California Primary Care Association: California Alternative Payment Methodology Pilot

The California Primary Care Association (CPCA) has been working in partnership with the California Association of Public Hospitals and Health Systems to develop a three-year pilot program for testing alternative payment methodologies (APMs) at California’s Federally Qualified  Health Centers (FQHCs) through California’s Medicaid program, Medi-Cal. The pilot program was authorized by Senate Bill 147, enacted in 2015:

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Under Senate Bill 147, the pilot program will enroll participating FQHCs on a voluntary basis, guarantee payments no less than under current Prospective Payment System (PPS) rates, and create a supplemental per member per month payment using an APM. The APM may include payments for “alternative encounters” or patient “touches” not currently claimable under the PPS fee schedule, such as email visits, phone visits, group visits, marriage and family therapist visits, integrated primary and behavioral health visits on the same day, community health worker contacts, case management, and care coordination. If a participating FQHCs succeeds in reducing Medi-Cal expenditures for its APM patient population by more than 30% in one of the pilot programs years, the FQHC will be eligible to retain up to the full amount APM payments. The details of the APM are currently being worked out with the state Medi-Cal program. The earliest that the pilot program can be implemented is July 2016.

CPCA has prepared a concept paper describing its approach to developing the APM pilot program. CPCA highlights the need to document the actual costs of alternate encounters for more accurate and comprehensive future payment methodologies. For example, the pilot program will document data related to the social determinants of health that are highly relevant for FQHC patients so that future payment methodologies can make more appropriate patient-based risk adjustments.

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