Healthcare Controversies · Health centers and continuity

Beyond the Billable Visit

Encounter payment, unfinished care, and who is accountable when a referral or abnormal result goes nowhere

California's own quality strategy says per-visit health-center payment “incentivizes volume.” Federal program requirements oblige centers to track referrals and follow up. Neither statement shows whether care is actually completed. This analysis maps the payment, the obligation and the measures that would connect them — without naming or judging any center.

Jurisdiction California, with federal program rules
Population Medi-Cal patients of federally qualified health centers and look-alikes
Scope Payment design, obligations and measurement — no individual center examined
Topics 31–36, 40

Proved

Stated by the operative text itself: a statute, regulation, court opinion or the study's own published results.

Documented

An official dataset, agency report, guideline or plan publication, read for what it measures and no further.

Attributed

Reported by a party, news organisation or secondary summary; confined to what the reporter says.

Inference

KPSGILL analysis from structure, incentives or comparison — labeled, never promoted to fact.

Open

A question the public record does not yet answer; the record that would answer it is named.

The dispute

Federally qualified health centers are the backbone of primary care for Medi-Cal patients in much of California, including the San Joaquin Valley. A persistent criticism — voiced by some physicians who have worked in and around them — is that they are paid for billable encounters rather than for taking responsibility for the whole of a patient's care, and that the payment design rewards the visit rather than the completed referral, the closed abnormal result or the reconciled medication list. The defence is equally serious: centers serve the most complex populations, carry public obligations that private offices do not, and are bound by federal requirements to track referrals and follow up.

This analysis does not ask whether health centers are good or bad. It asks a question that can be answered with records: can a system document encounters while failing to finish the care processes patients need — and if so, who is accountable, and how would anyone know? No individual center is examined or named. The question is about payment design, obligations and measurement.

Finding, as of 1 November 2026

California's own quality strategy states that the per-visit prospective payment system “incentivizes volume of patients over value of services provided” (the original reads “overvalue”) DocumentedB03. The state's alternative — a per-member monthly payment guaranteed to equal what the visit-based system would have paid — had two participating pilot organisations in its first published cohort, neither in Fresno County DocumentedB03 B04. Federal program requirements, as quoted in secondary sources, already oblige centers to track referrals and bring patients back for follow-up AttributedB07. The existence of a volume incentive does not establish unnecessary visits or neglect at any center. It does establish that payment and responsibility are separately defined, so that completion of care must be measured directly rather than assumed from either the payment or the obligation Inference.

How a health center is paid for a visit

Federal Medicaid law requires states to pay federally qualified health centers under a prospective payment system "calculated on a per visit basis," adjusted each year by the Medicare Economic Index applicable to primary-care services ProvedB01. When a center contracts with a managed-care plan that pays less than the per-visit rate, the state must make up the difference through a supplemental ("wrap") payment, made in "no case less frequently than every 4 months" ProvedB01. A state may use an alternative methodology only if it is "agreed to by the State and the center" and pays at least what the prospective system would ProvedB01.

California's statute defines the unit of payment. A center "visit" means "a face-to-face encounter between an FQHC or RHC patient and a physician, physician assistant, nurse practitioner, certified nurse-midwife, clinical psychologist" and other listed professionals ProvedB02. The statute treats video visits as payable at the prospective rate and contains specific rules for audio-only care and for same-day encounters with dental professionals and marriage and family therapists DocumentedB02. (The text reviewed is a reproduction; the official legislative site could not be reached from this environment, and the statute contains its own sunset provision whose successor was not examined Open.)

The consequence is structural rather than moral. Under a per-visit system, a qualifying encounter generates a payment; work that completes care without an encounter — telephoning a patient with an abnormal result, chasing an unscheduled referral, reconciling a discharge medication list, coordinating with a specialist's office — generates none directly Inference. A second visit to deliver information that could have been delivered by telephone is paid; the telephone call is not. That does not mean centers schedule unnecessary visits. Many follow-up visits are clinically necessary, and the per-visit rate is intended to cover the cost of a center's services in aggregate. It means the payment is attached to one kind of activity, and that the other kind must be financed out of it Inference.

