Helping FQHCs Shift to Value-Based Payment Models

NYSHealth awarded Hudson River HealthCare a grant to help federally qualified health centers in New York State form a network and be able to contract/negotiate with insurers in a shift to value-based payment models.

Grantee Name

Hudson River Healthcare

Funding Area

Special Projects Fund

Publication Date

April 2019

Grant Amount

$200,000

Grant Date:

April 2016 – June 2017

Special Projects Fund

Federally qualified health centers (FQHCs) must develop and implement different strategies to remain economically sustainable and continue delivering care to medically underserved areas during health care’s shift from fee-for-service to value-based payment models.

However, because of limited resources and influence, many FQHCs may find themselves at a disadvantage, especially when it comes to negotiating terms with payers. Independent Practice Associations (IPAs) are networks formed by physicians that allow them to act as a private organization to contract and negotiate with insurers.

In New York State, a group of 10 FQHCs formed the Community Health Independent Practice Association (CHIPA) as a way to increase members’ bargaining power and ensure financial sustainability. Founding members were Finger Lakes Community Health, Greater Hudson Valley Family Health Center, Hudson River HealthCare, Institute for Family Health, NYU Lutheran Family Health Centers, Open Door Family Medical Centers, Regional Primary Care Network, Ryan/Chelsea-Clinton Community Health Center, Urban Health Plan, and William F. Ryan Community Health Center. CHIPA was the first IPA formed among FQHCs in New York State and collectively provides care to more than 600,000 patients, many of whom are low-income and from vulnerable populations.

In 2016, NYSHealth awarded Hudson River HealthCare (as fiscal sponsor) a grant to support the implementation of CHIPA and the development of a clinical integration plan that would enable CHIPA to deliver value as a network, both regionally and statewide.

Outcomes and Lessons Learned

  • Created a clinical integration plan based on the needs of CHIPA members and engaged Envolve Health, a provider of health care management services, to give CHIPA guidance and counsel.
  • Developed a roadmap for clinical integration among CHIPA members, as well as strategies to secure value-based payment contracts with payers.
  • Developed financial models to monitor the integration of clinical services, including a cost-benefit analysis, CHIPA membership projections, and potential revenue based on value-based payment contracts.
  • Recruited additional members, growing CHIPA from 10 to 18 FQHC members—representing both upstate and downstate, large and small centers, and urban and rural populations—by the end of the grant period. By the end of 2018, CHIPA had grown to 24 members.
  • Successfully negotiated a value-based payment contract with a managed care organization and initiated two additional contract discussions.

The project strengthened CHIPA’s ability to enter into value-based payment contracts. In 2017, it successfully negotiated and signed its first value-based payment contract with Affinity Health Plan. Although no shared savings were realized during the first year of the contract, it was renewed for a second year. Based on preliminary year-end data, CHIPA expects to report cost savings for 2018. Additionally, the New York State Department of Health selected CHIPA as one of its value-based pilot projects. The general consensus among the participating FQHCs is that joining CHIPA has better positioned them to be competitive in a value-based payment system.

Co-Funding and Additional Funds Leveraged: N/A