Transitioning your FQHC from fee-for-service to value-based care

Photo via Callen-Lorde

Switching from a fee-for-service (FFS) model to a value-based care (VBC) model is a long-term investment in the future of your practice, from creating more predictable revenue streams to improving the overall quality of patient care.

As more health centers make the switch, some Federally Qualified Health Centers (FQHCs) aren't sure how to get started — or feel like they don't have a seat at the table the way bigger organizations do.

As CEO Mary Ellen Diver of Advantage Care Health Centers put it:

“FQHCs sometimes feel like we’re one step behind other types of care providers in terms of how we can innovate, but that’s not the case. There are so many opportunities to engage with the evolution of the healthcare systems, whether that’s through grants and recognition programs or partnerships with payers and value-based care experts.”

In this guide, we’ll go over why so many FQHCs are making the switch — and the concrete steps you can start taking today to make VBC in your organization a reality.

Already want to get started? Download our free checklist for preparing for success with value-based care.

What is the difference between fee-for-service vs value-based care?

In short, the FFS model bills patients for each service rendered. The VBC model ties what providers earn for their services to patient-related outcomes — such as quality of care and equitable access.

Why are health centers switching to value-based payment models?

Besides the fact that VBC is on track to become a standard for many community health centers in the future, there are myriad reasons for making the switch. VBC models can help:

• Diversify and strengthen your revenue stream
• Get compensation for the work you’re already doing
• Reduce burnout and balance workloads for providers and staff
• Focus more on preventive care to benefit more eligible patients 
• Coordinate with other providers for better care and outcomes

VBC is becoming an increasingly prominent revenue model for community health centers (CHCs). In fact, the Centers for Medicare and Medicaid Services has set a goal for 100% of Medicare beneficiaries to receive VBC by 2030.

The bottom line? The VBC model reduces wasteful spending, increases the quality of patient outcomes, and helps stem preventable hospital visits. In fact, one study found that healthcare organizations that implemented VBC saw a 33% improvement in patient satisfaction and a 20% reduction in readmission rates.

Related eBook: 3 Reasons to Switch to Value-Based Care Now

So, how can you reap the benefits of VBC once you have decided to make the switch? Read on.

How to transition from fee-for-service to value-based care

Taking the following steps will help ensure a more smooth transition for your organization and set your team up for success:

1. Get stakeholder buy-in

Photo via Long Island Select Healthcare

Transitioning from FFS to VBC as a financial model requires full buy-in across the organization, because it will require everyone to make the change. Depending on your role and the way your FQHC is structured, you will likely need to present this concept to your care team, providers, and Chief Medical Officer for approval.

Common experiences FQHC stakeholders have with this transition include:

• Lack of familiarity with — or skepticism towards — the VBC model
• Concern about viability during financial transition period
• Questions about current staff bandwidth and capabilities
• Resistance towards a new way of doing things
• Fear that the transition will hurt the organization in the long run

Questions concerning a new financial model are normal and healthy for any organization to discuss. Here are some tips to guide your key stakeholders through their concerns and come to a consensus on the best way forward:

✔ Presentation for key stakeholder buy-in

Some key stakeholders may be unfamiliar with the concept of the VBC model, or unaware of its benefits. A quality presentation may include:

• Explanations of the VBC model and how it works
• Why this model is increasing in popularity (including statistics)
• How the organization will benefit from making the switch
• How patients will benefit from making the switch
• What resources will be needed to do so
• A general timeline for what this transition will look like
• How your organization will measure quantify and outcomes
• Risk management strategies your organization will apply
• How IPAs and MSOs may act as valuable partners throughout the transition and beyond
• Projections for what the future of VBC means for your organization (qualitatively and quantitatively)
• Space for Q&A at the end

If you're not sure yet about the answers to the above, further points in this article may help you clarify some of the fuzzier aspects of this transition. Key stakeholders will also benefit from open office hours or 1-1s to come with any additional questions or concerns.

2. Evaluate your tech capabilities

Photo via Long Island Select Healthcare, Inc.

