Strategies for Successful Value-Based Contracting in FQHCs and RHCs

Entering value-based contracts requires careful planning and strategic negotiation. When executed effectively, these contracts can drive significant financial and clinical benefits for FQHCs and RHCs.

Key Elements of Value-Based Contracts

Value-based contracts typically include the following elements:

  • Risk-Sharing Arrangements: These contracts often involve shared financial risk between providers and payers. Providers may receive bonuses for meeting performance targets or incur penalties for failing.
  • Performance Benchmarks: Contracts specify performance benchmarks that providers must meet to receive full reimbursement. These benchmarks are based on quality metrics such as patient outcomes, preventive care, and patient satisfaction. Many of them will be in line with UDS quality metrics you’re already striving for or with Healthy People 2030 initiatives.
  • Care Coordination Requirements: Providers may be required to demonstrate effective care coordination across the healthcare continuum. To optimize these benefits, you will want to implement programs at your clinic, such as chronic care management and transitional care management.

Negotiation Tips

Successful value-based contracting requires thorough preparation and strategic negotiation:

  • Understand the Terms: Carefully review contract terms, including risk-sharing arrangements and performance benchmarks. Ensure you fully understand their implications for your organization. Many clinics love the upside terms of their agreements and can be surprised when the downside terms go into effect.
  • Prepare Data: Use data analytics to demonstrate your organization’s ability to meet performance benchmarks. Presenting strong diagnosis data capture can strengthen your negotiating position.
  • Seek Expert Advice: Consider consulting with experts with value-based contracting experience. Their insights can help you negotiate favorable terms and avoid potential surprises.
  • Build Strong Relationships: Good relationships with payers can facilitate smoother negotiations. Regular communication and a collaborative approach can lead to more favorable terms. Additionally, these relationships help considerably when credentialing clinicians.
  • Stay Informed on Policy Changes: Value-based care is an evolving landscape. Keeping up-to-date with regulatory changes and industry trends can help you anticipate shifts that may impact your contracts.

Additional Navigation Tips for Value-Based Contracting

  • Utilize Benchmarking Tools: Use benchmarking tools to compare your performance metrics with industry standards. This can provide a clear picture of your organization’s performance and highlight areas for improvement. FQHCs can review UDS reporting both nationally and statewide through HRSA’s UDS data collection.
  • Focus on Patient-Centered Care: In negotiations, emphasize your commitment to patient-centered care. Demonstrating how your organization prioritizes patient outcomes and satisfaction can be a persuasive argument for better contract terms. Recent patient survey results are a great start to gathering this data.
  • Develop a Risk Mitigation Plan: A comprehensive risk mitigation plan can reassure payers of your ability to manage potential setbacks. This plan should include strategies for addressing underperformance and ensuring continuous quality improvement.
  • Engage Frontline Staff: Involve frontline staff in the planning and implementing value-based care initiatives. Their buy-in and understanding of the goals can enhance the effectiveness of care coordination efforts, improve overall performance, and lead to higher patient satisfaction.
  • Leverage Technology: Implement advanced health IT systems to streamline care coordination and data collection. Many FQHC and RHC practices have found that customizing their EHRs is essential in meeting quality reporting requirements. We’ve also found it beneficial to have provider champions available to increase workflow efficiency and optimize data capture.
  • Monitor and Report Progress: Establish a regular monitoring and reporting process to track your progress against performance benchmarks; your quality team can help with this endeavor. Transparent reporting can build trust with payers and provide a basis for renegotiating terms.

BCA has a proven track record of helping FQHCs and RHCs navigate the changing healthcare landscape. For 35 years, we’ve been the experts in clinical documentation and coding; in recent years, we’ve added robust data analytics to help your organization succeed in the value-based care world. If you want to learn more, contact us at