What the state itself says about the incentive

The clearest statement of the incentive comes from the state, not from critics. DHCS's 2025 Comprehensive Quality Strategy describes the alternative-payment pilot this way: "The Prospective Payment System (PPS), or the per-visit rate, has historically been used to compensate FQHCs for their services. This model incentivizes volume of patients overvalue [sic] of services provided" DocumentedB03. It continues: "Participation in the APM would allow reimbursement systems to move away from the traditional PPS systems and the incentive for volume, focusing on value" DocumentedB03. Elsewhere the same document describes the methodology as a "shift away from prospective payment systems (PPS) towards a capitated model that promotes value over visit volume," and notes that "visits that are traditionally not billable by an FQHC can be provided through the FQHC APM and paid for using capitated payment revenue" DocumentedB03.

Two cautions apply. The strategy is a statement of design rationale, not a measured finding that per-visit payment has caused excess visits at any center Documented. And the incentive it describes is an incentive, not a behaviour: organisations under the same payment can respond very differently, depending on mission, governance, staffing and leadership Inference. The strategy is nonetheless decisive on one point. A criticism that health-center payment rewards volume is not a fringe or partisan claim; it is the stated premise of the state's own reform.

The alternative, and how little of it exists yet

Under California's FQHC alternative payment methodology, "each participating FQHC will receive monthly payments equivalent to their total, projected PPS payment entitlement in the form of an APM Per Member Per Month (PMPM) rate," across members assigned through contracted managed-care plans DocumentedB04. The design protects the center: "In the event the PMPM payments are determined to be inadequate, DHCS will pay the participating FQHC the difference" relative to the prospective system DocumentedB04. Participation is conditional: payments are "linked to specific quality metrics that must be satisfied by the participating FQHC as a condition of continued participation" DocumentedB04. The quality strategy describes targets on at least two measures in each of six domains, with a seventh, patient-experience domain reported only DocumentedB03. Entry rules in the application instructions require that at least half of a center's encounters come from assigned members and that at least 66% of its wrap claims match managed-care encounter data DocumentedB04.

Scale is the limiting fact. The quality strategy states that "Two pilot FQHCs have participated in the program so far" DocumentedB03, and the published calendar-year 2025 participant list identifies two organisations, neither in Fresno County DocumentedB04. A second cohort was set to begin on 1 January 2026; its participant count was not obtained Open. The published dates are consistent once the cohorts are separated: the quality strategy says the pilot "began on July 1, 2024," the first cohort's participant list gives per-member rates for July to December 2024, and the 1 January 2025 go-live in the program timeline refers to the next cohort DocumentedB03 B04. For Fresno, the practical point is that the visit-based system remains the operative payment model for health centers Inference.

Two adjacent changes bear on the comparison. Health-center services were excluded from the 2024 targeted rate increases, which apply to the professional fee schedule rather than to the center methodology DocumentedB06. And a planned transition of center payment for state-only services from the prospective system to other methodologies has been "postponed to July 1, 2027" under SB 164 DocumentedB05.

The obligation that does not depend on payment

A payment incentive is not the whole of the legal structure. Health centers funded or designated under the federal Health Center Program operate under the Health Resources and Services Administration's compliance manual. As quoted in a 2023 law-firm analysis, Chapter 4 requires that a center's formal referral arrangements address "the process for tracking and referring patients back to the FQHC for appropriate follow-up care (e.g., exchange of patient record information, receipt of lab results)," and that the center be "responsible for the act of referral for FQHC patients and any follow-up care for these patients provided by the FQHC subsequent to the referral" AttributedB07. The HRSA pages themselves returned an access error to this review, so the quotations are attributed to the secondary source B08. Chapter 8, on continuity of care and hospital admitting, could not be opened and is neither quoted nor paraphrased here OpenB09.

The federal structure also differs by designation. A trade-association summary notes that both grant-funded centers and look-alikes are eligible for the enhanced prospective payment, while "Look-Alikes do not receive 330-Funding, Federal Tort Claims Act (FTCA) Coverage, and loan guarantees" AttributedB10. Which obligations, benefits and protections apply is therefore entity-specific, and a general statement about "health centers" must be checked against a particular entity's status before it is applied Inference.

