Evaluating Community Health Centers' Adoption of a New Global Capitation Payment

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 DESCRIPTION (provided by applicant): The common practice of reimbursing primary care providers through a fee-for-service model hampers efforts to develop patient-centered medical homes: it rewards a high volume of face-to-face clinic visits, which does not necessarily lead to value, quality, and patient-centered care. This is especially problematic in Community Health Centers (CHCs), which are currently paid based on the Prospective Payment System (PPS) rate, a fee- for-service model. To reform this payment model in CHCs, Oregon developed an Alternative Payment Methodology (APM) that converts PPS to a capitated equivalent. Eight CHCs are participating in an APM demonstration project, starting March 1, 2013, in which all of their Medicaid revenue will be paid through a prospective, capitated per-member per-month rate. The project seeks to (i) incentivize providing value over volume of visits, (ii) support comprehensive treatment modalities for patients with complex needs, and (iii) allow CHCs to focus more of their resources on population health initiatives. All 8 APM CHCs are members of the OCHIN community health information network practice-based research network, which includes over 300 CHCs in 20 states, with a single, shared electronic health record. This research environment enabled us to identify CHCs that are not participating in the APM, to serve as comparisons (controls). We used a distance- based matching algorithm to identify 8 "control" clinics that are matched with the 8 APM "intervention" sites (n ˜ 90,000 patients in the 16 study sites) with regard to clinic characteristics and baseline level of services utilization. Tis study design will allow us to differentiate the APM's effects from changes potentially attributable to concurrent primary care delivery transformation initiatives. We will study outcomes associated with the APM natural experiment in payment reform, addressing the following specific aims: Aim 1: Assess pre-post changes in utilization of CHC services (internal services), and quality of clinical care delivered in intervention sites, as compared with control sites. Aim 2 Measure pre-post changes in utilization of external services (e.g., emergency department) and overall costs to the Medicaid program among patients from intervention clinics, as compared to patients from control clinics. CHCs and their patient populations are likely to be among the most impacted by the Patient Protection and Affordable Care Act and other policy changes; therefore, it is critically important to evaluate how changes in practice and policy impact CHCs and their patients. This "natural experiment" has national significance, as it will completely replace CHCs' PPS reimbursement with a global capitated per-member-per-month payment directly from Medicaid. If this APM is proven effective, study findings will inform dissemination of similar APMs nationwide.