APM Launches Cohort 1

Since 2016, CPCA has been collaborating on building an alternative payment model (APM) to support the delivery of value-based care in safety net clinics. Almost a decade later, we are pleased to announce the APM launched on July 1, 2024. With the hard work and partnership of community health centers (CHCs), statewide clinic and managed care plan associations, and the Department of Health Care Services (DHCS), we are further along this development than at any other point in California’s history and that deserves recognition and celebration.

The launch of the APM included two health centers: Winters Healthcare Foundation (Yolo County) and Santa Clara Valley Medical Center (Santa Clara County). DHCS and CHCs hoped for strong participation in the APM, including a diverse representation across health center size and geography. However, unanticipated challenges* occurred during the design and pre-implementation stages that hindered widespread participation. Despite the challenges, our collective deliberations have been valuable and resulted in meaningful outcomes. It has been especially useful in identifying issues within the delivery system like complications with encounter data and assignment practices. Collectively, DHCS and CPCA have identified key priorities to address that will meaningfully move health centers toward participating in this APM design.

As a substantial part of the Medi-Cal delivery system, we believe the State needs to ensure APM policies promote rather than inhibit clinic participation in the APM to meet its Office of Health Care Affordability APM adoption goal for Medi-Cal of 55 percent by 2026. However, given the current design of the Federally Qualified Health Center (FQHC) APM, we are concerned that health centers will not participate in future APM cohorts, and the State will not be successful in meeting its goal. According to DHCS data sent to CPCA, 94 sites applied for Cohort 1 of the APM, and 71 sites were selected by DHCS, representing significant FQHC interest. Unfortunately, due to rate setting processes, this resulted in only two clinics with enough confidence in the business case to participate. For those health center sites selected for Cohort 1, the next opportunity to participate is January 2025. An application for Cohort 2 is expected the winter of 2024/25 with a scheduled start date of January 2026.

CPCA supports progress towards value-based alternative payment models and moving health centers up the risk ladder. We are committed to working with DHCS to offer practical solutions for mitigating critical barriers to increased participation.

 *To read more about the complications and CPCA’s recommendations to overcome them, CPCA members can click here to access the letter sent to DHCS Director Michelle Baass. In the letter, we offer practical solutions for mitigating critical issues to increase participation including using Cohort 1 clinic data to identify the source of unassigned utilization, addressing historically ineffective assignment policies, continuing efforts to improve encounter and supplemental data and tracking the progress of APM payment in delegated managed care environments.