s revenue. Participants in value-based care models have increased visibility of prescribing and medication refills which can translate into increased revenue that is patient beneficial. In 2022, NACHC reported that access to medication and services supported by the 340B program has led to improved medication adherence, clinical outcomes, and access to care. These results can unlock additional value-based care money. According to the Advocates for Community Health Organization, as FQHCs move further into value-based care, 340B is an essential part of their ability to succeed. 

Tips To Implement Value Based Care

Implementing value-based care has a lot of moving parts! It’s also likely that many organizations will need to lay some groundwork and ensure the staff is culturally ready. Technical and tactical assistance may be needed to improve health information systems if the organization lacks experience or the technical infrastructure needed for APMs, such as value-based care. 

Here are a few tips to get started preparing for a shift to value-based care:

Use Education To Make the Shift

The transition to value-based care requires an extraordinary deployment of learning activities to ensure that staff are properly trained and prepared to deliver the outcomes expected in value-based care contracts. Centers should provide continuous training on evidenced-based practices that help staff account for the patient’s culture, ethnicity, as well as sexual orientation and gender identification. This education allows providers and clinicians to identify patient risk levels, prioritize care coordination, and reduce staff burnout.

Using a learning management system makes it easy for employees to complete training online and for leaders to reassign training when it is needed. Plus, create or upload facility-specific training to tackle the issues and procedures that are unique to your patient population.

Align Policies With HRSA

HRSAs Patient-Centered Medical Home Recognition program for FQHCs has created a solid foundation for value-based care as it established an advanced model of coordinated, comprehensive, and patient-centered care. Strategies for engaging patients and families in the design and function of the medical home can occur at three levels: care for the individual patient, practice improvement, and policy design and implementation. Follow NACHC’s Value Transformation Framework.

Keep policies top-of-mind for employees with a cloud-based storage solution that is accessible from anywhere. Using full-cycle policy management software, you can track the origination, review, and deployment of critical standard operating procedures. 

Gather Insights From Compliance Data

The goal of value-based care includes providing effective and efficient patient-centered care. Effective reporting and use of incident reports can help your organization to understand the issues and incidents that contribute to poor outcomes and document resolutions. By analyzing this data, you can implement corrective actions such as additional training or changes to policies.

Using an online incident reporting system removes common barriers that employees cite as reasons for not properly completing or submitting reports. Increasing reporting of near misses, suggestions for improvement, and specific VBC incident types gives you the data you need for analysis, which is often easier in an online format.