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George Washington University, School of Public Health and Health Services, Department of Health Policy


Geiger Gibson/RCHN Community Health Foundation Research Collaborative Policy Research Brief No. 23


Access to Health Care; Safety Net; Chronic Diseases and Conditions; Community Health Centers; Disparities; CMS


On March 31, 2011, the Centers for Medicare and Medicaid Services (CMS) released proposed regulations implementing the Medicare Shared Savings Program (MSSP). The thrust of the MSSP is to promote savings to Medicare as well as the greater clinical integration of health care through incentive payments to accountable care organizations (ACOs) that meet Medicare standards for structure, performance, and health care outcomes. The effort to spur greater clinical integration through the MSSP was part of a broader set of reforms contained in the Affordable Care Act (ACA) whose aim was to improve health care quality and efficiency. Among these reforms is an $11 billion investment in community health centers, known as federally qualified health centers (FQHCs) under the Medicare program. In 2009, health centers served nearly 19 million low-income patients, including 1.4 million Medicare beneficiaries. By law, health centers must provide comprehensive primary health care while also serving as gateways to a full range of necessary care, including inpatient and specialty care. Federal data on health center services show that primary care represents 98.2 percent of all health care furnished by FQHCs.

Despite the broad aims of the ACA, CMS' proposed rule bars participation by health center-formed ACOs. Furthermore, while the rule permits health centers to be ACO participants, it also prohibits the assignment of Medicare patients to ACOs for shared savings purposes. Despite the absence of any legal barriers to FQHC participation in the statute, CMS bases this exclusionary policy on the fact that the FQHC payment method, which consists of a bundled payment for all primary health care services furnished by FQHC staff, does not allow the agency to identify which procedures are furnished by physicians, whose presence in care provision is a requirement of the ACO statute. In medically underserved communities, however, health care teams are essential because of the severe shortage of physicians; furthermore, FQHCs use health care teams to ensure comprehensive care.

CMS policy has the potential to produce a series of downstream consequences, most notably, the systemic exclusion of the poorest and most underserved patients from the benefits of ACOs and the disincentivization of meaningful FQHC affiliation agreements with hospitals and specialty groups participating in ACOs. The exclusion of Medicare FQHC patients comes at a time when health centers have experienced explosive growth in the number of Medicare patients served -- a doubling of patients over the past decade, even as the number of low-income Medicare beneficiaries grew by less than 10% nationwide.

The ACO statute provides the Secretary with the discretion to interpret the statute's assignment rule to recognize physicians as providers of health care regardless of whether they furnish health care directly or as part of health care teams. Although technical issues will arise in designing a shared savings methodology for health care team arrangements that rely on bundled payments, this challenge ultimately pales alongside the implications of excluding FQHC Medicare patients from the potential benefits of ACO practice.


Funder: RCHN Community Health Foundation.

Open Access