Are FQHC controlled Medicaid health plans still the way to go?

About ten years ago, Community Health Center owned and operated Medicaid managed care organizations (MCOs) were all the rage. I spent almost five years during that time working to build a plan in Florida. We were successful, but does this strategy still make sense today? The answer is definitely...maybe.

Recently, Modern Healthcare featured an article entitled Community health centers split on whether to start their own Medicaid plans. It began with my good friend and Yakima Valley Farm Workers Clinic CEO Carlos Olivares explaining why YVFWC wasn't going that route anytime soon. Carlos cited start-up expenses and financial reserve requirements as significant barriers to be overcome.  

And Carlos should know. In 1992, he was instrumental in the formation of the CHC controlled  Community Health Plan of Washington. So when Carlos speaks on this subject, people listen. At least I do. So if YVFWC isn't starting a Medicaid plan, what are they doing? To begin with, they are significantly beefing up their information management capabilities by implementing Epic across all of their sites.

In an interview with Xtelligent Media at this year's HIMSS conference, Carlos explained, “we knew that there was some transformation or work that we needed to do. We knew that as we move through the changes in healthcare, if as a system we didn’t make some radical shifts in direction we would be left behind.”

True transformation is neither easy nor inexpensive, and YVFWC is no exception. How will they pay for this? “We were leaving a lot of money on the table,” Carlos stated in the HIMSS interview. “There were a tremendous amount of resources that we were able to harness because of the data that we understood.”

That’s not to say that no FQHCs are going the health plan route. The Modern Healthcare article mentions that the centers in West Virginia are creating a plan in partnership with the state’s Blue Cross provider. The Oregon Community Health Information Network (OCHIN) is helping the group develop a central data repository where claims and clinical data will be stored and analyzed.  

I think the takeaway from this is that the FQHCs don’t necessarily have to own the Medicaid health plan in order to reap the benefits. It is clear that no matter who owns the plan, the key to success is to utilize sophisticated information systems to improve outcomes, while reducing cost. An FQHC that is able to accomplish this feat will most likely find the MCOs beating a path to their door. 


Steve Weinman is a Vice President at FQHC Germane, a health care consulting firm specializing in the needs of established, new and potential Federally Qualified Health Centers (FQHCs).

Read more about Steve here.

To contact Steve, email him at sdweinman@fqhc.org.