This is the critical correction to the criticism as it is often voiced. It is not accurate to say that the model carries no responsibility beyond the encounter: the obligation to track referrals and follow up is written into the program's own requirements. The accurate question is whether payment, staffing and accountability systems allow those obligations to be met in practice, and whether anyone measures it Inference.

Four patient journeys

Completion of care is easiest to see in specific journeys. The table below sets out, for four common journeys, the record that a system capable of demonstrating completion would leave. It is a framework for audit, not a description of any organisation's current practice.

Four patient journeys: the record each should leave
Record field	New specialty referral	Abnormal test requiring action	Discharge with medication changes	Usual clinician leaves
Initiation	Order placed with clinical question and urgency	Result posted to the record	Discharge summary and medication list received	Departure date known; panel reassignment begins
Named responsible role	Ordering clinician; referral coordinator	Ordering clinician (or covering clinician)	Primary-care clinician; transitions nurse or pharmacist	Clinical leadership; receiving clinician
Deadline appropriate to urgency	Set by clinical urgency, not by scheduling convenience	Set by the result's significance	Contact within a defined number of days after discharge	Before the departing clinician's last day
Accepted handoff	Specialist office confirms receipt and accepts	Result acknowledged by a clinician	Receiving clinician acknowledges discharge record	Each patient assigned to a named clinician
Service completed	Consultation occurs	Follow-up test, treatment or explanation delivered	Reconciliation completed; follow-up visit if needed	First visit with new clinician, or patient-chosen alternative
Results returned	Consult note returns to the referring office	—	Pending tests from the admission tracked to completion	Open orders and referrals transferred, not dropped
Plan updated	Recommendations entered into the care plan	Plan revised	Medication list corrected	Care plans reviewed by receiving clinician
Patient informed	Patient knows the appointment and why	Patient told the result and next step	Patient knows the changed regimen	Patient told of the change and options
Escalation when stalled	Unscheduled or unreturned referrals flagged at a set interval	Unacknowledged significant results escalated	Unreached patients escalated after defined attempts	Unassigned patients and orphaned results escalated

Each column ends in an escalation row for a reason. The characteristic failure is not a wrong decision but a stalled process — a referral that is never scheduled, a result that is never acknowledged, a discharge that no one reconciles, a patient whose clinician left and whose open orders went with them Inference. In each journey the encounter, if one occurs, is the least informative event; the handoffs are where care is completed or lost. The site's analyses of safe transitions, diagnostic safety across systems and hub-and-spoke specialty care follow the clinical side of these handoffs.

Measures of completion, not activity

A system that wants to know whether it finishes care needs measures built on completion rather than volume. Candidate measures, each requiring a defined denominator and risk adjustment:

Referral completion: share of specialty referrals with a completed consultation within a standard set by urgency.
Loop closure: share of completed consultations whose recommendations returned to, and were acknowledged by, the referring clinician.
Abnormal-result closure: share of significant abnormal results with documented patient notification and next step within a defined interval.
Post-discharge contact: share of discharges with contact and medication reconciliation within a defined number of days.
Continuity: share of visits with the patient's usual clinician or team.
New-patient availability: time to a new-patient appointment, measured by actual scheduling, not survey.
Risk-adjusted visit length: appointment duration relative to patient complexity.
Avoidable repeat visits: visits whose sole purpose could safely have been met by telephone or message.
Patient-reported access: whether patients could get care when needed and knew what to do next.

None of these is novel; several are standard quality measures. What is uncommon is publishing them together, at the organisation level, with denominators — which is what would allow the criticism and the defence to be tested Inference.

A documented audit hook

The closest public evidence in the Fresno region concerns a health plan rather than a health center. DHCS's audit of CalViva Health for April 2024 to March 2025 found that in four of five sampled prior-authorization denials for members under 21 the application of EPSDT criteria was not shown, and that six of twenty sampled Enhanced Care Management records did not show all core components — the program designed to coordinate care for the highest-need members DocumentedB11. The findings name the plan's delegate, not any clinic, and the samples are too small to estimate a rate. They matter here because they are an official demonstration of the method this page proposes: auditors examined whether required process steps were completed, not whether encounters were billed. The full findings are analysed in What CalViva's 2025 access survey shows.

