CTuA1 - One Step Back, Two Steps Forward: Erie Family Health Center’s Value-Based Care Journey

Session Description: Erie Family Health Centers entered 2024 believing that the key to long-term sustainability would be shifting to Medicaid primary care capitation. In addition to state-level plans to implement an alternative payment model (APM) across all Medicaid payors, Erie already had a primary care capitation agreement with its largest Medicaid plan, representing 28,000 lives. As part of transformation planning, Erie collaborated with Facktor to model the financial and operational implications of moving to an APM. The results of this analysis led Erie to rethink its strategic approach to payment. The fundamental concern was that capitation rates, if set in the near term, might not reflect future clinical activity and therefore create problematic incentives for the organization. Instead of implementing an APM immediately, Erie pivoted to focusing on a set of fundamental care model initiatives that would both benefit Erie under encounter-based payment and position it well for a shift to an APM in a few years. These initiatives, which include increasing clinical efficiency, expanding access, improving quality documentation, and engaging disengaged attributed members, will help ensure their value-base contract baseline appropriately represents their performance and set them up for long-term success under any payment model.