Impact of Alternative Payment Models on Quality of Care in Federally Qualified Health Centers From 2014 to 2024

Background: Federally Qualified Health Centers (FQHCs) are essential safety-net providers, but traditional payment mechanisms may focus on volume over quality-of-care. Alternative payment models (APMs) have been introduced to enhance value-based purchasing. It is hypothesized that APMs would improve flexibility and incentivize quality of care, but evidence remains limited, especially for maternal and child health and cardiovascular conditions. Objectives: We aim to evaluate the impact of APMs on quality-of-care in FQHCs in the United States. Methods: We used a 2-stage difference-in-differences design to compare FQHCs in states adopting APMs with those that did not, using data from 2014 to 2024 in 695 FQHCs. Quality-of-care was measured using 6 indicators, including 2 associated with maternal and child services (early prenatal care and dental sealants), 2 with preventive care (depression screening and tobacco use screening), and 2 with cardiovascular disease management (cardiovascular and ischemic vascular disease treatment). To examine heterogeneity of the effects, the analysis stratified FQHCs into 3 groups based on patient volume. Results: APM adoption was significantly associated with improvements in 4 quality measures: a 3.82-percentage-point increase in early prenatal care, a 9.12 percentage point increase in dental sealants, a 5.08 percentage point increase in depression screening, and a 3.50 percentage point increase in ischemic vascular disease treatment. Stratified analyses showed that large FQHCs in APM-adopting states experienced statistically significant improvements in 3 indicators. Conclusions: Overall, APMs were associated with positive but modest improvements in quality-of-care at FQHCs.