Federally Qualified Health Centers Alternative Payment Methodology

Federally Qualified Health Centers (FQHCs) participating in the Department of Health care Services (DHCS) Alternative Payment Methodology (APM) can move away from the traditional Prospective Payment System (PPS) to a front-loaded reimbursement method that more closely aligns with evolving practice needs and the effective delivery of health care services. Participating FQHCs:

• Receive monthly payments equivalent to their total projected PPS payment entitlement in the form of an APM per member per month (PMPM) rate.
• Are reimbursed across all assigned members attributable to each managed care plan with whom the participating FQHC has contracted.

This system aims to prioritize high-quality and cost-effective care that is coordinated, team-based, convenient to access and best meets members’ needs.

More information about the APM for FQHCs is available from the Department of Health Care Services.

Payment Scenarios for contracted and non-contracted FQHCs with Health Net

If a participating physician group (PPG) has a member who is being treated at an FQHC that is participating in the APM, and the FQHC is:

• Contracted with Health Net, the PPG should not make any additional payments to the FQHC as the cost of the service is included in the APM PMPM.
• Not contracted with Health Net, the PPG will need to pay the PPS rate for those services.