Toolkit: State Strategies to Develop Value-Based Payment Methodologies for Federally Qualified Health Centers

Both states and FQHCs have many things to gain by engaging in the development of value-based payment (VBP) methodologies. VBP methodologies reward providers for improving both health care quality and efficiency. They can incentivize FQHCs to dedicate resources toward developing patient-centered approaches to care delivery that can address social determinants and, ultimately, improve health outcomes.

For states, value-based purchasing is an important policy lever to contain the growth of health care costs and improve quality of care. Including FQHCs in delivery system and payment reforms can help state policymakers improve care and reduce costs for some of their states’ most vulnerable populations who live in underserved areas and align state priorities for quality improvement across Medicaid providers. States are demonstrating that by engaging new stakeholders and understanding the special considerations around FQHC payment, these critical providers can be included in key state innovations.

This toolkit can help state policymakers implement Medicaid VBP methodologies for FQHCs. Based on lessons learned from states during the National Academy for State Health Policy’s (NASHP) Value-Based Payment Reform Academy, the toolkit provides background information, key considerations, and state strategies that address the following:

  • •  Background on FQHCs, value-based purchasing, and key terms;
  • •  Stakeholder engagement;
  • •  VBP methodology development;
  • •  Measurement and reporting; and
  • •  FQHC readiness and practice transformation

Click here to download a PDF of the toolkit or use the buttons below to read each section.


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