Alternative Payment Methodology (APM) Initiative

The California Primary Care Association and the Department of Health Care Services are commencing the process to build an alternative payment methodology (APM) for California's community health centers (CHCs).

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Medi-Cal reimburses community health centers under the Prospective Payment System (PPS), a payment methodology that requires patients come to the health center to receive care. Health centers need more flexibility in how they deliver care to their patients and the APM CPCA is helping to build alongside DHCS and CPCA members will ensure they receive at least what they would have gotten under PPS but now with more flexibility for the health center and patient. 

PPS Modernization Initiative

CPCA is actively working with the Department of Health Care Services (DHCS) and other key stakeholders to modernize PPS and change how health centers will be reimbursed. A modernized payment methodology for health centers will align with the implementation of CalAIM and the state’s efforts to promote a more holistic, patient-centered approach to care. 

(click to download full infographic)

The modernized PPS will allow participating health centers to move from the visit-based reimbursement methodology to a capitation payment methodology, commonly known as a per member per month payment. This new payment method will: 

  • Provide the flexibility to deliver care in innovative ways that will expand primary and specialty care access and help improve patient experience,
  • Simplify the payment processes for health centers alleviating many of the administrative challenges including billing wraparound payment, reconciliating payments, etc. 
  • Facilitate greater collaboration between health centers and Medi-Cal managed care plans, specifically in the areas of data collection and submission, care coordination and quality improvement. 


Value-Based Payment Articles

Member Engagement

CPCA members are leading the work with DHCS and our health plan partners to develop the Alternative Payment Methodology. Additionally, staff are hosting monthly PPS Modernization Workgroup Meetings where the general membership can join and stay updated on this APM work. For more details on future meetings or to be added to the group, please contact Victoria Gomez at

CPCA Contacts:

Andie Martinez Patterson
Senior Vice President of Strategy, Integration & System Impact

Victoria Gomez
Executive Assistant

Frequently Asked Quesions

Hear from Andie Martinez Patterson, CPCA's Senior Vice President of Strategy, Integration & System Impact, and two health center CEOs as they address important issues regarding APM.

What is APM?

APM: COVID-19 Opportunities & Challenges
APM: Find out what the patient needs

APM: Why now?

APM: Why now vs 20 years ago?

APM: Leverage all members of the team

APM: On the cusp of change

Frequently Asked Questions

  • What is the implementation timeline?
    Expected implementation date is January 1, 2023. CPCA continues to work with DHCS and other key stakeholders on the implementation timeline that will meet various federal and state requirements. 
  • Which health centers can participate in this initiative?
    All FQHCs will have the opportunity to apply for the APM. The APM will be voluntary.  
    CPCA is developing resources for those health centers that are interested in participating in this initiative. More information will be available in the future.