3 ways Hawaii FQHCs can benefit from value-based care

This article is an excerpt of “Embracing change: preparing FQHCs in Hawaii to take advantage of opportunities in value-based care”. You can download the entire whitepaper for free here. 

With a rich cultural heritage and a unique socioeconomic landscape, Hawaii has become a leader in community-based care that prioritizes innovation and value. 

True transformation cannot happen without FQHCs, however – and there are plenty of advantages in store for community health centers that take an active role in crafting the future. How can FQHCs make the most of the growing value-based care opportunities in Hawaii?

Value-based care (VBC) models have emerged as the most promising method for achieving…

• Heightened accountability across the board
• Access and affordability for patients
• Reimbursement and resources for providers to support better overall outcomes

Rooting reimbursement in value instead of volume encourages payers and providers to focus on more than just the clinical needs of patients and better aligns all stakeholders around delivering proactive, holistic care. 

While FQHCs are famous for doing great things on a shoestring budget, they deserve the chance to thrive, not just survive, in the evolving healthcare ecosystem.

So, what can your Hawaii-based FQHC do to take advantage of the benefits of VBC? We’ve outlined a few ideas below. 

3 immediate opportunities for Hawaii FQHCs in VBC

1. Create value for Medicaid beneficiaries with social needs-focused programs

Hawaii’s Section 1115 Medicaid demonstration, called QUEST Integration, launched in 1994 and has been extended and enhanced at regular intervals since then. The current version technically expired in July of 2024, but has been temporarily extended into early 2025 to allow officials additional time to settle on the details for the next five years of the program. As those details are firmed up, understanding the foundation on which they’re built can continue to be a helpful exercise for FQHCs. 

Among these details are proposals to expand the state’s efforts to address health related social needs (HRSN) and improve continuity of coverage.

If the new waiver is approved, QUEST will be able to cover a range of socioeconomic supports, such as housing-related services to address high rates of homelessness and housing instability, as well as nutrition-focused programming, including nutrition counseling and education, fruit and vegetable prescriptions and/or protein boxes, meals or pantry restocking and medically tailored meals or groceries for people with specific clinical concerns.

QUEST also aims to reduce coverage lapses for children and youth by requesting continuous Medicaid eligibility for children up to 6 years old and two years of continuous eligibility for those aged 6 to 19. Officials are planning to add 90-days of pre-release services for justice-involved individuals, and the state has eyes on efforts to revamp coverage continuity policies for complex adult populations and continue the conversation around adding coverage for traditional Hawaiian practices of healing and community care.

Starting in 2019, Hawaii gathered its healthcare delivery system transformation efforts under the Hawai‘i ‘Ohana Nui Project Expansion (HOPE) Initiative, which employed a “whole person, whole family, and whole community” approach to achieving the Triple Aim of better health, better care and more sustainable costs. Five health plans held contracts for quality improvement under the HOPE umbrella to execute goals around investing in primary care and prevention, improving outcomes for high-needs, high-cost individuals, reforming payment and aligning financial structures and supporting community-driven initiatives.

While the five-year HOPE program expired in 2024, state leaders consider it to be the “north star” for system-wide transformation, and are planning to bring many of its successful community-based, HRSN-focused components through to their future reform efforts.

2. Align VBC activities across payers with the Advancing All-Payer Health Equity Approaches and Development Model

In addition to advancing quality and equity through the Section 1115 Medicaid waiver, Hawaii is one of six states participating in the Advancing All-Payer Health Equity Approaches and Development (AHEAD) model, a state-based total cost of care (TCOC) model that seeks to leverage investment in primary care to lower costs, improve health equity, and enhance multi-payer alignment by including both Medicare and Medicaid components. 

Hawaii began its 30-month pre-implementation period in 2024, and will have its first performance year in 2027.  The model is slated to run until 2034, giving FQHCs plenty of opportunities to engage in designing and implementing innovative healthcare transformation efforts that specifically track with Medicaid and Medicare activities within the state.

In exchange for enhanced Medicare payments under a prospective payment methodology, as well as technical support and collaborative learning resources, participating FQHCs and RHCs will be required to engage in key transformation initiatives, including:

• Improved integration of behavioral health with primary care
• Enhanced care management and specialty coordination
• Additional focus on addressing health-related social needs

FQHCs and other primary care practices will also take part in state Medicaid transformation efforts to meet innovative requirements for person-centered care and reach performance goals on quality measures.  

As part of the effort, Hawaii will convene stakeholders to inform model activities, which will include developing a Statewide Health Equity Plan and assisting primary care practices with collecting more robust data on demographics and HRSNs. Officials are actively seeking input from FQHCs and other members of the primary care community to share their insights on how to best implement the principles of this new effort.