The VBC model requires sophisticated tools to collect, analyze and share a wide variety of data. In order to work with such data, your team will need to assess what your current tech stack looks like and what you'll need to fill the gap.

Your organization will benefit from health information technology that:

• Allows for patient self-scheduling
• Enables care providers to exchange communications and data on secure, HIPAA-compliant platforms
• Collects, integrates and analyzes both primary and secondary healthcare data
• Uses predictive analytics to assess patient needs, resulting in reduced hospital readmissions (which increases the VBC-based bonus your organization ultimately receives)
• Empowers patients to engage with their health information through a patient portal

CHCs commonly face challenges of underfunding and rarely receive enough compensation to build excess cash flow. Without enough cash flow to invest in new computers or software — including the organizational training and staff bandwidth to successfully use this technology on a regular basis — working with a managed services organization (MSO) is a fruitful solution. MSOs provide services for specific needs such as human resources, technology and billing for a fraction of the price of doing so in-house. 

For the purpose of HR, tech and billing, partnering with MSOs also prevents the need to invest extensively in:

• New hardware (such as computers and computer accessories)
• Recurring software subscriptions
• Ongoing training for new and current staff
• Dedicated staff to tend to specific data gathering, analysis, and reporting tasks

Ultimately, finding the right MSO consistently reduces your overhead costs in the short run and the long run. It's in your best interest to look for a provider who is aligned financially, clinically, and culturally in order to provide services that are hand-in-glove with your own organization.

3. Decide how you will track quality and outcomes measures

Photo via Joseph P. Addabbo Family Health Center

One of the linchpin differences between the FFS and VBC models is that VBC statistically results in better patient outcomes. Most importantly, accurately reporting improved patient outcomes results in bigger bonuses for your organization — meaning increased revenue.

To that end, it's crucial that your organization has the capabilities of measuring quality care and outcomes. In order to do so:

✔ Identify and establish the measures that matter

Some VBC metrics may include:

• Timeliness and ease of access – Can your patients easily access their physician for treatment in a timely manner?
• Patient safety – Is your organization preventing infections, hospitalizations, and higher risk conditions through quality preventive care?
• Equitable access – Are the providers in your organization offering high-quality care to patients regardless of demographic, including people from socially and economically disadvantaged backgrounds?

As an example, after switching from FFS to VBC, Joseph P. Addabbo Health Center measured improvements in:

• Adolescent immunizations – Increased from 49% to 57%, placing JPA in the 90^th percentile for performance
• Child and adolescent well visits – More than doubled from approximately 26% to 54%
• Breast cancer screenings – Up from 57% to 61% for eligible patients

Establishing baselines and metrics for these outcomes are absolutely crucial for organizations providing VBC.

✔ Create a formal process for regularly evaluating outcomes and iterate as needed

Ensure that your team evaluates outcomes on a monthly or quarterly basis. For example, you may find that you don't have enough persuasive data that points towards patient safety, requiring additional data points of measurement. 

Or you may find that patients feel that they aren't able to see care providers in a timely manner, resulting in the need to implement structural and technological solutions to improve results. Staying on top of these measurements will ensure that your organization provides the best outcomes possible.

✔ Consider working with an IPA

An IPA (Independent Provider Association) is a business entity owned and organized by a network of independent physician practices. Its purpose is to reduce overhead costs for MCOs.

In addition to negotiating favorable contracts with MCOs, IPAs can provide guidance and expertise around VBC best practices. They have the capability to expand and improve your health center's services, including:

• Expanding hours
• Referring to urgent care
• Providing outreach services for prevention
• Conducting telephone triage
• Offering follow-up expertise
• Managing relationships between primary care providers, specialists, and hospitals

An IPA promotes the efficiency and effectiveness of your organization and has a stake in improving patient outcomes. Some IPAs are structured so they only receive payment when their members meet value-based care goals — meaning no upfront membership or technology fees, and significantly reduced financial risk on your end.

