Federally Qualified Health Center Demonstration Fact Sheet


This Demonstration will be conducted in accordance with the Secretary’s demonstration authority under section 1115A of the Social Security Act, which was added by section 3021 of the Affordable Care Act and establishes the Center for Medicare and Medicaid Innovation. The Act states that “The Center for Medicare and Medicaid Innovation shall test payment and service delivery models … to determine the effect of applying such models under the applicable title …on program expenditures under such titles and the quality of care received by individuals receiving benefits under such title.” The statute defines “The term ‘applicable title’ means title XVIII, title, XIX, or both.”


The 3-year Demonstration is designed to evaluate the effect of the advanced primary care practice model, commonly referred to as the patient-centered medical home, in improving care, promoting health, and reducing the cost of care provided to Medicare beneficiaries served by FQHCs.

Eligibility Requirements


  • FQHC provided medical services to at least 200 Medicare beneficiaries (with Part A and Part B coverage, not Medicare Advantage) in a 12-month period, including those with both Medicare and Medicaid (dual eligible) coverage. CMS has reviewed administrative data and determined which FQHCs have met this criterion.
  • FQHC is listed in the Provider Enrollment Chain and Ownership System (PECOS) file and is able to receive electronic funds transfer (EFT). FQHCs that have not recently submitted an 855A form are not listed in PECOS and, therefore, will not be eligible to participate in the Demonstration. FQHCs that do not receive claims payment through EFT must submit the necessary form to receive EFT or they will also not be eligible to participate in the Demonstration.

Medicare Beneficiaries:

  • Beneficiaries, including dually eligible Medicare/Medicaid beneficiaries, must be enrolled in the Medicare Part A and Part B fee-for-service program, during the initial 12 month lookback period, and must not be currently in hospice care or under treatment for end-stage renal disease.
  • Beneficiaries enrolled in Medicare Advantage are not eligible to participate in this Demonstration.
  • Attribution of beneficiaries to an FQHC will be based on Medicare administrative data for beneficiaries for whom CMS has a claim in the look-back period.
  • Beneficiary eligibility is verified each quarter prior to payments being made. Participating FQHCs will receive an updated roster of attributed beneficiaries along with the quarterly fee Payment.


  • Participating FQHCs will receive a monthly care management fee of $6.00 for each eligible Medicare beneficiary attributed to their practice to help defray the cost of transformation into a person-centered, coordinated, seamless primary care practice. This payment, which will be made quarterly, is in addition to the usual all-inclusive payment FQHCs receive for providing Medicare covered services.
  • The fee will be paid automatically without the need to submit a claim.
  • Payment can only be made via Electronic Funds Transfer (EFT).

Terms and Conditions:

  • The FQHC agrees to pursue Level 3 PCMH recognition from the National Committee for Quality Assurance (NCQA) by the end of the Demonstration.
  • The FQHC agrees to remain in the Demonstration for the 3-year duration beginning November 1, 2011.
  • The FQHC agrees to submit a completed Application to participate by 11:59 pm (ET) on Friday, September 9, 2011, and to submit an initial Patient Centered Medical Home (PCMH).
  • Readiness Assessment as part of the application process by 11:59 pm (ET) on Friday, September 16, 2011.
  • The FQHC agrees to submit a revised Readiness Assessment every 6 months for the duration of the Demonstration.
  • The FQHC agrees to cooperate with the organization CMS engages to evaluate the Demonstration. This may include providing additional information or data.
  • The FQHC agrees to comply with all monitoring requirements. This includes repeating the Readiness Assessment every 6 months throughout the Demonstration.
  • The FQHC must attest that it is not currently under a corrective action plan from HRSA for serious safety or financial issues.
  • The FQHC acknowledges that CMS can terminate participation in the Demonstration for failure to progress toward PCMH recognition based on periodic Readiness Assessment scores.
  • The FQHC acknowledges that CMS can terminate participation in the Demonstration by any FQHC that has committed Medicare fraud.
  • By applying to participate the FQHC agrees to participate in learning cooperatives and other technical assistance that is offered by CMS and HRSA.
  • The FQHC acknowledges that failure to comply with all terms and conditions may result in disqualification from the Demonstration.
  • These terms and conditions are subject to change in the interest of improving results under the demonstration. Such changes would require the consent/approval of both parties and at least 30 days’ advance notice to facilitate their implementation.

Application and Review Process

1. Application Website

CMS is using a web-based application process for this Demonstration. Applications should be completed and submitted electronically. Each individual FQHC must submit an application form to be considered for participation in the Demonstration. Applications for multiple sites will not be accepted.

The application form has several sections to collect baseline data on practice characteristics and agreements, including general background questions, agreement and acceptance with terms and conditions, a supplemental survey questionnaire, as well as a PCMH readiness assessment. All sections and questions need to be completed to be considered for participation in this Demonstration.

2. Application Timetable/Milestones

Applications will be accepted until 11:59PM (ET) on Friday, September 9, 2011. All initial Readiness Assessments must be received by 11:59PM (ET) on Friday, September 16, 2011, for any application to be considered.

The Demonstration will officially begin on November 1, 2011, with the first quarterly prospective payment scheduled for November 15, 2011.

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