Advancing Payment Innovation with Federally Qualified Health Centers: Lessons from California

To enhance the capacity of FQHCs to improve care delivery for their patients, California’s Department of Health Care Services is pursuing a value-based, alternative payment methodology (APM) for its FQHCs. The proposed APM pilot is designed to give FQHCs more effective incentives to achieve the goals of the Triple Aim — better care, better health, and lower costs. This case study describes the pilot development process and proposed payment methodology, and outlines early lessons. California’s experience may help inform other states exploring alternative payment models for FQHCs.