This paper describes the planning efforts of a community agency that was ultimately unsuccessful in converting two primary care centers from the traditional fee-for-service Medicaid reimbursement system to a per-capita prepaid Medicaid reimbursement system. We analyze how the community agency prepared its plan, the barriers it encountered in trying to implement a demonstration project, the ambiguous messages community organizations receive from policy-makers, and the role the Mount Sinai School of Medicine played in the conversion effort.