Payment Reform Update  

In 2015, Governor Jerry Brown signed Senate Bill 147, which authorized a voluntary three-year alternative payment methodology (APM) pilot for Federally Qualified Health Centers (FQHC) in California. The PPS equivalent, per member per month capitated payment was designed to provide FQHCs with greater flexibility to deliver health care to the patient in a manner that best meets the patients’ needs.

The APM discussion and progress is delayed by concerns expressed from CMS on the design of the payment methodology proposed to be implemented through a State Plan Amendment (SPA). While it does not appear the APM will be implemented through a SPA in 2018, CPCA remains fully committed to the APM and payment reform and is continuing to pursue a strategy where the SPA is the vehicle for the APM.

The unexpected delay, however, has a benefit in affording health centers more time to prepare and align their systems with the APM.  Health centers have more time to work with their plans to assign Medi-Cal beneficiaries to the appropriate site, track assigned beneficiaries in their EHRs, and work to ensure all assigned beneficiaries have come into the health center and completed a health assessment.

The Capitation Payment Preparedness Program (CP3) is also continuing to build and expand to help position health centers for success in the payment reform pilot as well as overall success with managed care partners and in particular pay for performance arrangements.  CPCA and the California Health Care Safety Net Institute (SNI), with key support from the Center for Care Innovations (CCI), launched the CP3 program to support FQHCs in California to transform their care delivery, improve access to care, and prepare for different reimbursement mechanisms to better support the Triple Aim. The program is valuable for all health centers, not just those interested in the APM.

CPCA has opened the CP3 trainings up to all members in an effort to spread the innovations. Many consortia and health centers have seen the value in the trainings, as evidenced by 12 regional CP3 trainings on a comprehensive managed care business practices. At the trainings there were 28 clinics that have not volunteered to pilot the APM, and four of those sites have since volunteered to join the pilot. The additional sites bring the total of APM interested sites to 82, representing 34 organizations.

As partners in CP3, the Center for Care Innovations delivered Population Health Technical Assistance Program with two track options – Comprehensive and Low-Intensity to provide support to clinics in transforming care delivery.

CPCA staff and coaches worked with interested FQHCs to assess their readiness and develop site-specific implementation plans to guide the execution of their payment reform work. CPCA and CAPH/ SNI staff continue to conduct monthly check-ins with sites to review their implementation plans and discuss strategies and resources available. Furthermore, in the fourth quarter of 2017 CPCA is launching a reassessment of sites in the CP3 program for a minimum of 12 months to gauge improvement of preparedness and to use the new assessment data to analyze other technical assistance and training needs for these sites. 

For more information about the CP3 program, please contact Cindy Keltner at

Thank You Foundation Partners • Blue Shield of California Foundation • California Health Care Foundation • Kaiser Permanente Community Benefits • The California Endowment • The California Wellness Foundation.