Federally Qualified Health Centers: Surviving Medicaid Managed Care, But Not Thriving

This article reviews the experiences of federally qualified health centers (FQHCs) in Hawaii, Rhode Island, and Tennessee before and after Medicaid managed care demonstrations began. Adapting to managed care proved challenging, but all FQHCs survived. Overall, FQHCs performed better financially than anticipated, partly because demonstrations expanded coverage to previously uninsured individuals, and because FQHCs in two States formed plans that paid FQHCs more than other plans. Service encounters declined; it is unclear if this is negative, since it may indicate more efficient care delivery. In some cases, supportive State policies aided FQHCs' survival. Continued adaptation is critical for FQHCs' longer term prospects.