Community Clinics Initiative: Strong Clinics, Healthy Communities
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19 Oct 2007, Manatt Health Solutions

Medicaid and Medicare reimbursement for health IT in FQHCs is legally permissible, prudent policy and a necessary first step in building the infrastructure and capacity for improvements in patient care and positioning health centers for quality-based reimbursement.
As the health care industry moves toward quality-based reimbursement, it is crucial that the nation’s Federally Qualified Health Centers (FQHCs) and the vulnerable populations they serve are not left behind. FQHCs have been at the forefront of national efforts to improve primary care delivery. However, FQHCs are poorly positioned to respond to emerging quality-based reimbursement mechanisms, which assume the availability of clinical information powered by sophisticated health information technology (IT). Because FQHCs typically are unable to expend up-front capital on health IT in anticipation of enhanced payments for demonstrated quality improvements, the full benefits expected from quality improvements cannot be achieved without significant investment in FQHC capacity and infrastructure. Existing reimbursement rules for FQHCs under Medicaid and Medicare permit reimbursement for health IT investments with a direct clinical impact, and provide a vehicle for policy makers to guide such investments to support state and federal goals. Policymakers and FQHCs should leverage Medicaid and Medicare reimbursement to promote the types of health IT investments that will best prepare FQHCs for quality-based reimbursement and ultimately improve patient care.