Federally Qualified Health Centers (FQHCs) are safety net providers that are an important and growing source of primary health care for underserved populations. Recent health care reform is likely to rapidly expand their role as primary care providers, as additional federal funding is allocated to FQHCs.

In 2011 the Centers for Medicare & Medicaid Services (CMS) awarded Arbor Research a contract to develop a Prospective Payment System for Federally Qualified Health Centers. As the contractor, Arbor Research, in collaboration with the University of Michigan School of Public Health, will conduct research that informs the design of a Medicare Prospective Payment System that both create stronger incentives for efficiency over the current payment system, and establishes more appropriate payments based on the level of care individual patients require during their visits to an FQHC. In addition to supporting the development of this new Medicare payment system, key tasks for this project include assisting CMS in rulemaking activities in the development of the payment rates, regulations, and materials describing the new payment policy that will be published by CMS in the Notice of Proposed Rule Making, in 2013. Arbor Research will also update and maintain the payment system over time.

Arbor Research’s work for CMS on this new payment system represents an exciting development of the organization’s growth into other health services research areas that promote improvements in the quality and efficiency of patient care.