Value-Based Payments Associated With Improved Quality Of Care At Federally Qualified Health Centers, 2014-23

Recent federal and state policies have been facilitating the participation of federally qualified health centers (FQHCs) in value-based payment programs to transform care delivery for underserved populations. However, evidence regarding FQHCs' value-based payment revenue and its relationship with the quality of care is limited. Using administrative data from all FQHCs in the US, we assessed trends in the centers' value-based payment and capitation revenue penetration during the period 2014-23 and examined the associations of quality outcomes with the receipt of these revenues. Although value-based payment and capitation revenue penetration increased over time, only 51.2 percent of FQHCs received value-based payment and 34.1 percent received capitation payment in 2023, accounting for an average of 2.4 percent and 9.4 percent of patient revenue, respectively. Receiving value-based payment was associated with increased levels in seven of nine quality measures relevant to preventive and primary care. Our findings suggested potential quality improvement effects of value-based payment, although barriers for FQHCs to participating in these programs may still exist.