Quick facts about AHEAD

• AHEAD provides the opportunity for states to receive up to $12 million to support implementation activities over the first 5-6 years of the model
• Payment methodology for Primary Care AHEAD will include adjustments for social risk 
• FQHCs and RHCs will not have underlying PPS rates changed to receive the prospective $17 Enhanced Primary Care Payment
• The model will include waivers for nurse practitioners and physician assistants to address workforce shortages, which could help expand capacity in FQHCs and other primary care practices
• Interested FQHCs and RHCs in Hawaii should reach out to MedQuest and HPCA for more information on how to participate

The model is intended to serve as a complement to other value-based care activities, such as ACO REACH, Primary Care First (PCF), and the Medicare Shared Savings Program (MSSP) and allows for concurrent participation in overlapping initiatives, as well as additional state-level or health plan-specific opportunities.

This will create opportunities for FQHCs to maintain alignment across their value-based care activities and potentially “stack” incentives to further enhance their financial sustainability.

3. Expand programs with financial links to quality and spending

Hawaii’s multi-pronged movement toward a more value-based, quality-driven framework for care delivery has already seen measurable success. As part of HOPE, for example, health plans were able to increase their pay-for-performance achievement level from 46.3% in 2016 to 63.5% in 2021, largely by zeroing in on more efficient, proactive primary care.

These health plans have been taking a number of different innovative approaches, both within HOPE and otherwise, to infusing value-based payment models into their relationships with primary care providers in general – and with FQHCs specifically.  

In 2020, health plans initiated a total of 18 different VBC models, the majority of which focused on the primary care environment. FQHCs, community health centers and rural health centers had many tailored models to choose from, highlighting their foundational importance for overall health system transformation.

For example, one health plan offers PCPs and FQHCs enhanced per member per quarter payments for members with valid “Z” codes designed to document the socioeconomic circumstances of individuals and communities, as well as paying bonus incentives to PCPs and FQHCs based on each risk adjustment form completed and claims coding/payment.

Another plan pays a fee for FQHCs in support of enhanced care coordination and EMR data integration on a capitation basis, while a third launched an FQHC/CHC upside risk sharing arrangement with risk pool payments for neutral or positive medical loss ratios after relevant calculations.

Among the most prominent FQHC-centric initiatives is the Pay for Quality program from Hawaii Medical Service Association (HMSA), an independent licensee of the Blue Cross and Blue Shield Association and the largest Medicaid plan in the state. Since 2018, HMSA has offered this unique quality incentive program tailored to the variety of services and supports that FQHCs/RHCs offer to their communities.

The model includes both an engagement payment for documenting specific types of socioeconomic data, including “Z” codes, and Race, Ethnicity, and Language (REL) data, and a separate quality payment for meeting a variety of measures around preventive care, disease screenings and chronic disease management.

Participants can earn partial incentives across performance periods for demonstrating quality improvement over baseline performance, which encourages commitment to continuous advancement in care delivery strategies.

The broad variety of models targeted directly to FQHC participation across multiple health plans indicates strong investment in a successful transition to value for the state’s vital FQHCs. Attention to these programs is likely to grow as QUEST provides new options for reimbursing HRSN-related activities that are tied to greater success in holistic, preventive, person-centered VBC ecosystems.

FQHCs that haven’t participated in these or other models linked to quality, spending, or outcomes should start to prepare for the acceleration of this shift, especially in light of QUEST entering a new five-year cycle of innovation and collaboration with plans administrating Medicaid benefits.

Yuvo Health can help 

Programs focused on social needs, aligning VBC-activities across payers, and expanding programs that link to quality and spending are just a few ways Hawaii FQHCs can open up new streams of VBC revenue without the downside risk. 

Yuvo Health believes in the mission of providing VBC and its potential to help community health centers provide exceptional, sustainable care. As both an MSO and an IPA, we have experience leading other community health centers through these changes. 

As Dr. Rita Bilello, the former CEO of at Metro Community Health Centers, put it:

“With Yuvo taking this challenge on and eliminating the barriers, it gives FQHCs a voice in the conversation but also allows us, to some degree, to prove what we’re capable of doing.” 

In particular, we can help your team:

• Enter into higher quality VBC contracts with extensive bargaining power
• Gain access to revenue where Yuvo Health assumes the downside risk
• Overcome common hurdles with technology, including data collection, processing, and analytics
• Organize care coordination, patient outreach, planning, and engagement
• Make data-driven decisions that result in increased quality of care and revenue

You can learn more about us here or schedule a meeting today.