4. Prepare for a revenue transition period

Photo via AdvantageCare Health Centers

Transitioning from an FFS to VBC model takes time. For some organizations, it may take years to fully make the switch. In the interim, it's important to ensure your organization has a plan in place to compensate for the possibility of a decrease in short-term revenue. This happens for a variety of reasons, including investing in the upfront costs of transitioning to a new model, training staff, and reducing utilization.

While the prospect of a short-term decline might feel scary, it will also set the stage for longer-term stability and growth. In the meanwhile, a few steps your organization may take include:

✔ Negotiate a favorable shared savings contract

It's difficult to negotiate a contract that benefits your organization if you're doing it on your own. Much like the bargaining power that unions provide workers, IPAs leverage the collective bargaining power of multiple health centers to negotiate contracts with better terms than you could acquire on your own. 

Doing so also gives you access to value-based contracts that are usually reserved for larger providers, and unlocks reimbursements for the whole-person care you're already providing without proper reimbursement.

As Dr. Miriam Y. Vega, CEO at Joseph P. Addabbo Family Health Center shared, working with Yuvo Health as an IPA shifted the center of gravity for reimbursement:

“We’re treating the whole person. It’s everything from having the patient meet with case managers who address food or housing insecurity to having huddles across the providers to make sure the patient is seen in their entirety.”

✔ Work with a qualified IPA to shoulder the financial burden

In downside risk contracts, participants keep a larger percentage of shared savings but also risk needing to return a percentage of overages to the payer. Some IPAs shoulder the risk for your community health center. 

In other words, your organization won't be on the hook for extra expenses — and will only get paid if you get paid. This incentivizes IPAs with such a payment structure to enable your health center to hit VBC targets, and significantly reduces the risk associated with changing payment models.

✔ Eliminate unnecessary expenditures

Take a look at your current operational costs and see where you can cut wasteful spending. Some examples of wasteful spending may include:

• Services and processes that don't deliver benefits (or even cause harm)
• Repeated diagnostic tests or services due to poor information sharing between providers
• Instances of overtreatment, such as ordering imaging for headaches or cardiac imaging for low-risk patients
• Spending on brand-name products instead of generic products that provide the same quality
• Charging inconsistent prices
• Managing HR, billing, and technology upgrades in-house

5. Collaborate with and train staff

Photo via Joseph P. Addabbo Family Health Center

The staff at your organization are on the front lines of ensuring this transition is successful. The changes your team implements will impact the types of patients they see and the type of care they provide.

✔ Educate on the concept of value-based care

Just as you likely did with key stakeholders at the beginning of this process, staff need to understand why you're switching to a VBC model, including how it will benefit them and the organization in the long haul. Taking this step will also help with staff buy-in.

✔ Align on performance metrics

Provide staff with shared vocabulary and an understanding of the new metrics your community health center will use to assess quality care. Doing so will give the team much-needed context moving forward. Communicate how you will measure, analyze, and share these metrics — including how metrics will impact staff evaluations and compensation.

✔ Provide training and iterate based on feedback

Transitioning to a new care model will change various aspects of how your community health center is run on a day-to-day basis. Make sure you provide comprehensive training to address these changes and guide staff through any new systems. Keep lines of communication open with staff and solicit regular feedback to improve processes. Ultimately, your staff have unique and valuable perspectives to contribute as you work out the kinks.

✔ Recognize work well done

Studies show that employees are more likely to be engaged and do better work when they receive meaningful feedback. Put processes in place to publicly highlight team successes, both big and small. 

For example:

• Celebrate hitting specific benchmarks and goals with bagels or pizza for the team
• Send out office-wide memos recognizing teams or team members who have gone above and beyond to provide high quality, value-based care
• Provide financial incentives for teams and individuals that align with your organization’s goals

No matter how you slice it, recognizing the hard work of your staff will benefit everyone in the organization.

Download our free checklist: Prepare for Success with Value-Based Care

Yuvo Health can help

Photo via iStock

Making the transition from FFS to VBC requires a long-term investment and comes with a lot of organizational hurdles. 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, 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.