The federal law addressing the Medicaid FQHC PPS contains special provisions regarding payments to FQHCs for services rendered under contract with a Medicaid managed care organization (MCO). In essence, states are required to make payments to FQHCs to cover the difference between amounts paid to the FQHC by a Medicaid managed care organization (MCO) and the FQHC’s PPS rate (if the latter is higher).3 These supplemental payments, which are made directly from the state to the FQHC, are sometimes referred to as “wraparound” payments. This Issue Brief provides an overview of the law relating to wraparound payments to FQHCs, and identifies several current key policy issues relating to FQHCs’ participation in Medicaid managed care.