Comparing payment honestly

Comparisons between health-center payment and independent-office payment (topic 33) are usually unfair in one direction or the other. Setting a single physician evaluation-and-management payment beside an all-inclusive per-visit center rate compares unlike bundles: the center rate is intended to cover the full range of a center's services and costs, including services the professional fee schedule does not separately pay Inference. Conversely, treating the center rate as if it fully funds every enabling and coordinating service assumes what has to be shown. An honest comparison specifies the service bundle, the patient complexity, the enabling services actually delivered, the overhead, and the public obligations — and then compares completed care per dollar, not visits per dollar Inference. The site's companion economic analysis, Half a county on Medi-Cal, sets out an operating model on which such a comparison can be built.

Capitation, productivity and the opposite risk

Replacing visit payment with per-member payment does not remove incentives; it reverses them. Under capitation, each additional service is a cost against a fixed payment, and the risk shifts from too many visits to too few (topic 34) Inference. California's alternative methodology addresses that risk through quality conditions and an access requirement for continued participation, and protects centers through reconciliation to what the visit-based system would have paid DocumentedB03 B04. Whether those safeguards prevent under-service in practice is a question the two-organisation pilot is too small to answer Open. The site's existing analyses of capitation and clinical independence and the risk of undertreatment address the general problem.

Productivity standards (topic 36) are the internal translation of the payment incentive. Visit-per-day targets, template lengths and compensation formulas determine whether a clinician has time for the between-visit work that completes care. No public dataset reports these standards for health centers or for independent practices in Fresno; the records that would answer the question are compensation plans, scheduling templates and protected administrative time, which are internal documents Open.

The strongest arguments on each side

The strongest defence of the current model

Centers serve populations with high medical and social complexity, and per-visit payment is intended to cover a broad service bundle that ordinary visit comparisons omit.
Federal requirements already oblige centers to track referrals and follow up; the obligation exists independent of payment.
Completion often fails for reasons outside a center's control: specialist scarcity, transportation, unstable contact information and patient choice.
The state's alternative methodology guarantees centers at least their visit-based revenue, so reform need not destabilise the safety net.

The strongest criticism

The state itself describes the per-visit system as incentivising volume over value.
Work that completes care without a face-to-face encounter is not directly paid, so it competes with billable visits for staff time.
The alternative that would pay for non-visit work reached two organisations in its first published cohort, neither in Fresno County.
No public measure shows whether referrals, results and transitions are completed, so neither the obligation nor its fulfilment can be verified from outside.

The strongest counterargument deserves a direct answer. Responsibility is genuinely shared among centers, plans, specialists, hospitals and patients, and a poor outcome does not prove that any one party failed. The response is to measure each party's controllable duties: whether the center tracked the referral, whether the plan authorized it in time, whether the specialist accepted and returned it, whether outreach to the patient was attempted and documented. Distinguishing refusal from failed outreach, and allowing for clinical exceptions, makes the measure fair; abandoning measurement because responsibility is shared makes accountability impossible Inference. Neither a paid encounter nor a poor outcome alone establishes misconduct.

A public whole-person scorecard

Topic 40 asks what a public, understandable measure of whole-person care would look like. A scorecard capable of resolving this dispute would have six properties:

Design criteria for a whole-person care scorecard
Criterion	Requirement	Why it matters
Completion-based	Built on referral completion, loop closure, abnormal-result closure, post-discharge contact and continuity.	Measures finished care rather than activity.
Denominators published	Every rate shown with its numerator, denominator and period.	Prevents small samples from being read as population rates.
Risk-adjusted	Adjusted for medical and social complexity, with the method published.	Protects organisations that serve the hardest populations.
Party-attributed	Each step attributed to the party that controls it — center, plan, specialist, hospital.	Locates failure without blaming the wrong party.
Comparable across models	Same measures for health centers, independent practices and group practices.	Allows payment models to be compared on outcomes, not assertions.
Falsifiable	States in advance what result would show a payment reform failed.	Turns reform into a test rather than a claim.

