Alternative Payment Methodology (APM) Update
The FQHC Alternative Payment Methodology (APM) has been a decade in the making. It is an opportunity that is becoming reality due to the commitment, leadership, and collaboration of many stakeholders, including community health centers, CPCA, regional associations, state partners, and statewide associations representing managed care and public hospitals.
The work to develop an APM that is attractive and impactful for Federally Qualified Health Centers continues in earnest. The final details of the APM are being negotiated via five APM Working Groups (chosen by the CPCA board) and are close to being finalized. The State plans to submit a final State Plan Amendment and secure agreement from Centers for Medicare and Medicaid Services the Fall. Also in Fall 2022, the Department of Health Care Services (DHCS) will release its final set of operational policies and procedures and will launch a two-part application process, including an optional Letter of Interest (LOI) and a formal application. The APM will launch with Cohort 1 in January 2024.
LOIs in the APM are an optional but important first step to indicate an FQ’s interest in the APM. A clinic is not required to submit an LOI, but doing so will inform DHCS, Managed Care Organizations, CPCA, and regional consortia of a clinic’s interest to participate in the APM. Knowing the interest level and geographic distribution allows stakeholders to plan for the number, type, and intensity of readiness activities that will support clinics to be prepared. Click here for more information on how to submit a LOI for the APM.
The APM is an opportunity for clinics to have prospective, predictable payments and flexible use of resources to enable and drive care delivery transformation. The APM payment structure allows participating FQHCs the flexibility to deliver care in the most effective manner, through innovative care models that are not reimbursed under traditional volume-based PPS. Clinics are paid the same amount whether a patient is seen in that month or not. And clinics are guaranteed PPS if they go above historical utilization that determines the PMPM rate. The APM quality measures align with DHCS’ Comprehensive Quality Strategy and Managed Care Accountability Set, so that clinics can secure deeper alignment with Pay for Performance incentives and achieve higher quality and potentially more resources in return.
With the opportunity almost in front of us, CPCA will continue a concerted effort to help health centers prepare for a value-based care and payment environment. Overwhelmingly, health centers have asked for specific direction and guidance as to what preparedness efforts to focus on and when. Throughout 2022 and 2023, CPCA will offer intensive training, technical assistance, and peer-to-peer learning including the following:
PPS Modernization Work Group – a forum to share and discuss the details of the APM as they develop.
Webinars – describing the policies, procedures, and design of the APM so clinics can analyze how the structure comports with their goals and capabilities in the APM. We will also offer webinar-based training on high-value readiness activities for APM.
Value Based Care (VBC) Course – a self-paced online VBC course offered free to health center staff to gain a foundational understanding of how to prepare for a value-based payment environment.
Tools and Resources – to assist clinics in inputting their actual data so they can analyze their performance across several domains (financial, operational, quality, etc.) and make educated decisions about entering the APM.
CPCA is currently designing a learning collaborative for clinics who apply and are accepted in the APM.
It is important to note that regardless of where you enter readiness activities, you are not behind. We recommend starting with an assessment of your organization to identify strengths and opportunities and building a workplan to start addressing these. CPCA can help with that effort. View our APM Initiative webpage for helpful resources. We also suggest defining a champion and project manager to lead the APM efforts. This role may shift hands (and join forces with others) as the organization moves from contemplation and analysis to specific preparedness activities. Nesting this responsibility with a dedicated source of historical knowledge is a helpful step.
Please reach out to Allie Budenz at CPCA (abudenz@cpca.org) if you have any questions or feedback about the APM. We look forward to hearing from you!