Health Care Authority Updates Payment Rules Governing FQHC and Rural Health Clinic Payment

September 8, 2016

The Washington Health Care Authority (HCA) recently released proposed changes to the payment rules governing Medicaid payment to federally qualified health centers (FQHCs) and rural health clinics.  The changes are intended to accommodate a new alternative payment model (APM) which HCA plans to pilot with a group of interested clinics effective January 1, 2017.  Goals of the new APM are to provide greater flexibility in care delivery, incorporate value based incentives for quality, and simplify what has historically been a lengthy and extremely burdensome reconciliation process.

Over the last several months HCA has been working with a stakeholder workgroup composed of representatives from FQHCs, rural health clinics, and the Medicaid managed care plans. WSHA is participating as part of the rural health clinic stakeholder delegation, in conjunction with leadership of the Rural Health Clinic Association of Washington. While there has been some agreement on the general structure of the APM, many critical details still need to be determined before clinics can accurately assess the impact and benefit of the new payment model to their organizations. These details include:

  • Scope of service changes. Details need to be determined on the process to calculate and adjust payments to reflect changes to a clinic’s scope of services.
  • Details regarding reconciliation and calculation of payment rates. Under the current payment method, payment is reconciled to the encounter rate equivalent, with a potential for overpayments and recoupments.  It is unclear how HCA proposes to determine the amount of the per member per month payments under the APM.  The clinics are advocating for a process where reconciliation would ensure payments sufficient to meet the minimum level required by federal law, and would allow the payment to include care provided by phone or other means that are not face- to-face visits.
  • Quality measures. Work remains to determine selection, weighting, and scoring of quality measures.  This is challenging since some measures may not apply to many clinics due to low numbers of patients with that condition.

Comments on the proposed rule are due September 27.  WSHA plans to submit and make available detailed comments prior to the due date. (


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