Alternative Payment Methodology 2.0

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The alternative payment methodology (APM) signed into law in 2015 cannot move forward as originally intended because, according to Centers for Medicare and Medicaid Services (CMS), the pilot must be implemented using an 1115 Waiver and the legislation in SB 147 authorizes only the use of a State Plan Amendment (SPA).  Despite this conclusion by CMS, CPCA’s commitment to payment reform has not faltered. We remain committed to securing an APM utilizing a SPA, with the goal of introducing a new APM (APM 2.0) in 2019.

During this time, CPCA has been exploring the opportunities related to advancing health center payment reform with managed care plans and health centers. The managed care plans CPCA has been engaging with are interested in value with flexibility for patients and health plan spending, paying smarter, and a rational way to maximize FQHC capacity. Similarly, health centers remain committed to participating in CPCA’s Capitated Payment Preparedness Program (CP3) because they, too, desire a payment reform model that achieves value from flexibility, utilizes resources most appropriately, and leverages their full capacity for the array of their patients’ needs. 

CPCA’s goal in 2018 is working with health centers and managed care plans to jointly develop a proposal that furthers our collective goals so that together we can reengage the state next year in a proposal that is even better than the first model. 

The delay to our original pilot, while frustrating, presents opportunities that we must capitalize on. For APM 2.0 we know more clearly how CMS interprets the rules for SPAs and 1115 Waivers with regard to FQHC APMs, thus helping to ensure the next APM will be more likely to be approved. We also have the opportunity to develop the proposal with the managed care plans, helping to ensure easier advocacy with the state and legislature. Additionally, health centers have the opportunity to align their systems with managed care to ensure the rates for the APM are more reflective of the utilization of assigned beneficiaries. Rates in Medi-Cal managed care are typically built on two years old historic utilization data. To ensure as robust a rate as possible, health centers now have the opportunity to identify the assigned beneficiaries, empanel them, and establish regular care.  

Interested health centers are encouraged to engage in the payment reform workgroup staffed by CPCA’s Director of Government Affairs Andie Patterson and engage with CP3, led by Deputy Director of Health Center Transformation Cindy Keltner. CPCA will not stop until there is a payment reform model that enables health centers to fully leverage all of their capacity and strengths in caring for California’s underserved and vulnerable patient populations.