Diverge Health, a value-based care accelerator for primary care practices, is merging with Medical Home Network (MHN), a company supporting federally qualified health centers.
Together, the organizations hope to reach broader swaths of patients in value-based arrangements. MHN will continue operating under the Diverge platform, mobilizing more community-based teams, though the brands will remain distinct. In 2027, they will partner with nearly 100 FQHCs, over 300 independent practices and over 20 Medicaid and Medicare partners in nine states. This represents half a million members and $3 billion in medical spending.
While Diverge has focused on independent practices, MHN has focused on Medicaid and FQHCs.
MHN launched what it says was the first wholly provider-owned Medicaid ACO in Illinois. That organization, MHN ACO, was the first Illinois entity to earn NCQA Case Management Accreditation, the company claims, and has returned millions to provider participants over the years.
Meanwhile, Diverge, founded four years ago and backed by GV (Google Ventures), has built its network across independent primary care practices and invested in community-based teams. It saw a 2% reduction in population-level medical-loss ratio from baseline in 2025 and a 6% improvement in patients visiting their PCP.
“Diverge has been developing these programs to really supplement the primary care practice, and engage with the patients on behalf of the primary care practice, to close gaps between visits,” Binoy Bhansali, co-founder and CEO of Diverge Health, told Fierce Healthcare.
The Centers for Medicare & Medicaid Services have introduced more VBC opportunities, including for FQHCs, like ACO REACH, the Medicare Shared Savings Program and the newer ACCESS model. MHN currently partners with FQHCs in both ACO REACH and MSSP arrangements, taking on downside risk.
“Value-based care is an essential strategy for health centers these days … because there is a gap in funding between what their historical reimbursement pays for and the actual cost of providing care,” Cheryl Lulias, president and CEO of MHN, told Fierce Healthcare. Lulias will be co-founder and president of MHN going forward.
The merger also comes at a time of major changes to the Medicaid program under President Trump’s H.R. 1 law, though Medicaid challenges go back even further. During COVID-19, when redeterminations were paused, millions of Americans joined Medicaid and then came off again. That is expected to continue. “We're expecting to see folks coming off of Medicaid in every one of our states,” Bhansali said.
Over the past several years, state requests for proposals (RFPs) have evolved to include measurable targets for how much care should be under value-based arrangements and expectations for moving into advanced payment models, according to an analysis by Guidehouse. Many states have aligned their mandates with the Health Care Payment Learning & Action Network (LAN) framework, though even less prescriptive states signal that plans must be prepared to support provider participation and share accountability for outcomes.
“For MCO leaders, the implications are significant, as VBP capability is now a critical factor in bid competitiveness,” the Guidehouse report said. “This requires robust infrastructure, including data and analytics, attribution models, financial reconciliation processes and governance structures that support VBP at scale.”
This is exactly where Diverge and MHN come in, executives say. Independent practices with one or two docs will struggle to participate successfully alone, Lulias argues: “Taking risk requires advanced infrastructure and capabilities.”
The companies lean on tech to support providers, including for clinical decision support, risk stratification, visit scheduling and other admin tasks. Diverge also takes a community-based approach, training its own health coaches who help patients manage their chronic conditions.
“If you hire someone from a community to be able to build trust with that community, […] there’s a lot of magic that can be done in improving outcomes,” Bhansali said.
The need for wraparound services is not only exclusive to rural regions, she added. Any independent PCP serving Medicaid faces tough margins, making volume matter—that leads to patient churn and short visits. “There’s a lot of patient needs that you can’t necessarily address in 15 minutes,” Bhansali said. Beyond that, specialty care access is even more limited, considering few specialists serve Medicaid patients, per Bhansali.
Beyond immediate Medicaid needs, MHN is focused on broader innovation. For instance, MHN just launched an asthma prevention program in partnership with MHN ACO to replace gas stoves with electric stoves for MHN ACO Medicaid patients. The program will offer stove replacement screening, leveraging data and care coordinators to identify households most likely to benefit. The initiative is supported by MHN ACO’s Clinical Innovation Fund, which reinvests a portion of savings achieved from VBC into innovations. MHN ACO is provider-owned between FQHCs, health systems and their physician practices.
“We have to continue to figure out how to innovate and really do more with less,” Lulias noted.
Seventeen years ago, MHN was founded as a nonprofit. It transitioned to a public benefit corporation in early 2025 following a funding round led by Oak HC/FT. The investor will join the Diverge board, alongside Triple Aim Partners and GV.