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Legal Requirements and Issues Concerning Wraparound Payments to FQHCs

Resource Topic: Operations, Finance

Resource Subtopic: Compliance.

Year Developed: 2019

Resource Type: Publication

Primary Audience: C-Suite (CEOs, CFOs, CIOs, COOs, CMOs, etc) Administrative Staff

Language: English

Developed by: National Association of Community Health Centers (See other resources developed by this organization).

Resource Summary: The federal law addressing the Medicaid FQHC PPS contains special provisions regarding payments to FQHCs for services rendered under contract with a Medicaid managed care organization (MCO). In essence, states are required to make payments to FQHCs to cover the difference between amounts paid to the FQHC by a Medicaid managed care organization (MCO) and the FQHC’s PPS rate (if the latter is higher).3 These supplemental payments, which are made directly from the state to the FQHC, are sometimes referred to as “wraparound” payments. This Issue Brief provides an overview of the law relating to wraparound payments to FQHCs, and identifies several current key policy issues relating to FQHCs’ participation in Medicaid managed care.

This project is supported by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) as part of an award totaling $6,375,000 with 0 percentage financed with non-governmental sources. The contents are those of the author(s) and do not necessarily represent the official views of, nor an endorsement, by HRSA, HHS, or the U.S. Government. For more information, please visit HRSA.gov.