OR: Alternative Payment Methodologies Seen As Key to Incentivizing Quality Care

St. Charles Health System logo

Three federally qualified health centers (FQHCs) in Oregon—Mosaic Medical, Oregon Health & Science University’s Richmond Clinic, and the Virginia Garcia Memorial Health Center—are currently conducting pilot projects using alternative payment methodologies.

The methodologies are designed to incentivize patient-centered and coordinated care. Traditionally, FQHCs and other Medicaid providers earn revenue based on the fee-for-service system, which bills for volume of visits and doesn’t necessarily encourage quality care.

Each FQHC receives a per-member-per-month amount of money. The amount is predetermined, doesn’t take into account whether all members seek care, and is based on annual utilization data. Because each FQHC serves a different payment population, each monthly rate is different.

Such a payment method creates a direct link between payment and quality of care patients receive. Rather than emphasizing visits, clinics can use the money to bolster patient-centered primary care homes, and pay for services like email or phone consultations, patient education, and help with medication management, which don’t have traditional billing codes.

Eventually, the hope is that the per-month amount—which is currently based on a fee-for-service baseline—will convert to being determined according to performance measures and metrics, and thus will become a value-based system.

The Robert Wood Johnson Foundation is funding research by OHSU and the health information network OCHIN on the impact these methodologies have on care and health outcomes.

Central Oregon’s coordinated care organization began using its alternative methodology on March 1. Per an agreement between St. Charles Health System, Mosaic Medical, Central Oregon Independent Practice Association, and numerous clinics and providers serving the region’s Medicaid population, its capitated, per-month amount is $245 per patient, on average.

“This methodology is the key to the sustainability of Medicaid,” said Maryclair Jorgensen, director of health plan administration at St. Charles Health System. “With the newly expanded population, the system is really stretched and stressed. We need to come up with these kinds of innovations.”