The Best of Both Worlds: Risk-Based Managed Care Contracts in Compliance With Federal Rules

To encourage the shift from volume to value, risk-based payments are increasingly becoming the norm in provider contracting. In the context of Medicare and Medicaid, however, federal law protects FQHCs when managed care payments fall below amounts that FQHCs would have otherwise received under the Prospective Payment System (PPS). Can these two payment systems co-exist? This session will explain federal law and policy applicable to the calculation of supplemental (wrap-around) payments under the PPS. It will illustrate how these rules should apply to commonly-encountered risk and incentive payment models such as pay-for-performance, shared savings/shared risk for total cost of care, and primary care, professional, and global capitation. Lastly, presenters will explain when federal law permits program income to cover down-side losses.

• Articulate how supplemental (wrap-around) payments are calculated under the PPS.
• Recognize common risk and incentive payment models in provider contracting.
• Identify permissible uses of program income to fund downside risk.