Such a scorecard is a proposal, not a description of any existing system. Its value is that it would let the claim at the heart of this dispute — that payment design leaves care unfinished — be shown true or false organisation by organisation, rather than argued in the aggregate Inference.

Limits, and what would change the conclusion

What this analysis establishes

Center payment in California is calculated per qualifying face-to-face visit, with a wrap payment for managed-care shortfalls.
The state's own quality strategy describes that system as incentivising volume over value.
The alternative per-member methodology exists, is protected against underpayment, and reached two organisations in its first published cohort, neither in Fresno County.
Federal requirements, as quoted in secondary sources, oblige centers to track referrals and follow up.

What it does not establish

That any center schedules unnecessary visits or neglects follow-up.
Completion rates for referrals, results or transitions at any organisation; none are published.
The current text of HRSA Chapter 8, which could not be opened.
Whether the alternative methodology improves completion of care.

The conclusion would move in a definable way. Published, risk-adjusted completion measures showing that health centers close referrals and results at rates equal to or better than other models would rebut the criticism; measures showing systematically lower completion despite comparable resources would support it. The present state of the public record — a stated incentive, a stated obligation, and no published measure connecting them — is itself the finding Open.

Correction history

No corrections since first publication on 1 November 2026. Material corrections will be dated here, with the superseded text preserved and labeled.

Sources

Official issuers, statutes, opinions and original studies are preferred; reproductions of primary legal text are identified. Checked 1 November 2026 unless stated. A source that opens is not proof of every neighbouring claim.

B0142 U.S.C. §1396a(bb) — payment for services provided by federally qualified health centers and rural health clinicsStatutory text, reproduced by LII: per-visit prospective payment, MEI adjustment, managed-care supplemental payment, alternative methodologies.
B02California Welfare and Institutions Code §14132.100 (reproduction)Mirror of statutory text; official legislative site not reachable from this environment. FQHC/RHC “visit” definition, subdivision (g)(1).
B03DHCS, 2025 Comprehensive Quality StrategyOfficial strategy (PDF created Feb 2026). FQHC APM discussion at printed pp. 266–267 and 273–274.
B04DHCS, Federally Qualified Health Centers Alternative Payment MethodologyOfficial program page and linked timeline, application instructions and CY 2025 participant list.
B05DHCS, Federally Qualified Health Centers and Rural Health Clinics — resourcesOfficial page: state-only-service PPS transition postponed to 1 Jul 2027 under SB 164.
B06DHCS, CY 2024 Targeted Rate Increases — Frequently Asked Questions (12 March 2025)Official FAQ, Q20: FQHC services excluded from the TRI fee schedule; W&I §14087.325(d) parity.
B07Hinshaw & Culbertson, “Federally Qualified Health Center Provider Referral Contracts and Arrangements” (31 March 2023)Law-firm alert quoting HRSA Compliance Manual Chapter 4. Secondary source; the HRSA page itself could not be opened from this environment.
B08HRSA, Health Center Program Compliance Manual — Chapter 4 (Required and Additional Health Services)Primary text. Returned an access error (403) to this review; quoted here only through B07.
B09HRSA, Health Center Program Compliance Manual — Chapter 8 (Continuity of Care and Hospital Admitting)Primary text. Returned an access error (403) to this review; not quoted or paraphrased.
B10National Association of Community Health Centers, Look-Alike Health Center fact sheet (2026)Trade-association summary; distinctions among 330-funded centers and look-alikes.
B11DHCS, Medical Audit Report — CalViva Health, FY 2024–25Official audit report issued 30 Oct 2025; plan-level findings on EPSDT and Enhanced Care Management.

Reviewed and approved for publication by Kanwar Partap Singh Gill, MD. Healthcare Controversies examines disputes about medical care, institutions, money, conscience and law using public records. It is institutional and legal analysis: not patient-specific clinical guidance, not legal advice, and not a finding about any named clinician or organisation beyond what the cited records establish. Survey figures are reported with their denominators and dates; a funding rule, guideline, audit sample or payment incentive is not treated as proof of more than it measures.

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